iPhoney: The Last Bubble

One by one all of the bubbles have imploded. All were inflated by the same fake promise of effortless wealth, sucked in untold capital, and then collapsed unceremoniously. The parabolic rise fully offset by the vertical fall. There have been more bubbles in this cycle than in the past two cycles combined. You would think that people would learn to identify the signature of a bubble ahead of time, but it's always "different this time". The lure of easy money is irresistible...

Contrary to popular belief, back in Y2K most of the money was not lost in Pets.com and other fly-by-night garbage. Because those bubbles were too obviously fraudulent and risky. Entire web sites were dedicated to documenting the well-publicized Dotcom carnage and mass layoffs. Instead, most of the money was lost in Big Cap Tech which predominated the market indices at the peak of the bubble. Microsoft, Intel, Cisco, and Oracle - the Four Horsemen of Tech. Precursor to MAGA. People held those names all the way down, because they were the "quality" stocks. It took 17 years for Microsft to finally eclipse its peak Y2K valuation ($550 billion), in 2017. Oracle, Intel, and Cisco are still well below their all time highs set in 2000. Dead money. Back when all of the junk was imploding, for a brief time the quality held up, but then it rolled over and the REAL DECLINE ensued. The Nasdaq fell from a peak of 5000 in Y2K to just over 1000 two years later -80%.

Now we are seeing a virtual repeat. Smaller bubbles have been popping throughout all of 2018. This past week, half of MAGA imploded. Bearing in mind that Amazon and Google had already left the party prior to their "unexpected" revenue miss. Because *someone* who can move a stock always knows something.

Which gets us to the last two. The two most highly valued companies in the world. One of which was the most valuable company in Y2K and then left for dead for a decade and a half. The other is the most valuable company in world history with the largest stock buyback in human history.

iPhone unit sales have been stagnant for years. Only by adding more expensive models, has revenue continued to increase. 

Here we see Apple with the smartphone supplier index fund.

Correlation was tight right up until the mega stock buyback was announced, which catapulted Apple above the $1 trillion market cap level. 

Ten years ago no one had iPhones, they all had Crackberries. Prior that they had Motorolas, Palm Treos, and Nokias.

The fads of the day.  Which is what a $1,500 iPhone represents, a very expensive fad. Taken to level 11.

Let's not forget, Apple is no stranger to the vagaries of Tech fads. 

"Just 13 years ago, Apple was on the verge of bankruptcy. 

But then - worried that it would be viewed as a monopoly without competition from Apple - Microsoft came to Apple's rescue with a $150 million investment."