WHY I DUMPED MY APPLE STOCK A WEEK AGO MONDAY!

FULL DISCLOSURE:  I do not provide specific investment advice on this blog; however, I did sell all of my Apple stock last Monday.  Now, I did this for my personal reasons, and I certainly am not suggesting that you should consider selling the stock, as well.  Apple is still a great and admirable corporation, and I might even buy some back in the future.  I believe, however, that the manner in which I approached that decision might be of interest to some readers.

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I came to my conclusion, to re-shuffle my portfolio, oddly enough, while lying on a hospital gurney, waiting for a very simple procedure.  At the time, I realized that I wanted to have a bit more liquidity until I knew more about who would be on Trump’s Financial Team, and what his final agenda might be.  At least, he would still have to go through Congress, once he takes Office, and prior to making any devious moves.

In September of 2008, President George W. Bush told the nation that we were looking into a financial abyss.  The markets were a little skittish, as they always are during a Presidential hand-over; but, the anxiety was quite a bit worse due to the  financial crisis.  

Luckily, the transition from Bush’s Team to in-coming President Barack Obama’s went smoothly.  The next Treasury Secretary, Timothy Geithner, was merely moving over from the Fed-New York.  So,  everyone involved were experienced hands, and known quantities–both domestically and globally!

My concern this time around stems from Trump’s lack of policy knowledge, his unpredictability, and many of his ideological views that just do not stand-up to the “smell-test!”  His vow to impose tariffs on imports from Mexico and China would result in counter-tariffs on our exports to those countries.  Additionally, such Protectionism could lead to higher prices, an economy weakened by reduced consumer spending, and significantly higher unemployment.  In fact, that outcome would certainly work counter to Trump’s promise to bring the jobs back!

As the world’s largest corporation (by market capitalization), and one that assembles its iPhones in China, Apple would certainly be at the top of Donald Trump’s list of companies to harass.  I also sold a much smaller amount of First Solar since his preference to ignore the value of new technology will probably harm the overall Renewable Energy Industry.

As I liquidated Apple, I shifted some of the proceeds into Sector SPDRs, which are ETFs that invest in just the corporate components of one particular sector (i.e,. Energy, Health Care, Telecom, Utilities, etc.) within the S & P 500 Index.  ETFs trade like stock; however, when an investor buys even a narrowly-defined sector, they get the strong companies, along with the weak.  I have linked the inter-active web site, which enables the reader to check the performance of a particular sector at various time-frames.  The link is as follows:  http://www.sectorspdr.com/sectorspdr/tools/sector-tracker.

For instance, I believe that the Energy SPDR, which is composed mostly of oil, gas and coal companies would benefit by having less competition from renewables, under Trump.  Health Care, with Trump’s threat to repeal “Obamacare”, is one to watch, since we do not know what, if anything, will replace it.  Telecom might prosper from the elimination of “Net Neutrality”; but, Utilities would be harmed if his protectionist trade policies result in higher inflation, and rising interest rates.

I tend to consider myself to be a Macro-Investor. There are so many extraneous factors that impact the financial markets, which many investment professionals either ignore or simply do not understand.  But the markets can be effected by trade policy, global political alliances, health care pandemics, and cultural discrimination, among other things.  In essence, financial markets do not exist in a vacuum.

NOTE:  If you have any questions about this post, just leave a Comment below.

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  1. #1 by J. Steele on November 26, 2016 - 6:49 PM

    I linked to your website via your comment on the NYT article. May I ask what your retirement portfolio looks like? Have you made changes?

    • #2 by cheekos on November 26, 2016 - 7:41 PM

      Mr/Ms. Steele, thanks for visiting my blog, and for commenting. So far, my portfolio realignment is still somewhat of a work-in-progress. Perhaps in a day or two, I might be able to provide a bit more information.

      My initial inclination, given the tremendous uncertainty–the bane of the financial markets–Trump brings, I wanted to just take some more money off-the table, and consider our options. Oftentimes, the various market participants are so engrossed in all things financial, that they do not consider the various externalities: the unpredictability of Trump; the social dynamics that will result from his Presidency, plus that of his ideological minions; what the various global alliances will be; his asinine “Infrastructure Scam”; who our trade partners will be, and on what basis; and how will he fight to control an Independent Federal Reserve–which it should continue to be?

      And then, I’m very concerned about who his Big Three–State, Defense and Treasury Secretaries will be. Probably inexperienced ideologues who will not be prepared to offer alternative viewpoints. BUT OTHER THAN THAT, EVERYTHING WILL JUST BE HUNKY-DORY!

      Back to my portfolio. I have always taken much more of, what I call, a “macro” approach to investing. But, during The Great Recession (4Q07-1Q09), I felt vey comfortable with Ben Bernanke as Fed Chairman, Tim Geithner as President of the Fed-NY, and Hank Paulson, as Bush’s Treasury Secretary. With Obama, Bernanke stayed as Fed Chair, and Geithner moved over, from Fed-NY to head Treasury. In fact, during the Financial Melt-down, our portfolio remained fully-invested. But with Trump, here we are–19 days after the Election–and no Treasury Secretary!

      Almost five years after retirement; however, as I do the Trump Portfolio Realignment, I am also trying to assemble a portfolio–shifting a good bit of the assets into exchange-traded funds–so that my wife, at some point, will be able to handle it. And, I have already moved some of the Apple proceeds into ETFs. It’s just the facts-of-life. By focusing more on ETFs, and less on individual stocks, plus just two or three funds, it would be easier, I believe, for her to start to understand, and be prepared to make minor changes over time. Also, unlike with mutual funds, our portfolio would not be subject to changes in investment managers, or their strategies.

  2. #3 by cheekos on December 21, 2016 - 2:46 AM

    The First of a Two-Part follow-up is coming within a half-hour, with the second (hopefully) tomorrow.

  3. #4 by cheekos on December 23, 2016 - 5:03 AM

    Today, I finally published the second follow-up post to this one. The first, a couple of days ago, described my trepidation with Trump. And today, I published one, going into more detail.

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