Blue Jeans Don’t Sell iPhones

Apple’s September Announcement

The delivery of Apple’s new flagship iPhone, the iPhoneX or iPhone 10. Was met with as much publicity as one would expect.

A less than sharp dressed man took the stage to announce the new features included in the phone. While impressive and ground breaking as they were, Apple investors seemed to be a little disappointed with the announcement. Thus far, the stock has shed 2 percent since the announcement.

Will the per share value continue to decline?

It will for about 5 weeks. On the sixth week, the stock will jump back to life and finish the year out strong. At least that is what has happened the last 5 times Apple released a new iPhone.

Since 2012, each time Apple releases a new phone, the stock gains steadily the days before, then falls right after the announcement. On average this decline lasts 4 to 5 weeks.

Almost like clockwork, Apple stock surges on the 6th week following the announcement of the new phone. For the most part, that trend continues through to the end of the year as investors speculate that new iPhones will be a popular Christmas present.

Is Apple good enough to demand $999 for its new phone?

Regardless of what “techies” say about the phone’s advantages and disadvantages to Samsung’s Galaxy model, Apple has been able to command impressing margins every year thus far. I don't see that changing this year.

When to invest?

This is the toughest question of all. But first let us establish a couple things.

1st. Apple’s business is sold.

2nd. There are high switching costs for consumers.

3rd. The economy in the United States is doing great.

These things are inevitably true right now. Any rational investor will look at the declining stock price of Apple and see dollar signs. For each percent it drops, an investor is able to buy it cheaper.

In my opinion, Apple is a strong buy moving into the first of October. I am going to place my bets on a price surge in the 6th week.

Disclaimer

I am not licensed to provide investing insight. Past returns don’t predict the future.