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Apple - Back To Normal

|Includes: Apple Inc. (AAPL)

After a brutal run from January to Mid of April, Apple (NASDAQ:AAPL) stock price seems to get back to normal - or what investor would see back in 2010 and 2011.

There are couple of signs:

  • Institution owner goes from 70% (from Jan) to 71% (March), now get back to 70%. That is to say many big institutions were consciously or unconsciously buy up Apple stocks. This causes a bigger than normal increase of the stocks price. (60% maximum post-earning rather than 15%.)
  • Market sentiments are more sober: in SA, there are more posts which have negative sentiments. Pundits start to ask more on how Apple can fail as a company. Different scenarios, mostly based on fear and imagination, are discussed. These stories entertain me a lot, yet I am sure they also scares the fainted hearts. Are these negative sentiments justified? More than often, they are not. Yet, it is good to have some cold water in an overheated market.

What should I do? Oh well, as I have been buying the stocks from 2006 to 2008, 2010 to now. I might just as well buy a little bit more. The most fundamental change was that Steve Jobs is gone. But in short term, the company will still have 1-3 years of pipeline to use. In a longer term, these bunch of smart people will naturally figure out something given their resources and market dominance.

So I don't see why not to buy more. I am yet to see a very strong argument on why Apple should fail miserably. Google Glass made me feel worry for a while but my knowledge in optics assure me that such a project is not easy - for starter, how they could calibrate the device to every human eyes? Those problems, just like speech recognition, would not be solved overnight.

Peter Lynch once say if you couldn't find why a stock has issues and got beaten up so much, then you know you find gold. I still believe Apple is one of those stocks.


Disclosure: I am long AAPL, GOOG.