Apple Stock Has Inflated Another Dangerous ‘Dotcom’ Bubble In The Nasdaq




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Apple (NASDAQ:APPL) has been the shining jewel in the Nasdaq over the last year. Currently trading over $310, the tech giant performed an extraordinary feat for a company that was already one of the most valuable in the world, doubling in value from its lows in 2019. In line with this huge spike, economist Sebastian Galy at Nordea Asset Management told CCN he’s concerned about the real possibility that we are facing another “dotcom” bubble. First, the bullish argument: Apple is a runaway train, flush with cash and enjoying strong demand for its wireless headphones. Throw in the fact that it’s successfully cornering the Chinese market with its smartphones and some enthusiasm about the upcoming 5G compatible iPhone 12. Combine all this with ultra-low interest rates, low inflation, and a generally positive risk environment, and it’s no wonder APPL stock is so in demand. Except, this isn’t the whole story. Over the past few years, Apple has embarked on an enormous share-buyback scheme. In 2019, ignited by Trump’s tax cuts, Tim Cook and the gang bought back an astonishing 6% of all outstanding APPL stock. Averaging 5.4% over the last few years, this both squeezes the value of the stock while also increasing the dividend the company can pay. Apple’s payout per share has increased more than 80% over the last seven years, putting even more upward pressure on its value. Nordea Asset Management’s senior economist Sebastian Galy thinks it’s time to take a tough look at just how much longer this meteoric rally can last, as he states in a comment to CCN,Rallies statistically rarely last more than three months as they are often driven by a theme which leads to momentum followed by a squeeze that is either fatal or just a setback. The rally in the Nasdaq is reminiscent of the dotcom bubble with Apple doubling in value in a year with a long-period of momentum as defined by the RSI indicator and high P/E. Galy’s thesis centers around his view that even the most optimistic of scenarios don’t justify Apples’s monster valuation:Let us say that Apple has tripled in value in three years ending end 2020. Then it must eventually deliver a completely dominating position in phones, accessories and streaming or the underlying markets must have exploded in size. It would however require a massive investment and assumes that Netflix rolls over. 200-dollar wireless headphones (and soon predictable ear beads) are unlikely to resist competition. The Nordea economist also describes how Apple is unlikely to sustain its current level of innovation, and cheaper phones with similar features are going to flood the market in the event of an economic slowdown squeezing consumer purse strings. With a market cap of $1.4 trillion, there is no questioning how important APPL stock is to both the Nasdaq and the stock market as a whole. With every possible fundamental pumping the price, Wall Street analysts are coming up with increasingly wild forecasts. Deja vu, anyone? Disclaimer: The opinions expressed in this article do not necessarily reflect the reviews of CCN.com.

All data is taken from the source: https://www.ccn.com/
Article Link: https://www.ccn.com/apple-stock-inflated-another-dotcom-bubble-in-the-nasdaq/

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Apple Stock Has Inflated Another Dangerous ‘Dotcom’ Bubble In The Nasdaq: https://www.youtube.com/watch?v=FWWLp3tG0IQ

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Apple nasdaq:aapl has been the shiningjewel in the Nasdaq over the last yearcurrently trading over $310 the techgiant performed an extraordinary featfor a company that was already one ofthe most valuable in the world doublingin value from its lows in 2019 in linewith this huge spike economist Sebastiangalley at Nordea asset management toldSisi and he’s concerned about the realpossibility that we are facing anotherdot-com bubble first the bullishargument Apple as a runaway train flushwith cash and enjoying strong demand forits wireless headphones throw in thefact that it’s successfully corneringthe Chinese market with its smartphonesand some enthusiasm about the upcoming5g compatible iPhone 12 combined allthis with ultra-low interest rates lowinflation and a generally positive riskenvironment and it’s no wonderAppl stock is so in demand except thisisn’t the whole story over the past fewyearsApple has embarked on an enormous sharebuyback scheme in 2019 ignited byTrump’s tax cuts Tim Cook and the gangbought back in astonishing six percentof all outstanding Appl stock averaging5.4 percent over the last few years thisboth squeezes the value of the stockwhile also increasing the dividend thecompany can pay apple’s payout per sharehas increased more than 80 percent overthe last seven years putting even moreupward pressure on its valueNordia asset management senioreconomists sebastian galle thinks it’stime to take a tough look at just howmuch longer this meteoric rally can lastas he states in a comment to CCN ralliesstatistically rarely lasts more thanthree months as they are often driven bya theme which leads to momentum followedby a squeeze that as either fatal orjust a setback the rally in the Nasdaqis reminiscent of the dot-com bubblewith Apple doubling in value in a yearwith a long period of momentum asdefined by the RSI indicator and highp/e galleys thesis centers around hisview that even the most optimistic ofscenarios don’t justify apples asmonster valuation let us say that Applehas tripled in value in threeyears ending in 2020 then it musteventually deliver a completelydominating position in phonesaccessories and streaming or theunderlying markets must have exploded insize it would however require a massiveinvestment and assumes that Netflixrolls over $200 wireless headphones andsoon predictable ear beads are unlikelyto resist competition the Nordeaeconomist also describes how Apple isunlikely to sustain its current level ofinnovation and cheaper phones withsimilar features are going to flood themarket in the event of an economicslowdown squeezing consumer pursestrings with a market cap of 1.4trillion dollars there is no questioninghow important Appl stock is to both theNasdaq and a stock market as a wholewith every possible fundamental pumpingthe price Wall Street analysts arecoming up with increasingly wildforecasts deja vu anyone disclaimer theopinions expressed in this article donot necessarily reflect the reviews ofCCN dot-com

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    Apple Stock Has Inflated Another Dangerous ‘Dotcom’ Bubble In The Nasdaq