Although I found a new favorite dish at La Salita today and enjoyed lunch with Mike and Craig, that was not the most exciting event of the day.
The most exciting event of the day was the huge gain in the value of Apple stock and the event that triggered it. The market opened sharply down about but around 8:00 a.m. news hit the wire that Warren Buffett had bought 75 million shares of Apple stock at an average price of $165.00 and the market and especially Apple stock soared. The Dow ended the day up 332 points and Apple ended the day up $6.94 at 183.98. I had my best day of the year with my portfolio up over $30,000, finally returning to positive territory for the year to date after sliding $150,000 from its high in January to its low several times since January. Let’s hope the threat of a tariff war with China ends and the stocks continue to rally from here.
To give you a sense of the magnitude of what Buffett did for the value of Apple, let me provide some figures. Assuming he bought at an average price of $165/share his total investment cost $12,375,000,000, garnering him a little more than 1.5% of the 5.6 billion outstanding shares of Apple.
His appreciation in his Apple stock since he bought it a week ago has been $1,423,500,000 and the portion of that gain after he announced his purchase on Friday was $522,000,000. If Apple rises another $20.00 per share it will be the first company to reach a market cap of $1 trillion dollars. At the end of the day on Friday its market cap was $903 billion.
Now the second part of the story. I have devised a new strategy, which is when I know Apple is going down I sell and buy back at a lower price at the end of the day. I initiated my strategy on April 6, the morning after President Trump announced the $50 billion of tariffs on China. In the pre-market Apple was already down $2.00 but I sold 2000 shares at an average price of $170.85 any way. The market dropped over 600 points that and I bought back the 2000/shares at an average price of $169.10 for a profit $3,500.
I tried the same strategy on April 26, selling in the morning at a price of $164.43. I was watching the price of Apple and when it dipped below $164.00 I noticed it started going back up so I put in an order to buy back the 2000 shares. I bought 200 shares at $164.03, but then the price started ramping up. I cancelled my $164.03 order and placed a $164.13 order and when that did not fill, I cancelled it and bought the remaining shares for $164.23. I still made a $433.00 profit, but I now see that April 26 and $164.00 was when Buffett was buying shares and I was lucky to buy at a profit in the surge of price that has soared up from there to $184.00 today.
Here is a chart that shows the points at which I bought and sold and the tremendous increase in price since Buffett began buying Apple stock.
I ordered flat blue corn enchiladas with ground beef between each layer and topped with sour cream and red chili an double beans. I ordered a third enchilada to be added to the stack for $2.00 extra. I took 1/3 home.
I invited Tom and Janis for a glass of wine to share my remarkable Apple stock stories and then rode to Montano in the afternoon.
Tom and Janis came at 5:00 and we drank a glass of wine in the garden until about 6:30.
When they left I heated the PPI Cornish Game Hen and string beans with a bit of rice and some PPI salad and drank a glass of 2016 Crayon rose (Trader Joe’s $5.99).
I watched TV until 10:00 and went to bed.
Bon Appetit
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