Debt doesn’t matter — right up until it does.
For those of you that are unaware Apple Inc. is in Debt. The fact that they are in debt isn’t bad, most companies are at some level. It’s the ratio of debt that is concerning. Take a look at this chart.
These numbers are getting pretty high, and no one is talking about it. I know Apple is buying back stock at a high rate and this is a way to do it, but the only way they make their money back is if they can resell the stock they bought at a higher price.
This is concerning as I’m pretty sure we are in a Tech Bubble.
I do believe their share price is decent and not too overvalued like AMZN is, but I know for sure Apple will be effected if that bubble bursts.
The reason I care so much, is because I have to admit my portfolio is mostly in Apple. While I won’t specify the exact amount it’s between 500 and 400 shares.
I’ve wanted to sell my position in Apple for a while now but it’s those dividends that keep me in. That and their return on equity is still quite high.
I just don’t see how much longer Apple can keep this up.
The new iPhone X just came out and while I’m probably going to get one I don’t know if everyone else will. $1000 is a lot of money. I can only hope people’s phone plans don’t change in price because of this. If the rates don’t change, then maybe people will be more willing to purchase it.
As for what I think about the future of Apple just watch this video. My thought process behind the new iPhone is exactly inline with this guy, and I think Apple will only continue down this path of fracturing themselves to make an extra buck.
Maybe Apple can continue pumping out money with just better marketing. However, if the iPhone 8 is already not selling well, the iPhone X is Apple’s only hope.
If Apple doesn’t meet there next quarters earnings forecast, I think people will start to pull out and it’s a long drop from the top.