“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.]
+1
If you don’t want to “play the game” then you shouldn’t be in the stock market. It’s not the 1920’s anymore. The stock market is a game. The sooner you realize that and become “unemotionally attached” to the companies you invest (gamble) on, the more money you will make. It is a game.
If we could only get tax policy aligned with that fact. It’s a tax on gambling winnings (sin tax) not investment (sensible use of money). Flat 40% on trades held less than a year seems reasonable to me. No offsetting gains with losses, gains are taxed, losses are money down the drain. Wall Street would straighten up pretty quickly, IMHO.
Agreed 100%.
It is a game, and not one that aligns well with Apple.
Apple should get the hell out.
You completely missed the point – don’t play the game as narrated by the sell side analysts. Review available data and draw your own conclusions. Do not let yourself be distracted by Wall Street stock churn.
Apple should go private. They don’t need the selfish, misguided greed mongers telling Apple how to run their business. It is like the PC world telling you to use Windows on Dells.
(shudders)
Tough to “rise above it” when apple is getting bashed by the media 24/7. Easier said than done especially for the average investor. Right now, AAPL is really only for the truly patient investor who can either ignore or stomach the volatility.
The guy writes for Seeking Alpha. Hit whore amateur. Anyone who invests in the stock market should understand that it is a risky investment medium. If you want safe, put your money in a passbook savings, savings bonds or government treasuries. If you want dividends, invest in utility stocks. The problem with many investors who invest in the stock market is they think they can invest and then go away and forget it. You can’t do that. When you make a sizable profit you’re supposed to take that profit. It’s pretty damn simple. You don’t invest for any other reason other than to make money. So when you make money, take it. You don’t have to be a daytrader or a market timer. You just have to be intelligent enough to know that you’re ahead and it’s time to take your profit off the table. And in most cases all your money off the table and wait for a little better reentry point. It’s just common sense. But so many people are afraid to do that so they argue that buy-and-hold forever makes sense. Well it doesn’t. So many people on this site are struggling to get back to anywhere near a break even point while others are hoping that they can recoup some of that huge profit that they had on paper last September. Investors who do their due diligence know when to take their profit. You just don’t invest and forget it. And complaining about the crooked stock market is no excuse. It’s that deer in the headlights thing that so many investors get when they invest. They freeze when they’re way ahead and the next thing they know they’re freezing like a deer in the headlights as they’re way underwater. And Apple isn’t special. It’s just another company that has issued shares of stock. So it doesn’t deserve special treatment nor does it shareholders. It’s funny how there was no complaining last summer when Apple shot straight up. I’m in this morning and doing quite well thank you. Just a little taste but it feels good. I have my stops put in so I don’t lose my ass. But things are looking good right now it’s up $7.75. But trust me, especially in this volatile time with AAPL, I will be especially diligent. Please, don’t buy it and forget it. Manage it. It’s your money. Don’t be afraid to invest and don’t be afraid to take your profit when it’s appropriate. That’s simply rule number one of investing. If you don’t want to manage your money or take your profit when you make it, buy savings bonds.
I liked your comment so much that I copied it into an email.
I heard a fascinating commentator on the radio this morning. He pointed out that 10 years ago, most of the money made by stock traders was based upon the success of the company causing share prices to rise. That is no longer true. Most of the money made by big traders is a result of hedging, successful betting that the stock will go up or down. We have this system becaue the big investment banks want it and they “own” the rule makers.
A voice of reason. Too bad so many people will not take it to heart.
THANK YOU BAOLAN GUO! It is so good to hear some sanity. 😀