“From the start of last year through its all-time closing high on Sept. 19, Wilshire Associate says, Apple (AAPL) rose 73.5%, becoming the most valuable stock in the history of capitalism and accounting for an amazing 12% of the return the entire 3,684-stock Wilshire 5000 Index posted during that period,” Allan Sloan writes for Fortune. “Then came the fall, and by this Jan. 24, Apple had dropped 36% from its high. During that decline, calculates S&P’s numbers whiz Howard Silverblatt, Apple’s stock fell by more than the entire market value of Microsoft (MSFT), once the world’s most highly valued company.”
Sloan writes, “What can we retail investors learn from observing these gyrations? That no matter how hot a company seems to be and how limitless its future, some ancient verities of investing still apply.”
3 lessons for Apple shareholders:
• Thou shalt not run with the herd, lest ye be trampled
• Thou shalt not fall in love with a stock
• Thou shalt not believe in the infallibility of a CEO
Read more in the full article here.
MacDailyNews Take: In the words of a MacDailyNews reader’s recent email:
Hindsight is 20/20 and, oh woe is me and whatever shall I do, even after this recent, baseless beatdown, my AAPL shares are only 45-baggers now!
Related articles:
Cody Willard: Apple stock will hit $1,000 sometime in 2014 or 2015 – February 5, 2013
Why Apple stock is likely to stage a dramatic rally within the next 10 weeks – February 5, 2013
Barclays: Cash flow strength, reversal of accruals may help Apple stock – January 30, 2013
Carter Worth: Apple stock is an ‘epic bounce candidate’ – January 28, 2013
I had glanced and misread the headline. I had this image of a large sweaty Steve Ballmer dancing through the Wall Street emporium chanting: “Manipulators, manipulators, manipulators.”
Then I realized it was 3 lessons for Apple shareholders, and not Wall Street Stock brokers.
One out of three ain’t bad. I bought low and didn’t sell high, yet.
Not running with the herd is good advice. I bought AAPL when it was $64, $125, $250, $325. A few times I sold a few shares when I thought it was high and bought new ones, losing a share here and there. Now I just leave it alone. It drops wildly every year, especially when the news is good. In the years I’ve owned the stock it has ratcheted up consistently. I believe in the company, even when Jobs was out of it. The Mac Performa ran circles around the PC crap. The AAPL stock fluctuations has more to do with speculative gambling options traders, hedge manipulators and incompetent frenzied journalists than it does the company’s health, vision or products. Apple continues it’s remarkable course regardless of the irrelevant stock tides. When economic times get really tough, investors will latch on to the safe haven of AAPL. And I love being part of a progressive ecosystem. Oh how I wish Apple would correct the fraudulent vote counting system in the US! We could all benefit from direct democracy. I’ll call up the Vote App on my iPhone and hit yes to life, liberty and the pursuit of happiness.
Very good!
Yes!
It is important to understand that the stock market focuses on future potential rather than solid results. For example:
Amazon runs at zero profit, stating that it is investing in new markets to grow. The assumption is that sometime in the future Amazon will realize large profits after successfully establishing itself as the major player in those markets.
Apple on the other hand has already established itself as the major player in the music player, PC, phone and tablet market. They capture the majority of the profit from these markets even if the market share is not there.
Microsoft has for over a decade dominated the PC OS and productivity suite market and although its share is dwindling slowly it still makes hefty profits from its core markets. In the last quarter they made record revenue and good profits despite their difficulties in new products.
Amazon’s stock price is through the roof because there is an intangible promise of future growth.
Apple has established itself as the major player in its markets and the promise of new growth from other markets is unclear. As a result the stock is not growing as we would have expected.
M$ are rely on its established markets and has its stock price has grown for 10 years.
So I think we have to understand that fundamentals do not play a large role to large growth in a stock price. It’s all about convincing investors to buy into a stock that has huge growth potential.
Apple’s stock will grow slowly unless it comes up with new markets (more than likely).
Yes. Thank you.
Well said, thank you. I think it’s important to point out that part of the growth concept is still influence by T. Malthus. Since the advent of the industrial revolution the human population has experience near exponential growth. It won’t be long before Gaia starts taking billions of lives and investing those profits back into the ecosystem.
Mind you this would all have been moot if the human population had figured out a way to create a sustainable population model, certainly the technology is there. Mind you as the species is part of Gaia it might self administer some population reduction of it’s own. Certainly the technology is there as well.
Should be fun to see the crash, that is whoever survives it.
Nice income from dividends for long time accumulating investors, despite the fall…
+ Thou shalt not listen to clueless pundits.