How Gold, Oil, and Syria Really Mix… Plus "3 Strikes Against Apple"

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The markets are very complicated at the moment, which is why now's an ideal time to reach into the Money Morning Mailbag and address your concerns.

The goal here is simple: To provide understandable, actionable, and, of course, profitable answers to your thoughtful and extremely insightful questions.

Let's start with Syria and what the conflict really tells us about gold and energy…

Q: "Does the president's speech change anything (in Syria)?" ~ Robert P.

A: Nope. What's interesting in this case is that most leaders throughout history spend their time debating an exit strategy. President Obama seems to be hunting for an entry.

This points to opportunities in gold and energy. The key is not so much the commodities themselves, like most people think, but what conflict says about the need to own them.

Gold is really a value play that's very pure and simple, if you pardon the pun. Conflict places every fiat currency at risk, and that means the need to preserve value overrides price.

Energy is much the same. There is no doubt that a broader conflict would spark higher energy prices, but unless you're nimble and equipped with institutional-grade trading platforms, chances are you won't be able to harness the volatility. But, you can absolutely get in front of the need to find new sources away from the shooting. Exploration and equipment companies are a logical alternative with momentum that will continue long after the shooting starts… and stops.

And finally, the euro.

Europe is far more exposed to fighting in the Middle East than America because of where our oil is sourced. This speaks to a weaker currency as prices rise in conjunction with any conflict escalation. Diversified European companies are a different matter because many do business in dollars. I'm talking specifically about the euro itself.

Q: "What do you make of Apple's big slide?" ~ Thomas W.

A: Apple's got a real innovation problem post-Jobs. Tim Cook is just not up to the task, which is why the company is losing market share in almost every market segment. The latest iPhones move – introducing the premium 5S and the inexpensive 5C for emerging markets – makes it clear that the company wants profits over market share. That's not going to be enough at the end of the day.

It's worth noting that both Palm and RIM adopted similar philosophies on the way down. Droid is now strong enough to "pick" Apple.

There are three strikes against Apple: slowing innovation, a lack of differentiation, and margin compression.

Short Apple or, if you're not comfortable doing that, consider running some really tight stops to protect your capital. Longer term, there are better opportunities out there. It simply doesn't make sense to get "pruned."

Q: "How risky are bonds now… really?" ~ Andrea J.

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About the Author

Keith Fitz-Gerald has been the Chief Investment Strategist for the Money Morning team since 2007. He's a seasoned market analyst with decades of experience, and a highly accurate track record. Keith regularly travels the world in search of investment opportunities others don't yet see or understand. In addition to heading The Money Map Report, Keith runs The Geiger Index, a reliable, emotion-free guide to making big money and avoiding losses, and Strike Force, which aims to get in, target gains, and get out clean. In his weekly Total Wealth, Keith has broken down his 30-plus years of success into three parts: Trends, Risk Assessment, and Tactics – meaning the exact techniques for making money. Sign up is free at totalwealthresearch.com.

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  1. Malcolm Thomas | September 13, 2013

    A new subscriber and enjoying your articles every day.
    Silver and Gold is very erratic lately,when do you think they will start breaking out and pushing the old highs

    • H. Craig Bradley | September 15, 2013

      SLEEP WELL MY FRIENDS

      Gold peaked two years ago after a solid 12 year run. So, Gold is probably headed farther down, possibly below $1100. I would like to see it eventually get down to something in the neighborhood of say, $850. I might get interested at that price, but face it, I've never been able to time or predict gold and I don't get aroused by having yellow coins stuffed in my mattress.

  2. H. Craig Bradley | September 14, 2013

    SETTING SUNS

    Apple is really just another star that is fading, albeit slowly. There are no more Steve Jobs at Apple. I don't think he would have tolerated a true corporate rival while he was in power. Steve Jobs ego would not have allowed him to power-share with anyone either. Tim Cook is just a caretaker, hand picked to shepard Apple into former-star status.

    Apple's slow decline really matches-up with the one America is going through financially, economically, fiscally, monetarily, socially, and as a former superpower. We lost "superpower" status after the Benghazi Embassy Assault and the Syrian Debacle. When Iran and Putin are in- charge, you know we can not be a superpower anymore. We are done, in that respect but Apple may have some more room to run, depending on the market.

    If we have a market "blow-off" top in which the largest, best known names in select sectors get most of the investors attention and money in the next year, then Apple might make a sort of comeback to maybe $600/share. You could sell at that time and take chips off the table. Tim Cook needs to be a bit more enthusiastic and excite the market with good news rather than we just released I-Phone version 3.1 ( That's so Microsoft!). Certainly not "amazing things".

    Apple's biggest failing to date is not securing a long term contract with China Mobile. Incidentally, that was Dell Computers failing too (not expanding markets in Asia). Our tech companies need to expand in the emerging markets to grow revenue because the U.S. economy is too hobbled by debt, poor political leadership, uncertainty, and rising interest rates to help them grow much faster.

    Tech. companies need the volume boost from China and SE Asia to get their revenue going in the right direction. If they ever do, their stock should follow. So, hold your fire for now, but realize Apple's glory days are probably gone for ever. America and Apple will be around for a good many more years to come, but will be reduced in stature in either case. I don't think anybody much cares either.

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