As investors appeared to shrug off tensions between the United States and Iran, Apple shares rebounded in pre-market and regular session trading on Wednesday.
Daniel Eran Dilger, AppleInsider:
On Tuesday, Apple stock fell from a new high near $300 on concerns that a protracted war might erupt. In after-hours trading, Apple fell even further, down to $292, on news of a retaliatory missile strike by Iran. That wild but temporary drop in after-hours trading represents the increased volatility—and often irrationality—in the low volume trading that occurs outside of the market’s ordinary trading session.
But the resilience of Apple shares — even in response to serious threats to the health of the global economy — demonstrates one of the benefits the company has realized from its massive share buyback program that has taken place across the last decade.
In using its cash to buy back its shares and retire them, Apple has concentrated the value of its remaining shares for its investors. The buyback program has also had the effect of taking shares away from traders willing to sell on negative news. That appears to have significantly eliminated the weak hands remaining among the company’s investors, resulting in less irrational fluctuations.
Analysts who formerly appeared capable of knocking billions of dollars off of Apple’s valuation by simply issuing a fearsome report speculating about competitive pressures are now seeing a very limited response to their warnings. In part, that may likely be due to their widespread failures to predict or interpret the direction of the market.
MacDailyNews Take: As we wrote back in January 2018:
The following qualifications are required in order to be a financial analyst:
• Zip;
• Zero;
• Zilch; and
• Nada
So, why do brokerage firms employ analysts? Because brokerage firms make their money on commissions and fees. In other words, the act of charging investors to buy/sell securities. Analysts recommend buying or selling based on scant evidence, misreading evidence, wild guesses, and/or coin flips. Some even – GASP! – lie.
The few good analysts actually listen, realize they never have all of the information, and actually use some math to try to make accurate calls based on the paltry information they do have at their disposal. Most analysts exist to create churn – buying and selling – in order to generate commissions and fees for the brokerage houses that employ them. The “business news” outlets treat their pronouncements and “concerns” with much seriousness and deep consideration, as required by every decent charade that involves a monetary exchange.
Most of the “Apple analysts” in the world couldn’t analyze their way out of a wet paper bag.
[Thanks to MacDailyNews Reader “TomL” for the heads up.]
DED and PED are the only ones who get it.
Gee, thanks. 😉
Oops. Forgot about you guys. Lol
CNBC tweaked Toni Sacconaghi today for finally raising his AAPL target to $300 from $250 prodding him to admit he may have backed himself into a corner with his lukewarm assessment of the stock. Shortly thereafter the panel all admitted (as Cramer always proclaims) that it’s just silly to try to play the stock, you just own it. But these folks are typically wish-washy themselves and were pattting themselves on the back for buyin AAPL this weekend.
Several brokerage firms have recently moved to offering free trades. So in theory analysts that try and create churn-buying/selling won’t result in more commissions/fees. It probably does result in articles that generate eyeballs and ad revenue however.
White House Atlas shrugged and so does the rest of the world.
WooHoo! What a record run, Apple and may it continue… 🍎🇺🇸🍎🇺🇸🍎