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Apple’s size can move markets up –- and down
A customer tries out the Apple iPhone 5 inside the Apple Fifth Avenue flagship store on the first morning it went on sale on September 21, 2012 in New York City.
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Stacey Vanek Smith: How big is Apple? Well, it accounts for about 5 p[ercent of the S&P 500 stock index and more than 10 percent of the Nasdaq Composite Index. There are even predictions iPhone sales could give a lift to the U.S. economy.
Alec Young: I don’t think we’ve ever seen one company move the needle the way that Apple does now.
Alec Young is a global equity strategist for S&P Capital IQ. He says Apple’s size has been great for markets.
Young: The fact that Apple has such a large weighting in the S&P 500 index has been good because Apple’s been doing extremely well, and it’s one reasons the stock market has been doing very well.
The S&P 500 is up 16 percent this year. Apple alone is responsible for more than 2 of those percentage points, says Michael Farr, chief investment officer at Farr, Miller and Washington.
Apple’s share price has added $300 so far this year...
But what Apple has given, Apple could take away
Michael Farr: If Apple takes a big hit, certainly markets are going to come down.
And we’d all suffer, says Georgetown finance professor James Angel.
James Angel: This is what I call Apple risk. If Apple implodes, every investor is going to feel the pain.
Angel says if you own shares in a mutual fund, you probably own Apple stock. If you’ve got a 401K, it’s probably got some shares of Apple. And if you invest in those prudent index funds, Apple’s a big slice of that, too. Which begs the question…
Angel: Is that a dangerous thing?
Angel says not yet -- and as long as those new iPhones sell well, we don’t have to worry about that.
Vanek Smith: So, for the sake of the economy, should we all run out and get the new iPhone? Is that what you’re saying?
Angel: No. (laughs)
But it couldn’t hurt…
In New York, I’m Stacey Vanek Smith for Marketplace.
Apple's size is also big enough to create a level of oppression that has finally exploded in China's version of the Haymarket Riots:
http://www.engadget.com/2012/09/23/foxconn-taiyuan-riot/
But that's fine with all of you stockholders. You've always loved slavery, even in 1861.
>Which begs the question…
Oops, you just misused that phrase, Ms. Vanek Smith. To "beg the question" does not mean to prompt or raise a question. Begging the question is a logical fallacy. Check it out here:
http://begthequestion.info/
Instead of talking about Apple's size, what is amazing is how long it took people to get Apples value and offering. Magazines, experts, competitors all were laggards in adopting Apple. Perhaps another aspect is how few reall visionaries there are in the business world, yet they all like to call themselves world leaders. Today my girlfriend took two clients and her production department head to a meeting in her new VW Taureg Diesel. They were all surprised that volkswagen was aking such a well designed, comfortabe, powerful, clean car. The story here s that it sure takes people a long time to get which way the wind is blowing.
