The psychology of trading Apple (AAPL) stock

“The interesting thing I find about Apple comes from talking to eleven different professional portfolio managers who I worked with these past 16 years. To the person, all eleven portfolio managers had nothing but glowing things to say about Apple… The eleven managers expect the fiscal 4th quarter ending September 30 to be excellent and forward guidance to be solid and comforting. But, these managers have recently been net sellers of the name. Collectively they have sold between one third to one half of their positions,” Georges Yared reports for BloggingStocks. “Why?”

“In tough times, portfolio managers try to protect two things: a portfolio’s total performance and their annual bonuses,” Yared reports.

Full article here.

[Thanks to MacDailyNews Reader “Linux Guy And Mac Prodigal Son” for the heads up.]


  1. Last year, this month, AAPL moved into the low $50’s from a fairly solid position in the mid-80’s. That’s a 40% drop in a relatively short time.

    This year it moved from the high 140’s to the high “teens”, representing only a 30% fluctuation.

    The bears aren’t as powerful as they once were!

  2. Vast majority of stocks keeps fluctuating on this familiar trend, where the late summer forces them into a slump. Among the professionals on Wall Street, there is a saying “Sell in May and go away!”.

    As the first poster here said, the summer bears aren’t as powerful as last year, even with the tremendous help of junk mortgage fallout.

    AAPL wiill soon again be a powerful, high-flying stock that it has been for the most of past four years. Those who put $10,000 into AAPL only four and half years ago now have $100,000. Ten-fold increase in stock value doesn’t easily happen to a large-cap stock unless a company behind it has insanely great product(s) and insanely precise execution.

  3. Stock trading often has nothing to do with what the price is right now. Many of these fund managers may have bought Apple at a much lower price, and thus may be taking this correction in the market as an opportunity to sell stocks with significant capital gains to offset losses in other stocks. They may be buying Apple as they are selling Apple.

    Also, future predictions come into play, not just for Apple’s performance, but the market as a whole. With any correction, it may be prudent to move from a more heavily weighted stock portfolio to one which holds more bonds and other such investments. This helps protect against a volatile market. If portfolio managers are overweighted in technology, it makes sense to sell Apple (something they made a profit on and may own too much as one stock in a portfolio) to purchase tax-free bonds or other bonds.

    It actually can be complimentary to Apple to have its stock used in such a manner, because it is further evidence that Apple has been highly valued as an investment and can be used to leverage growth in a client’s portfolio.

  4. Either you are an owner or a trader. If you research the company and believe in it, you are an owner. Rather than selling on the recent dropoff, I took the opportunity to buy in more, and gained $500 in value in a day.

    Apple’s going nowhere but up, and I’m sticking with it.

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