Doubting Apple tops long list of bad market calls in 2014

“The big money doubted Apple Inc. this year. Oops,” Lu Wang and Oliver Renick report for Bloomberg News.

“Aversion to the iPhone maker is turning out to be one of the worst blunders in 2014 for money managers, who are trailing benchmark indexes by the most in almost a decade,” Wang and Renick report. “Shares of the world’s largest company rose four times more than the Standard & Poor’s 500 Index as Chief Executive Officer Tim Cook’s product plans eased concern over the company’s future growth.”

“Among some 278 funds that are benchmarked to the S&P 500 and have at least $500 million in assets, only a fifth hold Apple shares more than their representation in the index, according to latest regulatory filings compiled by Bloomberg,” Wang and Renick report. “These funds have returned an average 8 percent this year, compared with 6.1 percent from those that have no stake.”

Read more in the full article here.


  1. “Big Money” didn’t see thefinancial derivatives and meltdown coming either… Big idiots.

    While “The other big money was made and will continue to be made for a long time, by Apple longs.

  2. How can these fund managers be that stupid? What is fundamentally wrong about Apple that they don’t like? Not enough growth potential? I can understand analysts making bad calls because maybe they’re paid to give out bad advice to increase volatility but these fund managers are supposed to be extremely smart. They love to talk about how Apple is designed to fail due to low market share. Do they use some sort of boiler plate definition of what makes a company successful? It seems to me those fund managers like to play companies that barely make any profit but have some potential long-range growth that will pay off in the long run.

    I just don’t get it. Apple’s institutional ownership is certainly low compared to other top tech companies. Google has 83% institutional ownership. C’mon… 83%?!! Project Loon is not going to give big returns. If Apple gives a thumbs down to Google as the default search engine, do they think that’s going to boost Google’s revenues? Jeez. I swear these funds own Apple just to use as a bank for their gambling investments.

    Do those fund managers really believe Apple is sitting way up there just by luck? They prefer to own H-P because it’s not named after a fruit or the CEO isn’t gay? It can’t be because H-P has greater growth potential. Heck, Apple even offers a higher dividend.

  3. I started dabbling with aapl from 2002 onwards and finally bought all in in 2007. Suffered many ups and downs (anyone remember the rise to 200 only to sink down to ~90) but overall the stock is up 980%. That is an average of 100% per year at least.
    All of the negative comments about Apple are largely irrational and generally occur through attempts to move the stock for ulterior motives.
    My 401K funds average at 10-15% increase per year. The biggest growth appears to be resulting from dividends rather than the price itself. I have little expectations that these funds will ever achieve the growth that aapl have and are likely to suffer a setback come the next decline.
    I often feel that the average person’s 401K contributions are toys for those that wheel and deal in the market. There are so many devices now for the market to screw with your money that it seems criminal to let is continue.
    I’m lucky that I bought aapl when I did and have held it through the ups and downs. I know that it could go down heavily in the future but I feel better making that choice myself than the limited options I have in my 401K.

    1. if you have averaged 10-15% annual returns in your 401K, you have been doing exceptionally well. Historically, the S&P 500 has averaged approximately 11.5% returns, and very few mutual funds have managed to beat the index over time. Add to that the annual fees charged by actively managed mutual funds – often 1, 2, 3% or more, and these eat into the profits from mutual funds tremendously. These seemingly innocuous fees can reduce your returns by many thousands of dollars over time.

      I’m a big fan of the 401K and similar programs for the self-employed. The problem, and it’s a huge one, is that almost every employer only offers actively managed mutual funds, and not index funds like the S&P 500 or low cost index exchange traded index funds (ETFs). This makes a ton of money for the big investment houses offering these actively managed mutual funds. But only offering these expensive, underperforming mutual funds has robbed US employees of billions of dollars of potential earnings. I am amazed that Congress has not addressed this, but then, when you consider the political clout of the big mutual funds, I’m sadly not surprised.

      Your point on reinvested dividends is an excellent one. I have found that even slow-growing investments like Pfizer or General Mills, both which pay a dividend above 3%, have doubled my returns over 10 years without my lifting a finger. It’s a good reason why the simple addition of a modest dividend by Apple, when reinvested and held for many years, can dramatically increase your returns on Apple stock when held for a number of years. That’s really important.

      Warren Buffett has said on many occasions that the best thing an investor can do is nothing. That is, the biggest enemy of most investors is impatience and trading too much. Over the life of almost any stock in which you invest, it’s likely that the stock will drop as much as 50%. Impatient and fearful investors sell out in panic. But successful investors like Buffett roll with the fickle nature of the stock market as long as the financial fundamentals and the direction of the company are often sound. A year ago, pundits were blasting Apple. But truth be told, the company’s fundamentals were sound, and Apple was generating a ton of cash. Its PE and PEG ratios indicated that the stock was underpriced. Fast forward a year and we have seen that Apple has generated much better returns than the market. That this was lost on mutual fund managers shows that the smart individual investor can generate better results than the big boys.

      It’s a smart idea to include some investment in a good S&P 500 index fund ETF in your portfolio. That way, you will at least do as well as the market. It won’t generate super sexy returns in the short run, but in the long run, your results will be much better than you can imagine. If a stock pays a dividend, be sure to reinvest it. If it’s a successful company like Apple, plan on holding the stock for decades. If you do, in 10, 20, 30 years or more, and you keep adding to your investment to, you will have a tremendous and prosperous future.

      Best of luck.

  4. These financial experts have an IT dweeb employed full-time to keep their PCs running, so they are shielded from having to deal with customer support. As for the rest of us, we choose Apple and we are not going to switch to some other gadget with crappy to no customer support – and this trend will increase away from DIY integration and beta software of Android towards the finished product model of Apple as the smartphone market matures. People are used to paying PC guys $200 to get their rig virus free and running – once they bite the apple they are not going back.

    The ANALysts could not be more wrong about Tesla for the same reason they think Apple might suddenly lose marketshare off a cliff every time a cheap phone comes out- Tesla’s customer care package and consumer satisfaction at 97 is off the charts.

  5. “What is fundamentally wrong with Apple” is that they do business the RIGHT way. They aren’t part of The Spirit Of The Age, which is ‘Screw Thy Customer’. Rather than contributing to ‘The Great Recession’, Apple THRIVED all the way through it.

    IOW: Apple breaks the status quo. Wallnut Street HATES that. Apple better play the came of corruption, stupidity and hatred or ELSE! … We can see the ‘or else’ inevitably visits itself up on the self-destructive in business. And they deserve it.

    More self-destruction on Wallnut Street is ahead: They BOUGHT themselves some deregulation of trading shite derivatives again. That’s not just a determination to screw the American tax payer. That’s a determination to screw themselves. I say Let Them Fail.

    1. I was going to post my idea then I saw your post and heck it’s Christmas so I thought I’d drop my post by you and wish you a Merry Christmas and compliment you on what was making my eyes roll.

      Good grief the articles today, are quite the demonstration of animosity and tension. A couple of secret war headlines and this article full of bile: Bad Market Calls, Ooops, confusing, unloved, unpopular, blunders, aversion, got burned and the totally amusing hiccup fears” in big bold letters. I can’t say for sure but it looks like the author is trying to mimic the recent report on CIA torture without the rectal hydration or water boarding kit.

      That brings me to back to Christmas. I figure the way some are dishing it they need some hope and guidance as to the values that are truly important:

      Peace on Earth
      Love for Life
      Respect for others, even those who trespass against us.

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