Apple: Breaking the law of large numbers and getting away with it

“Apple investors have been enjoying outsized market returns for several years now, despite it being an extremely large, well-followed company,” Gregg Rosenberg writes for Seeking Alpha.

“The returns on Apple’s stock imply a degree of mispricing which should not be possible for such a well-followed company,” Rosenberg writes. “The explanation for the mispricing is partly a pervasive but fallacious market belief in a ‘law’ of large numbers.”

Rosenberg writes, “Apple keeps breaking the law of large numbers, and there is a clear path for it to continue breaking it at least for the next ten years.”

Much more in the full article – recommended – here.

[Thanks to MacDailyNews Reader “Martin B.” for the heads up.]


  1. I love how this article ticks off reasons for Apple defying the law of large numbers, and just as I try go to page two it tells me I must download the Seeking Alpha App to read the entire article. Yes Lord Cook. Installing the app now.

    1. With 14 required page clicks and the need to log in with Google+, i stopped at page 1.

      But it seemed to me the article was heading down the path “Apple does very well by actually doing all those things they talk about in B-school, not just mouthing the words.” Honesty and integrity go a long way toward ensuring success. Apple investors are winning by being investors, not players in the Casino of Wall Street.

    1. I’m pretty certain that’s what’s got Wall Street stumped. Oh, well, they say ignorance is bliss, but I think a lot of ignorant analysts’ clients are being led down the wrong path and maybe they’ll realize it in the future.

      1. The law of large numbers is nothing more than an invented confluence of past events coagulated into a label that Wall Street wheeler-dealers can point to in order to say something can’t be done. It’s only a “law” because no one had ever seen anything otherwise.

        Just remember, whenever someone claims something can’t be done or a record can’t be broken, that’s your clue to go all in on it being done or broken.

    1. Actually this guy is very smart and puts out a very through article and reasons for investing in Apple even starting now.
      You could get between 4 and 40 times your investment.
      Just saying.

  2. Apple has been doing this for years now but the market still doesn’t realize it.
    Apple achieves this through focus on making the best products it can. Quality is the winner formula.

    1. Market for longest time was focused on Mr. Softy and then came let’s focus on Google and Amazon …..

      As Apple continues to amass a pile of cash, slowly the Street is taking notice!

      1. But the anti-Apple factions pull this theory out to use on Apple quite often whether it applies or not. They’ll have some new theory about how “Apple is getting too big not to fail” or something similar. You know they’re hedging it when they say things like “Apple will find it increasingly harder to move the needle every quarter.” I’m fairly sure that applies to almost any company except maybe a start-up. It’s fairly pathetic why they’re constantly saying such obvious things about only Apple.

  3. After the 7-for-1 stock split, the share price is no longer a (very) large number. This makes the stock much more accessible as people are more willing to part with a few hundred dollars for a few shares vs. five hundred dollars for just one.

        1. I’m not sure how to check pre split institutional percentage, that’d be the way to tell if your assertion was true. If the same % was institutional pre and post split then there’s no way to make an argument that more individual investors are buying in.

  4. Too big to grow ????
    If Apple has 10% of the computer market (not shure if it’s even that much), then what would happen if it had 20%, or 30%, or 40%, or HOW ABOUT 50 % !!!
    Too big to grow REALLY ? Now if they would just come out with a DOUBLE SCREEN Mac…

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