AAPL Share Price! WTF?

Posted:
in Future Apple Hardware edited January 2014
Does anyone regularly keep up the the price of AAPL? It has fallen a ton in the past week. I've been assuming its a result of people who made some quick $$ in anticipation of iPhone and new iMac releases and their subsequent selling off of the stock. But this is looking pretty lousy!!! As i write this, its lingering around $113, down from $135 a week ago.



I have always thought the main rationale for the secrecy is to foster large jumps in share price. Stockholders generally love volatility, and AAPL is showing a ton of volatility now. I think Steve likes it, but right now he's losing money, and so are all his long-term investors. I REALLY want Steve to set up his next conference so the hype can start up again and prices will get back on the rise.



I've been holding an extra bit in my portfolio waiting for the new iPods, which i expect will drive at least a 20% increase. What are people's thoughts on Job's intentions re: the new iPod? When will he announce his next press conference? What will be the impact of the iphone on the share price? Will iPhone sales figures be higher or lower than what the analysts say?



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Comments

  • Reply 1 of 26
    are you serious?



    if you actually had a 'portfolio', you would know there is a little more going on in the markets right now to make AAPL show "volatility" ( which stockholders hate, while brokers may 'generally love'...)



    I think the Next iPods will come out for Christmas buying season, after the back 2 school promos are done. Analysts say many things about iPhone. I would go with Apple's numbers on this one, or just over (they tend to be conservative).
  • Reply 2 of 26
    IMHO (and I'm not a big investor), they are just getting dragged down with the rest of the market due to the panic around the housing/credit markets. Perhaps investors are worried that consumer spending will suffer (no money left over for luxury items like iPhones and iPods, etc.).
  • Reply 3 of 26
    eroseros Posts: 23member
    No idea about apple specifically, but the worldwide markets are going through a major correction. In Aus today alone, the market got thrashed by people triggering margin calls (very smart, very evil). I lost alot over the past couple of weeks. Nothing to stress about though.



    I would however like to know how you derive your 20% increase in share price with the intro of new ipods, pretty ignorant assumption in current market climate!!
  • Reply 4 of 26
    MarvinMarvin Posts: 14,213moderator
  • Reply 5 of 26
    bg_nycbg_nyc Posts: 189member
    Quote:
    Originally Posted by waytogobuddy View Post


    are you serious?



    if you actually had a 'portfolio', you would know there is a little more going on in the markets right now to make AAPL show "volatility" ( which stockholders hate, while brokers may 'generally love'...).



    Whats with the hostility?! Yes, there's alot going on with the market now, but there has been upturns and downturns all year. And in spite of the S&P being less than flat in the past 6 months, AAPL has continued to rise. So its obvious that AAPL is not totally driven by what happens in the market. It has a very high 'alpha' that is driven by events like MWSF, WWDC, and other events where info is released. Apple has a very low Beta coefficient when announcements are near. I cruise this site b/c 1) I love Apple and 2) people here know what they are talking about when it comes to products and announcements.



    And to answer your question, yes I'm serious. And I hope you have 'portfolio' too at least in the form of a 401k so my taxes don't have to fund your hip replacement surgery down the line.
  • Reply 6 of 26
    bg_nycbg_nyc Posts: 189member
    Quote:
    Originally Posted by Eros View Post


    No idea about apple specifically, but the worldwide markets are going through a major correction.



    Think there's a major correction in the market? If so, I hope you're out buying right now. These things are usually not based on earnings and interest rates, more likely based on momentum and skittish investors. A real correction was Enron or Tyco who lied about earnings. The entire market is not being 'corrected' b/c that assumes prices are wrong. There is no right or wrong in the stock market!!!





    Quote:
    Originally Posted by Eros View Post


    I would however like to know how you derive your 20% increase in share price with the intro of new ipods, pretty ignorant assumption in current market climate!!



    Oh boy... I shouldn't have used numbers!!! This is what I get for trying to spark a new conversation...



    Anyway, I say at least 20% b/c I know people are sitting and waiting for the info, and as soon as it comes I can imagine every institutional investor and people like me jumping on it, especially after the current firesale. I'm no fundamental analyst, but I think iPods will be a major boost of more than 20%. Thats a movement of only 105 to 126. Is that ignorant or unreasonable? Absolutely not considering the movement over the past 3 years. I would say the assumption is LESS ignorant than the average Wall Street Analyst who predicted Leopard in June or has a 'strong buy' recommendation right now. Its all guesswork, and with risk comes reward.
  • Reply 7 of 26
    shanmugamshanmugam Posts: 1,200member
    Quote:
    Originally Posted by Marvin View Post








    this should be posted in Mac Pro mini tower thread
  • Reply 8 of 26
    bg_nycbg_nyc Posts: 189member
    Quote:
    Originally Posted by waytogobuddy View Post


    if you actually had a 'portfolio', you would know there is a little more going on in the markets right now to make AAPL show "volatility" ( which stockholders hate, while brokers may 'generally love'...)



    I just have to make one more point about this silly response to my question... both stockholders and investors love volatility. Just to keep this simple, we wont discuss option theory and the Black-Scholes model (which may hurt your head, but proves that volatility increases option value).



    Why do you buy stock? If you wanted zero volatility you would buy t-bills or a CD from your local bank. Depending on the sector, you like volatility because 1) its usually driven by high trading activity, so your stock is very liquid, and 2) it allows you to capture short term trading gains with low transactional costs. If you are a buy and hold investor, volatility is irrelevant to you because a strong company share price will continue to increase over the years regardless.



    But this conversation is oversimlified. We also need to consider the source of the volatility. If is driven by volatility in earnings, thats a different story. But AAPL volatility is driven by intangible things that we cant put a finger on. So since we know Apple is a strong company, we should welcome volatility in share price.



    So please explain to me why you think I, as an investor in AAPL, would hate volatility? \
  • Reply 9 of 26
    onlookeronlooker Posts: 5,252member
    wallstreet is down. Not just apple.



    Also, try posting in the correct forum from now on.
  • Reply 10 of 26
    Quote:
    Originally Posted by bg_nyc View Post


    Whats with the hostility?! Yes, there's alot going on with the market now, but there has been upturns and downturns all year. And in spite of the S&P being less than flat in the past 6 months, AAPL has continued to rise. So its obvious that AAPL is not totally driven by what happens in the market. It has a very high 'alpha' that is driven by events like MWSF, WWDC, and other events where info is released. Apple has a very low Beta coefficient when announcements are near. I cruise this site b/c 1) I love Apple and 2) people here know what they are talking about when it comes to products and announcements.



    And to answer your question, yes I'm serious. And I hope you have 'portfolio' too at least in the form of a 401k so my taxes don't have to fund your hip replacement surgery down the line.



    My Apologies: wrong side of bed this morning.



    Thank you for wishing me a long (if slightly hobbled) life, and no, your taxes won't have to fund my hip.

    Sorry you became so riled as to show off your knowledge of the minutiae of the market.



    Quote:

    But AAPL volatility is driven by intangible things that we cant put a finger on



    I think this is part of what makes apple 'different'. Most of the time I actually believe Jobs when he says he wants to make the best computers possible, the whole think different, change the world, let people create, mentality. This has 'not much' to do with earnings, market share etc. And maybe investors are skittish as to what this means in the long term. That and the whole cult of Mac - which is evidenced by the replies you got to your first query - including mine!



    Although I can't resist:

    Quote:

    A real correction was Enron or Tyco who lied about earnings. The entire market is not being 'corrected' b/c that assumes prices are wrong. There is no right or wrong in the stock market!!!



    You're aware of supply and demand right? (I think they are explained a few pages before alpha and beta coefficients)?



    If you cross reference your knowledge of supply and demand, with the observable credit crunch that seems to be affecting world markets in a myriad of ways (is a market correction?) you might come to a interesting conclusions on previous higher prices being 'wrong' for the current market.
  • Reply 11 of 26
    onlookeronlooker Posts: 5,252member
    Quote:
    Originally Posted by shanmugam View Post


    this should be posted in Mac Pro mini tower thread



    I hear that!



    BTW, the market is starting to rebound.
  • Reply 12 of 26
    bg_nycbg_nyc Posts: 189member
    Quote:
    Originally Posted by waytogobuddy View Post


    Although I can't resist:



    You're aware of supply and demand right? (I think they are explained a few pages before alpha and beta coefficients)?



    If you cross reference your knowledge of supply and demand, with the observable credit crunch that seems to be affecting world markets in a myriad of ways (is a market correction?) you might come to a interesting conclusions on previous higher prices being 'wrong' for the current market.



    Glad you couldn't resist, b/c you are wrong yet again. Supply and demand does indeed affect the market in various ways. But for the law of demand to hold, we must first assume that markets are rational, meaning that if the price goes up, people will buy less, and the inverse. this doesn't work in the stock market. Its not rational, and people dont just stop buying when the price of apple goes up. They stop, wait, buy more, short sell, buy call and put options, etc. Other things like diminishing utility that derive from the law of demand dont hold either. And theres transaction costs and the fact that people are both buyers and sellers at once that make the model inapplicable.



    One thing that does hold is the idea that prices will move toward an equilibrium point due to the forces of buyers and sellers. This is why prices are always 'correct' at any given point. So you kind of contradict yourself, because a believer in Supply and Demand will know that in a 'market' there is no wrong price. If there was, nothing would ever be bought or sold. Imagine the government mandating that grapes would sell for $100/ounce. Nobody would buy! Imagine then a mandate for grapes at $0.01 per ounce. Then, nobody would sell! If a market exists, then the price is correct. q.e.d.



    Apologies for these long posts, and further apologies for placing this in the wrong forum. I'm new to AI and eager to share my thoughts and learn about Apple from the experts.
  • Reply 13 of 26
    Apple's volatility is due to analysts, who make outlandish predictions. These predictions bump the stock price when they're made, and hurt the stock price when they don't come true. Analysts also put extremely negative spins on neutral or positive Apple events.



    As a company, Apple is consistently strong. The iPod market is maturing slightly, and they won't ever have 50% sales growth year-over-year again, but as a company, Apple has strong sales rates, and has great prospects in the phone and computer segments, with somewhat lackluster CE inroads (excluding the iPod)
  • Reply 14 of 26
    bg_nycbg_nyc Posts: 189member
    Quote:
    Originally Posted by ZachPruckowski View Post


    Apple's volatility is due to analysts, who make outlandish predictions. These predictions bump the stock price when they're made, and hurt the stock price when they don't come true. Analysts also put extremely negative spins on neutral or positive Apple events.



    As a company, Apple is consistently strong. The iPod market is maturing slightly, and they won't ever have 50% sales growth year-over-year again, but as a company, Apple has strong sales rates, and has great prospects in the phone and computer segments, with somewhat lackluster CE inroads (excluding the iPod)



    Agreed! I've noted this in a previous post. Analysts are the source of all my mac-related headaches. But our insatiable search for Mac info drives them to this behavior. I'm a culprit. I lurk on this site and MacRumors and ThinkSecret lusting over a kernel of Mac news... and when it comes, you bet i'll be on Ameritrade the very next second, along with a couple million others!!!
  • Reply 15 of 26
    Quote:
    Originally Posted by bg_nyc View Post




    ...meaning that if the price goes up, people will buy less, and the inverse. this doesn't work in the stock market. Its not rational, ...






    interesting logic. So the new equilibrium (the correct price) is different form the old equilibrium (the correct price) because of factors without rationality. Something that may fall in this category of factors is the massive worldwide sell-off that has happened in the last few weeks. This can be interpreted as heard mentality, or people becoming more risk adverse as the larger economic trouble looms, etc. As I have said previously, looking at the evidnce of stocks across the board in multiple markets, I would say this is at least partly responsible for the volatility and downward trend of AAPL.



    Quote:
    Originally Posted by bg_nyc View Post




    One thing that does hold is the idea that prices will move toward an equilibrium point due to the forces of buyers and sellers. This is why prices are always 'correct' at any given point.




    If we could lump these buyers together, in an abstract group for the sake of a model, we'll call it an economic model per say, we might be able to label the "forces" of the "buyers" as, well say: demand. If by chance we were to proceed with a similar thought experiment for those people in the market known to be sellers, modelling the "forces...of sellers" as a general metric of how much I don't know... supply there was at certain point, we would be on the road towards a pretty justified model of modern economics. Albeit one that makes (incorrect) assumptions, is oversimplified, does not describe the nuances of human thought and yet, explains a lot.



    If we take our abstract explanation of economics, and then influence it by the accounting for the gross credit fears that are rebounding around world markets: stirring up hesitation (deemed rational or not) of being in stock, we might see downward trending of even promising companies, probably with much volatility - as fears of general downawrd economic trends buffet against Apple Inc. outlook.



    (wait for it)



    In this market, the volatility of AAPL leads to increased risk of loss, which (apparently) a majority of investors in the market (and not on the forums) do not want. For evidence see AAPL - I think you quoted the drop from 135 to 115?



    Now this isn't rational or clever if we're jsut looking at AAPL, which seems to have good things coming (new ipods, iPhone growth, 2nd halo effect), but taking into account the above, we might conclude that there is a,

    Quote:

    little more going on in the markets right now to make AAPL show "volatility"



    But let us both be done with that.





    As for what will happen: AAPL has long gotten away with low balling estimates, then selling akajillion iPods, laptops etc, and the corporate investors come running (I remember when AAPL was ~$30.) I don't think Apple can manage this anymore, no matter what RDF Steve puts on for the next announcement; people are right in saying that analysts over-hype the next big thing from apple (eg. 750 000 iPhones in 15 hours! OMGBBQ!1!).



    So even if Apple beats their own estimates, analysts might be disappointed.



    Second, iPod growth will have to slowdown at somepoint as the market saturates. There will still be growth, but it won't be exponential for ever.....



    Third, the way that Apple has decided to interpret the revunue from iPhone (subscription based) doesnt' give (IMHO) any immediate numbers for investors to immediately glow over. BUildup to the Jesusphone was intense, and I would say was reflected in share price. Now that the honeymoon is over (OMG RIM still exists!!!?) people will be a little more circumspect of AAPL purchases.



    Hope you at least find the bottom half (half) interesting,
  • Reply 16 of 26
    chris vchris v Posts: 460member
    The financial markets are in a full-grown meltdown right now. There have been so many foreclosures in the housing market that banks that make loans are running out of money. Investment firms that own shares in the lending institutions are getting hammered. If you own Apple, sit tight. If you don't, hold on while this sorts itself out-- which won't be any time real soon -- (read up on the S&L crisis of the Reagan years for an idea of the size of what's happening) and when the "correction" rights itself, buy AAPL immediately. It'll go back up. Apple is a very healthy company, with lots of growth potential.
  • Reply 17 of 26
    onlookeronlooker Posts: 5,252member
    Quote:
    Originally Posted by chris v View Post


    (read up on the S&L crisis of the Reagan years



    Which was actually fallout from the Carter years.
  • Reply 18 of 26
    Quote:
    Originally Posted by onlooker View Post


    Which was actually fallout from the Carter years.



    Ouch



    It wasn't all Laffer's special little curve?
  • Reply 19 of 26
    chris vchris v Posts: 460member
    Quote:
    Originally Posted by onlooker View Post


    Which was actually fallout from the Carter years.



    Which were fallout from the Nixon years,



    Which resulted from the Johnson administration's misguided policies,



    which inherited Kennedy's mistakes,



    which were...







    I don't know who deregulated the savings and loan industry, or exactly when, but the outcome was a $150 BILLION taxpayer (read -- you and me) bailout of an industry that was plagued with bad loans to cronies, who walked with most of it. Why more people aren't still in prison over all that escapes me. Anyway, it looks like it's all happening again, except with this so-called sub-prime market, and adjustable-rate mortgages. (Has anyone in the history of adjustable-rate home loans ever had theirs adjusted DOWN? )



    If the fed jumps in with too large of a cash infusion, it'll lead to inflation, so they've got to walk a fine line. It'll be interesting to watch all this play out. It's not going to be all over with next week, though.
  • Reply 20 of 26
    chris vchris v Posts: 460member
    Quote:
    Originally Posted by onlooker View Post


    Which was actually fallout from the Carter years.



    Wikipedia article. The deregulation started under Reagan. Whether he personally was to blame,I have no real idea. Presidents don't usually mess with the Fed too much right after taking office, and I'm certainly no historian, but I fail to see how Carter caused this, unless you're saying it was a repercussion of the govt's attempts to rein in inflation, which the Carter administration was notorious for.
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