Fair Value of Gold from Fair Value of Apple Stock?
Afasilver shared an interesting post in which Apple stock was determined by various fundamental models and Wall Street estimates to have a “fair value” of $157.62 More interesting, Apple’s current price of $152.29 suggests these models and the market are nearly 97% in agreement.
So if we took that fair value estimate of $157.62 for AAPL stock, could we use that to find the fair value of Gold?
If we draw up a long term ratio chart of AAPL vs $GOLD, we see a long term upwards sloping channel. In late 2014 through 2015, the AAPL:$GOLD ratio appeared to hit a resistance level around the 0.100 ratio level (Apple shares priced 1/10th or 10% the price of Gold). The ratio broke through the 0.100 level in 2017, but after a 38% drop in the ratio in late 2018, we see that the ratio may test the 0.100 level again. In addition, another retest of the 0.100 level may coincide with a test of the top rail of a long term upwards sloping channel.
If the “fair value” of Apple stock is $157.62 and the AAPL:$GOLD ratio tests the 0.100 level, that implies a possible “fair value” of Gold to be $1,576.20
That’s an interesting possibility and I’m sure my gold miner positions would love that! -Harry
I heard of Apples and Oranges
This is a whole new level
🙂
LOL, the apples to oranges ratio