Newsletter: My New Apple Price Target is $4,155.89
This is the December 22nd edition of my newsletter. To receive my genius analysis each evening, sign up here: Get John’s Newsletter
|Welcome to my newsletter. Each day, I’ll send you the dumbest things|
that happened in the markets. Thanks for reading.
John W. B. Rich (Wealthy)
|Analysis: My New Apple Price Target is $4,155.89As soon as I heard that Apple was planning to produce its own car by 2024, I immediately summoned my interns to the office for an all-night fundamental analysis session (I was unable to be present in the office, as I had a previously-scheduled meeting with my wife’s sister at 11pm).|
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First, we took Tesla’s P/E ratio of 1,268.70, and simply applied it to Apple. Because Apple will be entering the car market, a business with infinite scalability, low costs, and little required overhead, they deserve a much higher multiple than a company that just produces dumb “soft” ware. Therefore, we changed the implied P/E from 40.26 to 1,268.70. Doing that calculation gives us an implied Apple price target of $4,155.89.
This calculation was rather simple, but I am still billing my clients for 500 hours of research.
Because Apple is only trading at the $130 level right now, I view this as an historic buying opportunity on par with Bitcoin in 2009 or Rudy Giuliani’s divorce attorney’s firm in 1968.
I want to clarify one thing. Earlier today on Twitter, I reported that Apple is near bankruptcy. This was actually caused by an error from one of my analysts. He mistakenly read “cash” as “crap” and assumed that Apple was over-loaded with crap liabilities. He has since been fired, but I hear he has already landed on his feet as a Senior Portfolio Manager at SoftBank.