Cramer: Apple has cursed the market

“When investors buy a stock, they expect that company to post great revenue and great earnings every quarter. That, in turn, will fuel the analysts to raise estimates and shares will head higher,” Scott Rutt reports for TheStreet. “The company can then further reward shareholders with big dividends and stock buybacks.”

“At least, that’s the way its supposed to work. But in the case of Apple, the company did all of those things and shares have fallen in a straight line ever since,” Rutt reports. “Cramer told viewers that perhaps tomorrow will be the day that Apple can once again be bought based on its stellar, long-term story.”

Read more in the full article here.

“Investors buy stocks because they want the companies to fare well in earnings. When the numbers are better than analyst expectations, they raise the estimates. On top of that, if you get a dividend boost and a juicy buy-back, there’s nothing like it,” Mohit Manghnani reports for Seeking Alpha. “If the stock is at a discount relative to the average stock in the S&P500, it’s like icing on the cake.”

“Apple had all of these things and it still went down by approximately 4%. If a stock like Apple cannot go higher, then the entire rationale of buying stocks flips on its head,” Manghnani reports. “‘Ever since we swallowed the Apple, the whole race of stocks seems cursed,’ said Cramer. He added that if the market does not care for the fundamentals of the biggest company, then it is bad news.”

“If Apple’s positive earnings can be skewed as negative news, then what can propel stocks?” Manghnani reports. “According to Cramer, once oil stops going up, and there is seller fatigue, along with a new winner like a bank or REIT, then the market can bounce back. Or, if Apple can rise from the ground, that will be positive for the entire market. ‘Oddly enough, though, I think that’s the most likely scenario. I think Apple should be bought here,’ said Cramer. He added that it is always a good time to buy a high-quality stock with strong fundamentals like Apple.”

Read more in the full article here.

MacDailyNews Take: Plus, the company provides strong guidance. Go figure. The market does its own thing. Rationality has little or nothing to do with much of anything.

28 Comments

    1. Exactly!

      Plus, the majority of trades are now based on some computer algorithm(s) designed to pump money out of the system in the short term (down to microseconds) not “invest” in any true sense of the word. That huge part of “Wall Street” provides no socioeconomic benefit, thus has no legitimate reason to exist. What it is doing is contributing to the systematic and methodical transfer of wealth from the middle class to a very few mega wealthy individuals/organizations. That is doing actual, real damage to the long term health and stability of our economic system. So, why is it legal?

      It should be clear that if any company has the metrics of Apple, as pointed out in the article, and still goes down, then there is evidence that something in the investment system is broken and is not operating as intended for either investors or the associated corporation.

      1. “So, why is it legal?”

        Get the SEC in a room with a spotlight on them and a live broadcast to the USA and you still would not get any answers.
        I believe the SEC is bought and paid such high numbers that nothing will ever be done.

  1. There were a lot of options that required AAPL to go down this week. So it did. What keeps surprising me is how easy it is to do this. The market says that the watch will have NO material effect on earnings, yet a glitch [now corrected] in a part is a reason for AAPL to drop? Right. Apple has 200B overseas that can’t be repatriated to the US, yet when the EU [once again] makes noises that Apple needs to pay taxes of about 10B [EU ‘payola’], Apple is again doomed. We all know that the market is rigged and that the traders and fund managers that manipulate AAPL over and over need to go to prison in striped pajamas – but it is still the only game in town for any kind of return. The only strategy that can work, is buy and hold. Trading AAPL will burn you.

  2. Hedge Funds have sewn negative news on Apple inc. over the last week to try and force the stock price down, which has worked; they will now make money on the Dividend re-investment bounce. Nothing new here, except the SEC seem to turn a blind eye!!

    1. You mean you can’t sell a stock you don’t own? You can’t buy a stock you don’t intend to pay for? How will the market ever function?

      A lot of practices are in place from the days when the market functioned by the activities of a bunch of guys wearing smocks running around on the trading floor. The process has changed, but the practices remain in place, but are now just abuses. Time for a modern stock market that doesn’t penalize investors for the gain of traders. Investors should be the object of the stock market. Traders should go to a casino.

  3. So Cramer and the rest why are you not buying Apple? Apple does everything right, you put Apple on the New York Stock exchange and you still treat it like crap for no reason except in your stupid fantasies of “something might go bad” B.S! Lets get Apple over $200 a share where it belongs for doing everything right.

  4. When the market allows money to be made on stocks losing value then it is open to manipulation. Shorting provides that option and large amounts of money can be made to move the stock to max pain as we are seeing this week. The stock market is based on greed and providing vehicles such as shorts can take that greed to a new level.
    Shorting was supposed to provide liquidity in the market. But it is clear that it has just become a vehicle for some to make easy money because they know exactly where the stock needs to be. The risk is low if you have the means to move the stock. Shorting should be stopped because it has failed in its goal. I doubt that will happen because too many in the business will have a lot to lose.
    For the average person who is investing using 401K then the long term approach is the only way to make gains. There is still a lot of risk. For example if iPhone sales start to dip you can be damn sure AAPL will take a massive drop in value.
    You can buy and sell stock but you also need to have a fair idea of when shorts are going to be a factor in the stock price.

  5. Market has really no interest in how a company is doing. Market only cares which way a stock price is moving. I this day of the internet the game is immediate profits like a casino. If it can be manipulated with false articles and hypothesis its off to the races. I like apple because I like their products. I hate owning apple stock. But I do.

  6. This has been going on for at least a decade or more. I’ve made money betting on the post-report drop. This was one of the few years I didn’t sell the day before reporting and buy back after the drop. I thought the news would be too good for the stock to drop. I thought Wall Street might have finally figured out that the regular ‘rules’ don’t govern a company the size of and the culture at AAPL. Silly me. I gave Wall Street credit for common sense.

  7. The economy is in the toilet. If this administration weren’t giving near-zero interest rates to banks and printing and spending money at obscene rates, the market would be much, much lower. Apple has been one bright exception to the overall condition.
    The forecast is gloomy. Even after the economy starts to pick up, we will be saddled with the massive debt that Obama and company have given us. We are screwed. Thanks Obama!

    1. “yeah, it was all Obama, it was none of his predecessor’s actions, the whole crash was all Obama, oh, wait, he was elected in the middle of the crash? never mind, lets talk about the weather”

      Quote: George and a bunch of other ignorant idiots when confronted with the truth by someone with facts and common sense. They all go on to ignore those facts and find some other idiot to “convince” of the evil Obama.

  8. Wall Street has their heads up their asses when it comes to Apple. They don’t get it, they never will, because SJ covertly disrupted their world and they haven’t even noticed yet.

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