“Apple, as hedge fund managers are well aware, is one stock that always bounces back,” Philip Elmer-DeWitt reports for Fortune.
“Whenever I see a chart like the one [that] traces the trajectory of Apple’s (AAPL) share price over the past 36 days, I’m reminded of Jason Schwarz’s ‘Apple: Seven Reasons Shorts Love It,'” a supremely cynical view of the stock market that may be the best thing The Street published in all of 2009,” P.E.D. reports. “The nut of his thesis can be boiled down to two sentences: ‘If you can keep a good stock down,’ Schwarz wrote, ‘then you are able to load up for the ride back up. It’s like a slingshot — the harder you pull, the more propulsion you generate.'”
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P.E.D. reports, “Apple, as Schwarz reminds us, is the favorite punching bag of the hedge funds and institutions that control more than 70% of its shares. It’s a pretty good bet that the earnings Apple is scheduled to report in less than two weeks will set new records, and savvy fund managers know this. If they were dumping the stock in early June, it’s only because they were planning to snap it back up in advance of Apple’s July 19th earnings report.”
Much more in the full article here.