Monday, June 18, 2012

Newton's Fruit Falling Upward Once Again

CRUS, Cirrus Logic, which makes audio chips which trades essentially as an AAPL derivative, has broken out today strongly following a positive report from the Semiconductor Industry Ass'n that business has turned.  I take this as a sign that AAPL is "probably" headed to new highs as well.  I had gotten lucky and sold most of AAPL around $620+ after A) Cramer called it the stock of the century (I exaggerate only slightly) and then the DOJ e-books lawsuit was filed. 

I have been scaling back into the fruit big-time.  First intermediate-term target:  $690-700 by year-end.  Rationale: After FY Q3 earnings are released in about 5 weeks, TTM 12 month earnings could be $45.  15-16X those earnings gets one to about that range.  I would also note that Value Line's "value line" places AAPL's "fair value" around $900 as of today.

Am selling my last 14-year Treasury Strip at a 9% return, good in that this one was not bought till late in the rally.  My rule of thumb with trading zeroes is that I sell if I net 3 year's worth of interest payments on the trade.  Especially so when it's a zero that pays you nothing to own it.

1 comment:

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