One more culprit behind Apple’s sell-off

“Over the past several months, much Foolish ink has been spilled over why Apple has had such a monstrous pullback from its all-time highs set on the same day that the iPhone 5 launched,” Evan Niu writes for The Motley Fool. “Inevitably the sell-off is tied to everything from perceived iPhone 5 shortages (which are now effectively gone), possible capital gains tax increases, increased competition, and many more.”

“Here’s another culprit to add to the list: the shorts are piling on,” Niu writes. “Investors should keep something else in mind, though: those shorts are about to get squeezed out when Apple reports its monster fiscal first quarter in January.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

27 Comments

    1. Just like so many other so-called ‘experts’, Evan Niu is an idiot, throwing theories against the wall to see what sticks.

      Here’s a fact for you: Since September 21 (the day AAPL hit $705) AAPL’s Put/Call ratio has been in free fall, bottoming at current levels (0.67:1). This means that the Shorts/Bears are in headlong retreat. While the unwashed have been selling on the slightest unfounded rumor, the Institutions have been acquiring shares and Call Options in unprecedented numbers.

      Look it up and do the math yourself, but be sure to remove your tinfoil hat first.

  1. I’ve been buying on all of these recent dips, including adding some more shares late this morning. It will pay off when Apple reports an absolute monster quarter next month. The shorts will be running for the hills with their pants on fire & I’m gonna laugh like hell at every single one of them.

    1. Do tomorrow, or not do tomorrow if they are short sellers.

      That “cares about” (which I think it’s understandable ) however does not stop the, at times blatant, stock price manipulation.

  2. Just bought my wife AppleCare for her new iPhone 5. The Apple Store was jam packed with people however the Samaung Island Kiosk had only a few people who looked bored. Looks like Apple will do fine. Soon the shorts will all be burned to Ash once the results start to get reported. AAPL will have $140 Billion in cash on hand by December 31st. There is no competitor that can come close to that. Once AAPL rids itself of Samsung made components who will doubt it’s strength.

    1. Move? Do you mean move the share price higher? Do you mean AAPL investors won’t be able to realize profit if it does go up because they didn’t take their profit at its all time high in September and have ridden it down $200/share? So now they just hope to some day get back to even? On that premise I agree. But I believe anyone who has been watching their profits turn into massive losses will never ever let that happen again. In the future they will take their profits off the table when appropriate. Look at all the profit that is “supposedly” coming soon. If you are a buy and hold investor you believe in AAPL and its potential growth going forward. So you absolutely believe that at $509 it’s going higher. So you absolutely have let $200 per share go down the toilet because you know AAPL is going backup! No, that won’t happen again. Or do you mean AAPL investors won’t be moved to buy more shares? Or sell more shares? Just what won’t they be “moved” to do Pete?

      1. Can you make more money by timing the market? In a perfect world, yes. If you’re smarter and faster than everyone else.

        Me? I’m a buy & hold type. Bought at $7, and I’m holding. You might be able to do better by jumping in and out, but statistically market timers don’t get it right. It’s hard to know where things will be in a day, or a week, so I’m betting on Apple’s long-term future.

        1. Yeah, you bought at $7. Sure. Try again. Besides, buying at any point is not what’s important. It’s how much you have made that counts. You aren’t ahead with paper gains. Try paying your bills with them. And you don’t have to be smarter or faster than everyone else. You simply need to learn to take your profit on huge gains. Is that day trading? No. Is that market timing? No. It’s just common sense. You are just hiding behind “I’m a buy and hold investor” as though it makes sense. It does not. Surely you won’t hold forever? Right? Will you never sell? Die with AAPL shares sitting in your account? No, I don’t think so. So you should learn to take profit when it’s there. On your terms not when the market is down (like now) and sell because you may need the money. Why would you do that? Again, are you holding forever? Didn’t anyone teach you about investing when you were young? Holding is not only greedy but foolish. Fear and ignorance is what keeps many investors from managing their own finances. Buy and hold is not responsible managing. It’s ok to sell. You will be given a better re-entry point. Or do you think stocks go up forever? AAPL certainly doesn’t. Does it? No, you didn’t buy at $7 any more than all the others that make that claim. My guess is that you’re way underwater and wish you had sold some or all in September. I’m guessing you have that “kicked in the stomach” feeling every day. $200/ share. That’s a lot of money.

            1. Same here, I bought my first shares at just under $10/share in 2001 which split adjusted would be under $5/share.

              Some of us didn’t switch to the Mac or return to the Mac. We never left. Seeing OS X and iTunes gave me the green light. Just wished I had bought more- a lot more.

            2. Exactly. I never left the Mac.

              I’ve owned a Mac from the early days. But holding my first iPod was the moment I knew I wanted to own AAPL.

          1. Okay it was $14, but that was before the split. And yes, it’s a better strategy. If I had been profit-taking I would have sold at $20, and $50, and $100, and $250. Instead I kept buying.

            I didn’t sell in the way down simply because I’ve seen 30% drops before. And I’ll see them again. I’m in it for the long haul.

            1. Selling does not keep you from buying. You simply buy back at lower prices. You are then buying more shares because they are cheaper. Pretty simple. At least you do understand that. I sold at $700. Inching my way back in now. Will see what Monday looks like. It’s nearly $200 per share cheaper for me. And I don’t day trade. Or market time. I simply know that at some points I have to clear the table. Who wouldn’t at a stocks all time high? C’mon that’s just intelligent investing. As for anybody seeing a 30% drop in their stock value and bragging about it? I think that speaks for itself. I don’t buy shares as options are a much cheaper way to invest in something like AAPL. But shares or options, they’re much cheaper here than on September 21st. And now I can make that extra $200 per share again if AAPL hits $700. It’s just common sense.

            2. If you bought at $7, sold at $700 and bought back in at $500-510 just now, congratulations. You’re a smarter investor than I am. Bravo. Good for you. Pat on the back.

              Me? I’m not so smart. But my strategy is working. I cannot complain about the returns I’m seeing.

              When you’re jumping in and out, you are on average missing as many as you’re making. That’s just statistically true (over all, investors who jump in and out do worse). If you’re doing better, again bravo.

            3. I do not jump in and out. Again, you are unable to defend your actions so you try to attack the logical thinker. You must really be hurting. Sorry bout that. Next time it runs way,way up take some or all off the table. May only happen once or twice a year. Simply buy back when it dips. It’s ok. It doesn’t hurt. It only hurts for those poor souls looking at all that money and opportunity missed. Good luck next time.

      2. Timing Apple is much harder than it sounds. I don’t think too many non institutional investors are successful at it. The stock has to drop an awful lot for you to get back in low enough to cover your capital gains taxes and loss of dividends.

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