Reason #4 why I love to blog: connecting the dots.
Three readers sent me different links this morning; individually they were "just more of the same," but putting them together, the dots painted an interesting picture.
The story.
Earlier today I suggested there was sector rotation. I suggested folks were selling small amounts of AAPL to buy positions in energy.
On a day when the Dow surged at mid-morning, some energy plays were up as much as five percent, even after a big run last week.
But, on a day when the Dow surged, AAPL was down, and not just a bit, but significantly.
I erroneously attributed it to sector rotation because I was considering doing exactly that: sell a bit of AAPL and buy a lot more energy. But I held off. Went for a bicycle ride.
And then it hit me.
The readers explained it to me.
Apple, Inc., is in trouble. Possibly deep trouble. Apple's biggest quarter is this quarter, October - December.
If Apple, Inc., misses on either the top line or the bottom line, or heaven forbid, both lines, in its best quarter, AAPL will crater.
And it's very possible AAPL could miss.
Tim Cook can manage logistics, and he has a steady supply of chips out of Taiwan, but Tim Cook can't manage China's energy policy.
And China has run out of energy. Literally.
China is shutting down factories because they don't have the electricity.
The irony is that Apple is known for two things:
- renewable energy; and,
- going it alone, being self-sufficient.
It looks like Apple (and all manufacturers in China) could have huge problems exactly for those reasons.
Stop.
On a day the market surges, and early reports that Apple's new product line was doing well, why would AAPL be slumping today? It cannot possibly be sector rotation. I was wrong on that one.
It's all about energy.
Now for the links to support the thesis:
- top Apple, Tesla supplies suspend production amid China power crunch. ZeroHedge. China wouldn't shut these factories down if they still had coal heading into another very cold winter.
- from twitter: Europe, China, and India seem to me rather short of energy. The biggest shortage in China and India is coal. They are really, really short. In Europe, it's natural gas (and wind and emissiosn rights, but that's another matter.
Bottom line: this could very well be the "I told you so winter," for energy bulls to the faux environmentalists. There's every indication that while "they" spent the last ten years on wind and solar energy and "green" policy, they should have been paying attention to the facts of life.
For Apple, this is almost a triple whammy:
- going green; not paying attention to what was going on in the real world;
- relied too much on China, not seeing the energy crisis coming; and, of course,
- sector rotation, from technology to energy.
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