How Apple ate Wall Street

“Mutual-fund investors aren’t supposed to have to pay attention to the fate of any particular stock. But like so many things with technology giant Apple Inc., the regular rules don’t seem to apply,” Ian Salisbury reports for The Wall Street Journal.

“While Apple’s stock has been hit hard in recent months — losing more than third of its value since September, including a 12% drop since missing earnings estimates on Wednesday — the Cupertino, Calif.-based company is still the most valuable name on the stock market,” Salisbury reports. “That distinction means it looms unusually large in millions of Americans’ investment portfolios, even if they’ve never glanced at one of its quarterly earnings reports. ‘We’ve never seen another company have as big an impact’ on overall market returns, says Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.”

Salisbury reports, “Just how popular has Apple become? It was among the top 10 holdings in more than 1,000 mutual funds last year, according to fund researcher Morningstar Inc. — up from just 11 in 2002, shortly after Apple introduced the device that started the gadget craze, the iPod. Overall, about one in four stock funds owns Apple.”

Read more in the full article here.

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23 Comments

      1. For a very long time I have been posting here that it is a nice $400 stock and have a buy order in place.

        My position is that Apple is coasting on the fumes of the late great Steve Jobs and others- some of who have departed the company- and Cook hasn’t a clue of what to do long term.

        The fanbois, the clueless, the followers and the manipulators ran the stock up over $700 and were talking about $1100/share just a few months ago.

        I have been calling Bullshit for a long time, having sold some in the low $400’s in November 2011. I stopped buying in the low $300s (320-330s).

        1. That is just opinion with absolutely nothing but conjecture to back it up. Jobs has only been gone a little over a year. What was Cook supposed to have pulled out of his ass in that time?

          1. It must have been manipulated up to those levels. Any stock can be manipulated one way or another. Look at Netflix. It’s value can go up or down huge amounts for such small things. Companies’ values seem to be based on whatever the hedge funds think they’re worth. Right now, Apple is worth nothing to the hedge funds and so Apple isn’t even worth what it is today from Wall Street’s perspective. It wouldn’t matter if Apple’s P/E was 5. It’s just not attractive enough to buy.

          1. Don’t give a sh*t is it carries weight in the market or not, but I was buying in 2001 when most of today’s Apple investors were still using Windows 98 or ME and had not a thought of buying Apple.

            Also have been saying the valuation was way too high and look out for a correction. I think from $700+ to less than $440 would count as a correction.

            It’s a nice $400 stock and the company has lots of issues going forward.

    1. Sure it makes sense… Just read AP above… Apple is DOOMED, DOOMED, I say.
      No one is buying its products.
      It has no money in the bank.
      It has HUGE debts.

      Why its a miracle that the doors are still open. !!!

      Quick, we should all run and buy Dell before it goes up 70$ a share…

      /s Just a thought

  1. Adding insult to injury is the rise in MSFT in early trading, after reporting so-so results and avoiding any questions about the sales of Surface. But karma is a bitch, and there will be a correction for all of this.

  2. Look, it’s a game, a test of wills over who is in control over Apple’s valuation – the analysts or Apple. Because from the analysts’ point of view, the only way they can get their valuation back is Apple starts doing cheaper products and becomes more concerned with marketshare. The markets don’t care about quality, but Jobs thumbed his nose to Wall Street for over a decade, did things his way and was winning. This is payback.

    1. SJ was a believer in expanding marketshare but not at the cost of decreasing product quality or user experience. Here is quote of a 2004 Newsweek interview he did;

      If that’s so, then why is the Mac market share, even after Apple’s recent revival, sputtering at a measly 5 percent? Jobs has a theory about that, too.

      Once a company devises a great product, he says, it has a monopoly in that realm, and concentrates less on innovation than protecting its turf. “The Mac user interface was a 10-year monopoly,” says Jobs. “Who ended up running the company? Sales guys. At the critical juncture in the late ’80s, when they should have gone for market share, they went for profits. They made obscene profits for several years. And their products became mediocre. And then their monopoly ended with Windows 95. They behaved like a monopoly, and it came back to bite them, which always happens.”

    2. Why is wall street so obsessed with market share if it doesnt bring in more profits? If Apple doubled its market share but earnings fell would it get a higher valuation? I dont think so. They have been trying to tank AAPL because they have been pushing Nokia and RIMM. Thats why all you keep hearing is competition competition competition. When they are done pumping those dogs they will jump back on the Apple band wagon at a nice dirt cheap valuation and leave a bunch of retail investors holding the bag with those dogs.

  3. Apple has no impact on the market whatever. Apple delivers excellent products with very good margins in record numbers. What is impacting the markets is speculators and traders, not Apple or its investors. The problem for investors is trying to figure out how many layers of BS are impacting the current price speculation.

    1. quiviran,

      Wow… spot on. I have read a number of Blogger/ANAL…yst articles that show the writer has NO idea of what is going on, only that the writer has been thumbing thru anti-apple blogs to write their article.

      Sad, just so sad.

  4. Apple’s $700 price was the result of an irrational feeding frenzy of buyers led on by pundits spouting exuberant predictions with no basis. It was getting the pundits readers. Now there’s an equally irrational feeding frenzy sell off fed by those same pundits. Last year one of them was spouting $2000. Now they’re spouting $270. Sheer unsubstantiated drivel. During more rational periods of Apple’s stock growth (2009-2011), it grew at about $10/month. A trendline over that period puts it at about $530 now. It’s still a hold or strong buy by every rational investment firm that has a clue. There’s no reason other than irrational expectations, and a lot of negative hype that today’s investors seem to latch onto that AAPL isn’t still one of the best investments you could make. Especially now.

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