“A half-trillion-dollar market capitalization, like that of Apple Inc. (AAPL), trading at an average of $11 billion a day, kicks up a lot of uncertainty dust,” Peter F. Way writes for Seeking Alpha. “That makes it hard to keep perspective on where this item, with a dollar price at some ten times the average stock, may be headed next.”
“How its prospects are being perceived by the big-money funds – the players most able, and most likely, to move its price – are keenly and carefully watched by folks who help herd this flock, and who make an enviable living at it – the market-makers,” Way writes. “Every day they are in constant contact with the trading desks and portfolio managers of the 1,924 institutions and funds holding over two-thirds of the stock.”
Way writes, “In sum, now looks like a better-than-average buy time in AAPL for the patient, long-term investor. Market-sensitive, time-efficient investors will get their chance after the stock’s recovery has begun and fair-weather followers clamber to get back on board.”
Much, much more in the full article – recommended for AAPL shareholders, current and prospective – here.
Broken link? Hey, did I get a first post?
Ooooh I did get a first post, drool. Now to wait for the link to get fixed. Maybe it’s this.
http://seekingalpha.com/article/1124331-apple-2013-price-hedging-by-market-makers-protecting-their-long-and-short-exposure-risks
Remember folks, those big funds that hold AAPL are where accounts the retirement accounts (IRA, 401K, etc.) of you, your friends, your family are.
some people bought this at 700 they might not get their money back for years its sad
Look, anyone who bought at $700 just wasn’t thinking. That’s sad. $705 was its all-time high. You just have to be smarter than that. Stocks have ups and downs. Nothing goes up forever. Apple had been on an incredible run. No, it wasn’t smart for anyone to buy at $700. But yes, that is sad. Just because you like a company and its product doesn’t mean that it’s a great investment at or near its all time high. Think about that for a minute. Okay that’s long enough. Yes, that is sad. Did someone who bought in at $700 think that it would reach $1000 in another month? Yes! Hell yes! Those are some of the very people who helped drive the stock to $705. Along with all the funds that felt compelled to join the crowd. It’s rise to $705 so quickly is very easily explained. Too much too quick. Too high too fast. It was due for a drop and anyone who has invested for any length of time and paid attention, could see that. Thus the big drop. Overdone? Perhaps? Perhaps just like the run-up the rundown is overdone also? I guess we’ll see during 2013 won’t we?
What’s wrong with buying at $700? Nothing. Apple will likely earn $56+ a share this year, maybe $60. Factoring in the cash, that’s a PE of around 10, not expensive at all, in fact, it would be cheap.
You could take your argument and flip it, Apple was held down for too long, too slow for too long, blah, blah, blah, reversion to the mean, blah, blah. I think you’ll see the stock reverse and shoot up again, because that’s the way Apple rolls. Fast up, fast down, but always trending upward in the long term.
Of course, I did not buy at $700, I bought at $86 in Feb of 2007, after seeing Steve’s iPhone keynote.