Apple (AAPL) had $59.69Bn in revenues last quarter and that's up 10.9% while the rest of the economy was down 33% and the market logic is that one company making money trumps an entire economy losing money. Of course it's ridiculous but what can you do?
The chart on the right illustrates just how bad our Q2 GDP was compared to… well, history! This one-quarter drop in GDP was worse than ENTIRE RECESSIONS COMBINED yet the market is trading like we are going to just dust ourselves off and get right back into the race. Of course Apple did well – they sell exactly the kind of crap that people forced to sit on their couch for 3 months are going to buy. Amazon and other tech companies did well too because they cater to the shut-in crowds – you can't judge the economy or the market by what was bound to be the strongest sector.
Apple was our Stock of the Year 3 times this decade and, just two weeks ago, on July 17th, we did our Portfolio Reviews and we made aggressive adjustments to our AAPL position in the Butterfly Portfolio:
AAPL – We got more conservative but AAPL did not. The Aug $330s are $60 and they can be rolled to the Oct $350s at $50 so we're paying $10,000 for $20,000 more strike. Since our $200/260 spread is now net $144,000 out of a potential $180,000, it has $36,000 more to gain to cover the short calls. Still, we can do much better than that in two years so we'll cash that spread ($144,000) and move to 40 of the June 2022 $300 ($117)/400 ($65) bull call spreads at $52 ($208,000) so we're spending $64,000 to move from a spred with $36,000 potential to one with $192,000 potential – easily covering the short calls but also well-covered by them.
|AAPL Short Call||2020 18-SEP 350.00 CALL [AAPL @ $384.76|