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(B)(N) Bobbing For Apples (AAPL)

September 12, 2015
Apple bobbing blindfolded? Courtesy: The Street

Apple bobbing blindfolded?
Courtesy: The Street

Drama. Halloween and All Saints Night are fast approaching and the happy folks on The Street are already bobbing for Apples (AAPL Apple Incorporated) again hoping against all odds that one might pop-up like Lazarus of Bethany and we’ve haven’t seen the likes of that in a long, long time notwithstanding that Apple Incorporated could be had for $5 in 2005 and $1 a few years before that – which is kind of frightening because Apple Incorporated today at $600 billion is one of the most valuable companies in the World (The Street, September 11, 2015, Trading Apple Shares — Still Too Soon to Call for a Rally).

But we do have something in common with the chartists – they call it resistance and we call it the price of risk – and we handle that information quite differently because we don’t know anything about stock prices except what they are and what they were.

And if we follow our one and only rule – we only buy and hold stocks that are trading at or above their price of risk – we bought 350 shares of AAPL for $20,000 in December 2011 and ran them as a (B)-class portfolio with only one company in it and today we have $52,387 for a +157% capital gain – which is a lot of apples but we don’t own any of the stock right now – and we know exactly why – and we could buy it all back and even more (450 shares) for $46,404 today and still have $6,000 in cash.

And we made only four transactions in three years – 2 buys and 2 sells – and we know exactly what we’re waiting for now that we might buy it again or not – and anybody just anybody can do that and keep on doing it with nothing more than a ruler, a good eye, and a stock chart – and $20,000 to invest and Oooweeee … Happy Halloween! And a good fright; please see the illustration in Exhibit 1 below (and click on it and again to make it larger as required).

Exhibit 1: (B)(N) A Ruler, a Good Eye, and a Stock Chart – Resistance is not Futile

Figure 1.1: Resistance is not Futile

Figure 1.1: Resistance is not Futile

For more information and examples of the Free Market Yield and the terms that we have used above, please see our Posts “(P&I) The Dismal Equation (Ecclesiastes 9:1)” and “(B)(N) S&P 100 Volatility Risk and The Full Moon” and “(B)(N) NASDAQ 100 Volatility and The Stone Bunnies“ and for an introduction to The Barometer “(B)(N) What’s A Girl To Do” or “(P&I) The Swiss Franc Debacle“.

And for more information on real “risk management” in modern times and additional references to the theory and how to read the charts and tables, please see our Post, The RiskWerk Company Glossary and “(P&I) Dividend Risk and Dividend Yield“, and our recent Posts “(P&I) The Profit Box” and “(P&I) The Process – In The Beginning“; and we’ve also profiled hundreds of companies in these Posts and the Search Box (upper right) might help you to find what you’re looking for, such as “(B)(N) TLM Talisman Energy Incorporated” or “(B)(N) ATHN AthenaHealth Incorporated” or “(B)(N) PETM PetSmart Incorporated“, to name just a few.

And for more applications of these concepts please see our Posts which rely on the Theory of the Firm developed by the author (Goetze 2006) which calibrates The Process to the units of the balance sheet and demonstrates the price of risk as the solution to a Nash Equilibrium between “risk-seeking” and “risk-averse” investors within the demonstrated societal norms of risk aversion and bargaining practice. And for more on The Process, please see our Posts The Food Chain and The Process End-Of-Process.

And for more on what risk averse investing has done for us this year, please see our recent Posts on “(P&I) The Easy (EC) Theory of the Capital Markets” or “(B)(N) The Easy (EC) Theory of the S&P 500“, and the past, The S&P TSX “Hangdog” Market or The Wall Street Put or specialty markets such as The Dow Transports & Utilities or (B)(N) The Woods Are Burning, or for the real class actionLa Dolce Vita – Let’s Do Prada! and It’s For You, Dear on the smartphone business.

And for more stocks at high prices, The World’s Most Talked About Stocks or Earnings Don’t Matter – NASDAQ 100. And for more on what’s Working in AmericaBig OilShopping in America or Banking in America, to name just a few.

Postscript

We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

The Perpetual Bond
Alpha-smart with 100% Capital Safety and 100% Liquidity
Guaranteed
With No Fees and No Loads on Capital

For more information on RiskWerk, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Related data may be obtained from us for free in a machine readable format by request to RiskWerk@gmail.com.

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.

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