“On 2/6, I wrote an article touting Apple’s (AAPL) upside potential. Over a month later, and after some share price volatility, we are back right where we were (after adjusting for dividends). Although not much has happened in the intervening time, journalists and bloggers can’t help but put out sensational headlines and traders can’t help but trade up and down the stock,” Baolan Guo writes for Seeking Alpha. “For us long-term shareholders, all this spectacle is very entertaining – but only if you can rise above it.”
“A friend of mine who only a month ago purchased shares of Apple at ~$450/share asked me a few days ago if he should sell everything at $435/share. Apparently, the volatility has gotten to him. ‘Don’t play Wall Street’s game!’ I told him,” Guo writes. “Wall Street is designed to move money around – the more money that moves around, the more they make. Sell side analysts change their “target price” every month or so, as if their models can accurately digest all new “information” and spit out a precise intrinsic value. My best advice on dealing with sell side research is to look at their data, but ignore their conclusions.”
Guo writes, “Don’t play Wall Street’s game, guys. Unless you are one of them, you can only lose.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Arline M.” for the heads up.]