July 13, 2015

Short Apple shares is Doug Kass biggest position currently

My most important takeaway today is the observation that Apple  (AAPL - Get Report) -- "The Market's General" -- has been shot.

Apple's shares dropped $2.50 at one point today, breaking below $120 a share and moving through some key technical support.

Whether the shot is fatal or just a flesh wound can and will be debated.

Jim "El Capitan" Cramer thinks the wound is only superficial, but I have more serious concerns that extend to the intermediate term.

Of immediate concern is that Apple's second-largest market is China, and the potential negative "wealth effect" from lower stock prices there must now be considered.

But an even more important factor may be that if the current market malaise turns out to be a more-severe decline than many expect, Apple is likely to serve as an ATM for investors who want to raise cash.

The bottom line: Apple's shares - which represent my largest individual equity short -- have been hospitalized. The diagnosis remains unclear, but stay tuned to see how far the mighty might fall.

Position: Short AAPL