There is a little known way that you can use the Jobs Indicator to determine the very best time to buy Apple (NASDAQ:AAPL) stock. Whenever Steve Jobs decides to sell a large portion of his stock, that is the ideal time to buy Apple (AAPL) stock.
In the first chart, we can seen that Steve Jobs decides to sell a large portion of his stock 7 years after the peak in the price and 79.6% from the 1991 top. Apparently, Microsoft (NASDAQ:MSFT) seemed to think that AAPL was cheap at twice the price that Jobs sold out.
I don't know the exact reason Jobs sold at the bottom in 1997. However, you have to admit that as an indicator, Jobs selling the stock at the time was the greatest indication of when to buy Apple stock. I wonder if Microsoft still has that $150 million investment in AAPL. If MSFT still holds that position, the value of the Apple investment is now worth $5.7 billion.
In the charts below, you will see the other time that Jobs "sold" out of Apple (AAPL) stock. This is a more controversial case of selling, surrendering or voluntarily giving up his options since it was later found that
...Jobs was granted 7.5 million stock options in 2001 without approval from the board of directors and documentation was falsified to indicate a full board meeting had taken place as required, according to a report.
Jobs was later cleared of possible criminal charges related to actually falsifying documents. Instead, two of his most loyal staffers were thrown under the bus. The reason for the ill-timed transaction in 2003 might not be reflective of Steve Jobs' "judgment." However, whenever Jobs gives up a large portion of his holdings in Apple (AAPL), although it doesn't happen often, there seems to have been great opportunities to pick up shares in the stock on the cheap.
Arends, Brett, Steve Jobs makes the worst trade ever, May 18, 2010, Wall Street Journal.
Cohn, Michael, Report: False Docs on Steve Jobs' Options, Red Herring, December 27, 2006, http://www.redherring.com/Home/20478
Kim, James, and Edward Graskamp. "Why stock options still make sense: news reports herald their demise, but two consultants argue that stock options--used by 90 percent of the largest U.S. companies--remain the cornerstone of U.S. equity compensation, and for good reasons." Financial Executive 22.2 (2006).
Disclosure: No positions