Market Currents
Saying Apple (AAPL) has reached the "trading toy stage," Robert Sinn reminds of the track record...
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Wednesday, March 14, 2012, 3:11 PM ETSaying Apple (AAPL) has reached the "trading toy stage," Robert Sinn reminds of the track record of other stocks that have recently garnered the public imagination - it's not good. "Volume and volatility create action, excitement, and opportunity. However, the action we are currently witnessing in Apple is not healthy."
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Right now, equities are the only place to put that free money... nothing else is as "safe", short memories and greed will sure to be punished again and again.
To me, they suggest a run to $700 over the next 12 months, barring, war, tsunami or such cataclysmic global event(s).
I also expect the stock will occasionally pull back a bit now an then on that run. I have no idea what the upper limit on the stock might be in years to come, but like other once bright gems, it could slowly lose its luster over time..
At present value, a wise investor either has profit protection in options or stop limits in place, IMHO
Additionally, please explain why you think there will be a correction. Is Apple overvalued? Is the stock prices some how not in sync with Apple earnings?
I would love insight. Currently, I own two macbook pros, a macbook air, 2 iphones, and 2 ipads. I cannot imagine life without Apple. Furthermore, every time, and I mean every time, that I walk into an Apple store, it's packed wall to wall with customers.
Why is that? I think it's because once you buy an Apple product, you're part of the Apple family. You may think what I'm saying is stupid, but take the iphone as an example. When you buy an iphone, and you have issues with it, you go back to the Apple store and they help you. You buy a Samsung, Nokia, or HTC, and you have an issue with it, what do you do? Go to the at&t or Verizon store (two crappy options).
So I'm curious, when will this correction happen?
However, all securities are subject to market risk, no stock has ever experienced a pure linear run to its apogee. Apple has had days when the share value retreated with the broader market in the run from near bankruptcy, when Steve Jobs returned as a "consultant" until the explosion of the past year.
I'm not sure how you define a correction. But a pull back in the 5% - 10% range is not unprecedented. If it were to do that, I would use the "correction" as a buying opportunity.
Assume you accept a 5% - 10% drop as a correction. If so, it could come any time, not only for business reasons, but for an unexpected event or a general market retraction or any other phenomenon your imagination can drum up.
The old cliche is greed and/or fear trump logic when in near term stock valuation.
In the long run, true value can always be found in the numbers. (Sales, revenue growth, margin, cash flow, etc.)
Ever since I bought an iPod nano and its battery died on me a couple or so years later, leaving me with a worthless product (unless of course I was willing to order a replacement from, and to be fitted by, Apple at around 98% of the original cost of the thing) I've vowed to stay away.
Still, I believe they probably do make great products, and have something of a religious following (of which you are an example, but you are happy, so there is nothing wrong in that), so there is a fundamental backdrop to all this bullishness. But then they do say, don't they, that every bubble has a fundamental underpinning to it.
It's just when expectations get out of hand that things get messy.
I broke a brand new Macbook LCD. Was my wife's. She was in law school and could not tolerate weeks with no computer. I bought her a new one, and set about getting it fixed. Apple declined and my insurance declined to fix the box. I priced a replacement LCD from Apple. Too much. Sold it on eBay for $750. When I went to cancel the AppleCare agreement, they refunded the entire price of the AppleCare PLUS the computer, since there was a recall on for the LCDs and my computer was involved. $1500. I wound up $750 to the good.
I needed a replacement part for a power supply. Went to the Apple store. Tech said "We don't sell that part, but here, you can have this one". No argument, no stress, no cost.
I got an iPad2 for christmas. It was a 16GB model. I decided I needed 64GB. Called Apple and bought a new one. They threw in a $69 leather cover for free, just because because.
I have a dozen other positive customer service stories from friends. You are missing out on great products, great service, a great company based on a $150 problem. I respectfully and honestly suggest you should perhaps reconsider. See why it is that folks get 'religious' about this outfit. It'll make your investing wiser, I suspect.
Good luck, regardless.
Myself, I will not go back to them. I do actually have a Hackintosh, that I built myself but only cos I didn't really have a choice (there was some Apple-only software that I needed). I was damned if I was going to pay $2000 for a shiny silver box. Some of us don't forget, you know :-)
are you not cutting your self short?And how come you have such strong oppinion on some thing you do not own?Why don't you look at the facts....facts..in the past or the present,the values the demand...
THE POSSIBILITIES,and while you do that make sure "The Train" do not run you over....Is wonderful world,and life is beautiful...oh yes count your blessings and find a way to buy some AAPL.....
You will feel even better. Califa
...and the stock chart goes parabolic...
...and the product the company produces is highly popular but not essential to life...
...and the industry its in is notorious for sharp, unexpected swings in consumer sentiment...
...and its hyper-popularity begins to spawn a small but fast growing backlash...
Well...a sharp and violent correction may be in the cards sooner than later.
And remember...I, too, think AAPL is cheap here.
But "value" and "trading psychology" have a long history of going to war.
Its NOT different this time.
I've yet to see an article which researches exactly who all these new buyers are? With 50.6M shares changing hands today, most suggest that this is not the small investor's irrational exuberance rather institutional plays. I agree with Robert Sinn's hypothesis about the health of these trades, but if it truly is predominantly institutional buying, we're talking professional not small fry like myself. They would no better, eh?
No matter what traders and the bulls may do to today's stock price, it is an amazingly well managed company, and that is what will drive value in the stocks. Every company should run in such an efficient and focused manner.