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View Full Version : Steep drops in AAPL. WHY?


Daveway
Dec 20, 2004, 03:27 PM
Why has Apple stock been falling so much lately? If it goes to $60 i'm out.

zelmo
Dec 20, 2004, 03:34 PM
Why has Apple stock been falling so much lately? If it goes to $60 i'm out.

My guess is that the rapid rise in stock price got a lot of people overly excited, and it is settling back in at a new range for now, somewhere around $58-$59 is my guess. Once new products are introduced at MWSF, the price will pop up again, then remain static until the next quarterly earnings report. If Apple brings out some cool new products and hits the 4 million mark on iPods shipped in this quarter, expect another ride up the elevator. If Apple fails to do something expected, or starts having more troubles shipping product, people will panic and it'll drop again.

jxyama
Dec 20, 2004, 03:53 PM
nasdaq as a whole slid a bit, so it seems that the entire tech industry is pulling back, taking apple along for the ride.

Sun Baked
Dec 20, 2004, 03:56 PM
Year end profit/loss taking to balance out the profits and losses for the year.

There is almost always a big sell off toward the end of the year to balance the portfolios in preparation for tax season.

jeremy.king
Dec 20, 2004, 04:12 PM
Simple market correction and profit taking. Take the drop as an opportunity to buy more at a "discount" :)

I doubt you will see it jump for any amount of time during new product launches as usually the steady increases have come with quarterly financial announcements/updates.

jimjiminyjim
Dec 20, 2004, 05:15 PM
My guess is... a new range for now, somewhere around $58-$59....

Are you just playing with daveway00's mind? He says he's out at 60, and you say it'll stop moving at 59? Funny.

topicolo
Dec 20, 2004, 06:10 PM
It's a little known fact that limit orders and stop-loss orders should be done at weird numbers because everybody sets their price targets at nice, comfortable factors of 5.

BTW, apple is totally overvalued right now. Anybody who expects to make money speculating with aapl should also expect to lose money speculating with aapl

Hoef
Dec 20, 2004, 06:11 PM
little profit taking at the end of Santa's rally (Sun baked is right).... I am waiting until the annual numbers come in before selling.

strider42
Dec 20, 2004, 06:14 PM
Why has Apple stock been falling so much lately? If it goes to $60 i'm out.

I thought it was overvalued anyway. At its high a couple years ago, right before it went bust overnight, it was at 70 bucks. The stock then split to 35 bucks roughly. Taking this into account, 60 bucks a share now is the equivelent of 120 bucks a share then. I just don't see what apple has done in the past couple of years to justify the price going up so much over what was at the time considered overvalued, especially since computer sales have been stsatic since then. Its all based on the iPod. Base a stock price on a single product, and its going to be volatile. But that's just my opinion.

~Shard~
Dec 20, 2004, 06:44 PM
Let's see, the stock is overvalued, there are a number of profit takers, the Nasdaq is setting itself up for a significant downturn in 2005, AAPL's RSI currently indicates an overbought level, the stock hit an engulfing line on the bearish side a couple days ago, its MACD reversed direction recently and the slow stochastics don't look favorable right now. Need any further elaboration? :cool:

snkTab
Dec 21, 2004, 01:05 AM
a lot of people tried to buy right before and after the after-thanksgiving weekend which made the price go up more than it should be (IMO). i put in a market order to sell on that friday believing that at opening on monday it would spike. it sold at $69.

a lot of retail stock has this effect, low on friday, rise on monday.

i think that aapl is going to decline below $60 after christmas. in the days leading up to it you might see an increase. a good piece of advice is: if you are planning on leaving soon do it either the last chance you get before christmas or put in an order during the break and hope it jumps when the markets reopen.

next year however, i have no idea what aapls performance will be. too risky for my money. but you might want to stick around if you think it'll continue to rise.

iJon
Dec 21, 2004, 02:09 AM
It's a little known fact that limit orders and stop-loss orders should be done at weird numbers because everybody sets their price targets at nice, comfortable factors of 5.

BTW, apple is totally overvalued right now. Anybody who expects to make money speculating with aapl should also expect to lose money speculating with aapl
Agreed. People every year say after MacWorld it will pop up again. It never pops up at MacWorld and I doubt this year will be an exception.

jon

~Shard~
Dec 21, 2004, 06:19 AM
It's a little known fact that limit orders and stop-loss orders should be done at weird numbers because everybody sets their price targets at nice, comfortable factors of 5.l

True to an extent, but not really. It's not really "a little known fact", and it's not exactly "weird numbers" - at least not to those who are in touch with the market - I suppose to an outsider perhaps they would look weird. But when you take into account previous day highs/lows, levels of support and resistance, price points of classic patterns such as double tops/bottoms, gaps up/down, and to a lesser extent bid-ask spreads, the numbers aren't that "weird" and do in fact make sense to a degree. I know what you're saying though and on a high level you're correct. :cool:

IJ Reilly
Dec 21, 2004, 04:41 PM
Unless you're a very, very serious stock market junkie and have the time to follow every move and development like a hawk, the best selling strategy is to simply pick a number and enter it as a stop order (I use a closing price at the end of the week, minus a percentage). If it sells, it sells. No regrets, even if it goes up the next day. In fact that very thing happened to me today. AAPL hit my magic number this morning and I automatically sold some of my holdings. Then it ended up nearly a dollar. Oh well -- I made plenty. Greed kills. ;)

jxyama
Dec 21, 2004, 04:49 PM
Unless you're a very, very serious stock market junkie and have the time to follow every move and development like a hawk, the best selling strategy is to simply pick a number and enter it as a stop order (I use a closing price at the end of the week, minus a percentage).

the best strategy is to not invest in an ind. stock to begin with...

anyone serious about investing should not invest in apple (or any stock, for that matter) as a "fan." not a wise thing to do, unless it's your "play" money you can afford to take a hit.

IJ Reilly
Dec 21, 2004, 07:41 PM
the best strategy is to not invest in an ind. stock to begin with...

anyone serious about investing should not invest in apple (or any stock, for that matter) as a "fan." not a wise thing to do, unless it's your "play" money you can afford to take a hit.

Not necessarily. "Buy what you know" is one of the oldest pieces of advice in investing. My investment in Apple has returned over 500%, so I think individuals can use their own knowledge to make money in the stock market.

Hoef
Dec 21, 2004, 08:07 PM
anyone serious about investing should not invest in apple (or any stock, for that matter) as a "fan." not a wise thing to do, unless it's your "play" money you can afford to take a hit.

Err .... Can you share with us your advise in what to invest in for 2005. If you don't recommend stocks what else is out there. Please no rich dad poor dad real estate advise please :rolleyes: A prof of mine is touting commodity investments...

jxyama
Dec 21, 2004, 08:55 PM
Err .... Can you share with us your advise in what to invest in for 2005. If you don't recommend stocks what else is out there. Please no rich dad poor dad real estate advise please :rolleyes: A prof of mine is touting commodity investments...

um, have you ever heard of diversified stock holdings? like an index fund?

it's also important to have as long of horizon as possible... investing "for" 2005 is probably not a good idea unless you are a professional who do this for a living.

jxyama
Dec 21, 2004, 09:00 PM
Not necessarily. "Buy what you know" is one of the oldest pieces of advice in investing. My investment in Apple has returned over 500%, so I think individuals can use their own knowledge to make money in the stock market.

i never said investing in a single stock wouldn't yield any return. obviously, not everyone can get a 500% return. and "using their own knowledge" is very overrated, imo. for every amateur investor who thinks he/she's the hot one "in the know," there are 10 ivy league PhD grads at goldman sachs spending every ounce of their energy trying to beat everyone else.

Phobophobia
Dec 21, 2004, 09:20 PM
i never said investing in a single stock wouldn't yield any return. obviously, not everyone can get a 500% return. and "using their own knowledge" is very overrated, imo. for every amateur investor who thinks he/she's the hot one "in the know," there are 10 ivy league PhD grads at goldman sachs spending every ounce of their energy trying to beat everyone else.

So, what was it that destroyed your dreams, exactly? :)

jxyama
Dec 21, 2004, 09:45 PM
So, what was it that destroyed your dreams, exactly? :)

ha ha. :D i'm just a scientist, but have some interest in finance. all i know is that it's darn competitive world out there in the stock market... ;)

~Shard~
Dec 21, 2004, 10:40 PM
Err .... Can you share with us your advise in what to invest in for 2005. If you don't recommend stocks what else is out there. Please no rich dad poor dad real estate advise please :rolleyes: A prof of mine is touting commodity investments...

Plenty to invest in apart from simple stocks - income trusts, limited partnerships, convertible debentures, commodities, ETFs, index funds, SPDRs, iShares, etc. etc... Personally I dislike mutual funds... Or if you want to play stocks a different way, try the options game... plenty of investment choices to make out there... :cool:

Hoef
Dec 22, 2004, 07:15 AM
um, have you ever heard of diversified stock holdings? like an index fund?

it's also important to have as long of horizon as possible... investing "for" 2005 is probably not a good idea unless you are a professional who do this for a living.

Mmm.... I am a firm believer of investing with goals. What use is a long term horizon if you don't have an objective? Furthermore, you can build your diversified stock holdings by investing in individual stocks (yes, single stocks). Easyway out are indexes of course but that is less fun. But if you are going to try, ETFs that indexes Brazil or Indonesia (my last free tip for 2004 :) ). BTW... most of my ivy league class mates at finance institutions try to make over 50% return a year. I am happy with 20% portfolio performance.

~Shard~
Dec 22, 2004, 07:25 AM
Mmm.... I am a firm believer of investing with goals. What use is a long term horizon if you don't have an objective? Furthermore, you can build your diversified stock holdings by investing in individual stocks (yes, single stocks). Easyway out are indexes of course but that is less fun. But if you are going to try, ETFs that indexes Brazil or Indonesia (my last free tip for 2004 :) ). BTW... most of my ivy league class mates at finance institutions try to make over 50% return a year. I am happy with 20% portfolio performance.

I completely agree, that's the way I invest as well. Some of my holdings are very long term (7+ years), some are long term (2-3 years) and some are short term <1 year). In fact, you could say I have my investing portfolio and investing strategy, and then my trading portfolio and trading strategy. I do day trading a lot, and just pop in/pop out of stocks. That way I can bring in a few hundred $$$ a month, sometimes more sometimes less, but I always have my longer term holdings as well. Diversity and balance is the key. And greed will get you nothing but trouble. :cool:

wrldwzrd89
Dec 22, 2004, 07:27 AM
My guess is that the rapid rise in stock price got a lot of people overly excited, and it is settling back in at a new range for now, somewhere around $58-$59 is my guess. Once new products are introduced at MWSF, the price will pop up again, then remain static until the next quarterly earnings report. If Apple brings out some cool new products and hits the 4 million mark on iPods shipped in this quarter, expect another ride up the elevator. If Apple fails to do something expected, or starts having more troubles shipping product, people will panic and it'll drop again.
This is the reason I don't plan on buying AAPL shares anytime soon - they just don't seem like a good buy right now. Actually, I don't own any stock or other investments right now - I'm preparing to invest in the future, though.

~Shard~
Dec 22, 2004, 08:51 AM
I held AAPL stock when it was at $21 and sold at $40 back in October - a nice profit, although hindsight is always 20/20. ;) I then shorted it at the end of November at $67, got a little nervous when it climbed above $68, but then took my profits yet again at $64 early this month - a nice profit for such a short term trade. For now though, I see AAPL going lower if anything, but I am not sure on the timing yet on when to short again. 2005 is going to be an interesting year for the markets, and I plan on capitalizing on it just like I did in 2000... :cool:

Dave00
Dec 22, 2004, 08:57 AM
(1) AAPL is definitely overvalued. The current stock price anticipates tremendous growth over the next few years - which may or may not happen.

(2) December/early January is the worst time to sell, and the best time to buy. Mainly because you'd be doing the same thing as everybody else. Lots of people sell in December in order to write off losses, and tend to buy back the same stocks in January. So if you sell now, you miss the big jump that always happens in January.

(3) Allowing your natural gut urges to take over will get you killed in investing. Everyone knows you should buy low and sell high. But what this reallly means is that you should buy when it's going down, and sell when it's going up, which is the complete opposite of what your gut tells you. Your gut tells you when it's going down, get out before it goes too low. Your gut tells you when it's going up, get in and get on the gravy train. The best time to buy is when there's nothing but bad news, and vice versa for selling. Right now, the news is almost overwhelmingly positive for AAPL - iPods selling like hotcakes, etc. Which means it's a good time overall to sell - but I'd never sell this time of year. The good buys in the stock market are where there's been lots of bad news. For instance, Merck is at its lowest price in something like 9 years, but everyone's afraid of buying because of the anticipation of lawsuits re: Vioxx. Mark my words, over the next 10 years it'll have a huge return.

(4) Stock picking is fun, but on average a losing proposition. 70% of mutual funds - which are run by people who do nothing but study stocks - do worse than the indices. For important money, pick an index fund and forget about it.

Dave

rdowns
Dec 22, 2004, 08:01 PM
I completely agree, that's the way I invest as well. Some of my holdings are very long term (7+ years), some are long term (2-3 years) and some are short term <1 year). In fact, you could say I have my investing portfolio and investing strategy, and then my trading portfolio and trading strategy. I do day trading a lot, and just pop in/pop out of stocks. That way I can bring in a few hundred $$$ a month, sometimes more sometimes less, but I always have my longer term holdings as well. Diversity and balance is the key. And greed will get you nothing but trouble. :cool:

My long term money is with my financial advisor's company and I speak with him frequently. We did 14% growth in 2003 and just under 19% this year.

I have a play account that I grew from $7,500 to just over $18,000 this past year. Apple funded a good part of that. I do a little day trading (look for good buying opportunities like Pfizer late last week, early this week) but I have always done well by investing in what I know and researching and reading like crazy. I also avoid bandwagon jumping, that will kill you. Buying stocks may be a gamble but no reason to just roll the dice.

~Shard~
Dec 22, 2004, 09:16 PM
My long term money is with my financial advisor's company and I speak with him frequently. We did 14% growth in 2003 and just under 19% this year.

I have a play account that I grew from $7,500 to just over $18,000 this past year. Apple funded a good part of that. I do a little day trading (look for good buying opportunities like Pfizer late last week, early this week) but I have always done well by investing in what I know and researching and reading like crazy. I also avoid bandwagon jumping, that will kill you. Buying stocks may be a gamble but no reason to just roll the dice.

I have a similar style and view of things - sounds like we're both doing some of the right things, at least, judging from your previous success and mine.... :cool:

Hoef
Dec 22, 2004, 09:53 PM
Hail to ~Shard~ and rdowns, good to see more like minded fundamental technical day short long term traders investors ;) !!

IJ Reilly
Dec 23, 2004, 12:06 AM
i never said investing in a single stock wouldn't yield any return. obviously, not everyone can get a 500% return. and "using their own knowledge" is very overrated, imo. for every amateur investor who thinks he/she's the hot one "in the know," there are 10 ivy league PhD grads at goldman sachs spending every ounce of their energy trying to beat everyone else.

And I never said everyone could make a 500% return, let alone all the time, but by the same token, my choice of sinking a substantial amount of money into Apple wasn't a random act, especially when it was selling for only a couple dollars above liquid assets (and way below book value). For a long while, the markets were treating Apple like a company that was ready to file for bankruptcy, even though they were reporting profits. It didn't take a whole lot of vision or knowledge to see a money making opportunity there. I don't give a hoot if 100 ivy-league PhDs are trying to beat me. I just want to make some money. Just because they also do doesn't mean I can't.

IJ Reilly
Dec 23, 2004, 12:23 AM
(1) AAPL is definitely overvalued. The current stock price anticipates tremendous growth over the next few years - which may or may not happen.

(2) December/early January is the worst time to sell, and the best time to buy. Mainly because you'd be doing the same thing as everybody else. Lots of people sell in December in order to write off losses, and tend to buy back the same stocks in January. So if you sell now, you miss the big jump that always happens in January.

(3) Allowing your natural gut urges to take over will get you killed in investing. Everyone knows you should buy low and sell high. But what this reallly means is that you should buy when it's going down, and sell when it's going up, which is the complete opposite of what your gut tells you. Your gut tells you when it's going down, get out before it goes too low. Your gut tells you when it's going up, get in and get on the gravy train. The best time to buy is when there's nothing but bad news, and vice versa for selling. Right now, the news is almost overwhelmingly positive for AAPL - iPods selling like hotcakes, etc. Which means it's a good time overall to sell - but I'd never sell this time of year. The good buys in the stock market are where there's been lots of bad news. For instance, Merck is at its lowest price in something like 9 years, but everyone's afraid of buying because of the anticipation of lawsuits re: Vioxx. Mark my words, over the next 10 years it'll have a huge return.

(4) Stock picking is fun, but on average a losing proposition. 70% of mutual funds - which are run by people who do nothing but study stocks - do worse than the indices. For important money, pick an index fund and forget about it.

Dave

(1) Actually, Apple's current price reflects roughly 35 times forward earnings (last I checked), which is just about where it's been selling for some years now. The stock's price fairly accurately reflects earnings growth projections -- which of course means they actually need to meet these forecasts, but we're looking at some predictions of exceeding them now, so the current market valuation isn't nearly as precarious as some are saying.

(2) If you've made money on a stock, this might be an excellent time to sell, especially if you've got some offsetting losses to report. We're actually enjoying the traditional "Santa Claus rally" at the moment. Tax selling will probably hold off until next week. Also, nothing always happens in the market. Believing it does is a great way to get burned.

(3) I own some Merck, unfortunately, which I bought long, long before the Vioxx thing. It's been going down pretty steadily for years now. I'll only mark your words about the guaranteed profits from investing in this company if you'll promise to make up the difference if it continues to go down.

(4) That's good advice, IMO.