Pilots practice “touch and go”, let the wheels touch and pull up for another try.
Is Apple practicing another “touch and go” with the TRILLION dollar brass ring? Hopefully not, but being in the 4% club means it’s difficult to maintain the throne… I read today If the Saudi public offering of Aramco ever goes through the market cap would START at TWO TRILLION…now that oil prices have recovered this may go on the shelf… Apple at $1 Trillion...It's All Relative It's no surprise that Apple's $1 trillion market value got a huge amount of attention this week. Big, round numbers resonate with everyone. But, from an investor's point of view, simple market value doesn't hold much significance, certainly not in a vacuum. Fortunately, we have ways of measuring Apple's relative value. At the current $1 trillion value, Apple represents 4% of the total value of the S&P 500. That's a rare feat. Phil Segner at Leuthold Group explains just how rare: Since 1990, only four other companies have reached the "4% Club," he notes. They are Microsoft, General Electric, Cisco Systems, Exxon Mobil, and Apple. (Amazon.com <https://urldefense.proofpoint.com/v2/url?u=http-3A__amazon.com_&d=DwIFaQ&c=OAG1LQNACBDguGvBeNj18Swhr9TMTjS-x4O_KuapPgY&r=F2GFXrjLFqVo3VwvIlo_XYeEiRRjHv15rxcenz7A21woG2aFGcrzndoSsskxfmOs&m=8hyciE5IFT-kTkdYRAi9QJ6uQMRBqt8RREgrKIY_QR4&s=PmERQxixm6OsLQDkvKo_uyE0ceXUO3YN7sxTStO9Z5g&e=> could be the next entrant; it has a current weighting of 3.5%). Other than Apple, each of the companies had one stay in the club, none lasting longer than 15 months. Apple, on the other hand, first entered the club six years ago. It stayed there 10 months before falling out, but has managed to make it back three more times. Segner writes: Even though the last three admittances lasted only one month each, no other previous 4% Club firm was able to revisit the magic threshold after falling out. Apple continues to outrun the grim reaper of capitalism with unprecedented vigor. All of the other companies fell hard after their 4% stay. While Microsoft is on the rebound, GE, Cisco, and Exxon Mobil are far removed from their 4% days and don't look set to recapture them anytime soon. "With four visits to the Club, [Apple] has differentiated itself from past members," Segner adds. "However, the law of large numbers and the invisible hand of the marketplace will probably prevent any prolonged stretches of above-market performance when the firm is above 4%." But 4% is not necessarily a ceiling, especially if you go back earlier than 1990. According to Howard Silverblatt at S&P Dow Jones Indices, IBM had a market value of $96 billion in 1985 -- 6.4% of the S&P 500. Here's the graphic from Leuthold Group:
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