“Barclays has lost faith in Apple and thinks you should too,” Mark Rogowsky reports for Forbes. “It believes the time has come to dump the most valuable company because of some superficial similarities to Microsoft, which traded sideways through most of the current millennium.”
“While it’s certainly challenging to predict the future of Apple’s share price, it’s fairly easy to eviscerate the facile argument presented by Barclays in the Wall Street Journal (and elsewhere) concerning Apple,” Rogowsky reports. “In telling investors to “step aside,” analyst Ben Reitzes says the smartphone market is maturing, nothing in Apple’s product pipeline will make a big difference like iPad or iPhone did, and there’s a whole host of reasons to see Apple as following in the footsteps of Microsoft.”
“Most of the argument works like this: Barclays sees some kind of similarly between the two companies and then concludes that because of this similarity, history will repeat itself,” Rogowsky reports. “You and I might do the same kind of pattern matching that Barclays does with things we’ve seen before. We might, for example, get caught in a storm and arrive home soaking wet. But what we don’t do is run through a neighbor’s sprinkler on a different day and conclude that it just rained. The failure to spend even a moment comparing the fall in the price of Apple and Microsoft’s share prices is like not understanding the different reasons why the two sets of clothes are wet.”
Much more in the full article – highly recommended – here.
Barclays downgrades Apple stock rating – February 21, 2014