Analysts Share in Blame for Apple's Stock Drop, Says Fortune

shotts56 · Jan 25, 2013

sza said:
Analysts are not stupid, the listeners are.

Correct. Analysts don't move share prices, people who buy & sell shares do.

But when it goes wrong for you, culture these days is to find someone to blame. "Boo hoo, it was all those nasty analysts fault". The same as six years ago when you could no longer afford the mortgage that you committed to, "Boo hoo, it was all those nasty bankers fault".

There's always someone else to blame.

Ryth · Jan 25, 2013

Greg. said:
I really don't get it. It's like me taking one of the companies I hold stock in right now, loading up excel and creating a forecast without any corporate access. For any other company there's no way I could get this published and counted as part of Wall Street's consensus, but for AAPL this seems to be the case! They should stick to something like Estimize.

I'm not saying analysts are saints, but including all these amateur analysts really distorts the picture in articles like this. The major bank I used to work for who were below consensus and whose numbers got beat with this earnings announcements aren't even on the full chart that Fortune has on it's site - which helps give the impression that every analyst is super bullish and it's a crooked industry.

Right...but you can get it published if you write your own blog and then other blogs that are more popular start taking your blog and using it as opinion or factual information.

That's the real issue is that the big sites are starting to take information from everywhere and not researching or validating it.

Another issue is Apple's poor guidance. They continued to blow past estimates and then finally the analysts were like..screw it..we'll adjust upwards..the issue is they now go too far up just like they underestimated before.

robanga · Jan 25, 2013

Ryth said:
Right...but you can get it published if you write your own blog and then other blogs that are more popular start taking your blog and using it as opinion or factual information.

That's the real issue is that the big sites are starting to take information from everywhere and not researching or validating it.

Another issue is Apple's poor guidance. They continued to blow past estimates and then finally the analysts were like..screw it..we'll adjust upwards..the issue is they now go too far up just like they underestimated before.

Continual sandbagging in almost any business always finds a way to bit you. Still i wonder how hard it would be of a trail to follow from some negative analysts or news leaks to someone making money on shorting stock? (although certain the reverse could be true too)

Would be interesting investigative journalism.

My1stMacWasLisa · Jan 25, 2013

It's bewildering. Tim and his team work hard to (1) run the company so well and (2) give accurate sensible forcast figures, Apple announce results that pretty much exactly meet Tim's forecasts and what happens?

A bunch of analysts, rhymes with fantasists, make crap up and when the crap doesn't come true 'the market' responds to the crap and claim Apple is going down the pan.

It's the blind leading the blind out there in financial land. One clueless clown following the 'advice' of another.

You know what they say about careers. Those who can, do. Those who can't, teach and those who can do ferck all become anal-ists.

----------

sza said:
Analysts are not stupid, the listeners are.

Based on the nonsensical made up 'projected' figures most of these anl-ists were touting it's pretty clear they are stupid, or up to something.

They're proabably all out there now, buying at 445, laughing.

Ryth · Jan 25, 2013

My1stMacWasLisa said:
It's bewildering. Tim and his team work hard to (1) run the company so well and (2) give accurate sensible forcast figures, Apple announce results that pretty much exactly meet Tim's forecasts and what happens?

A bunch of analysts, rhymes with fantasists, make crap up and when the crap doesn't come true 'the market' responds to the crap and claim Apple is going down the pan.

It's the blind leading the blind out there in financial land. One clueless clown following the 'advice' of another.

You know what they say about careers. Those who can, do. Those who can't, teach and those who can do ferck all become anal-ists.

That's my one issue with Tim right now. Steve responded to BS if it threatened the company and came out like a lion.

Tim needs to come out and do more about superfluous rumors and BS that these hedge fund guys are trying to use to tank the stock. What he also needs to do is throw Wall Street a bone now and then.

When Tim said the other day to the affect of "Apple cares about making the best product, not revenues"...that sent a shudder through me and I'm sure other investors/shareholders/Wall Street.

The correct response should have been something to the tune of "Apple cares about making the best possible product. And we all know that if you make the best possible product, then the best possible revenues will obviously follow."

jon3543 · Jan 25, 2013

Ryth said:
That's my one issue with Tim right now. Steve responded to BS if it threatened the company and came out like a lion.

Tim needs to come out and do more about superfluous rumors and BS that these hedge fund guys are trying to use to tank the stock. What he also needs to do is throw Wall Street a bone now and then.

I think I understand why he doesn't. If he did, he'd be responding to rumors every day, and if he missed a day, or is perceived as too vague, he'd fuel even more rumors. Best just to ignore the noise and focus on making products, releasing pieces of good news when they're truly notable between the usual events.

When Tim said the other day to the affect of "Apple cares about making the best product, not revenues"...that sent a shudder through me and I'm sure other investors/shareholders/Wall Street.

The correct response should have been something to the tune of "Apple cares about making the best possible product. And we all know that if you make the best possible product, then the best possible revenues will obviously follow."

I get your objection, but the latter of course is what he meant.

mrsir2009 · Jan 25, 2013

Of course they are -_-

SeattleMoose · Jan 25, 2013

Proving once again that stock value is more closely tied to hot air than actual performance.

Porco · Jan 25, 2013

http://www.etymonline.com said:
analysis (n.)
1580s, "resolution of anything complex into simple elements" (opposite of synthesis), from Medieval Latin analysis (15c.), from Greek analysis "a breaking up, a loosening, releasing," noun of action from analyein "unloose, release, set free; to loose a ship from its moorings," in Aristotle, "to analyze," from ana "up, throughout" (see ana-) + lysis "a loosening," from lyein "to unfasten" (see lose). Psychological sense is from 1890. Phrase in the final (or last) analysis (1844), translates French en dernière analyse.

That's the thing - sometimes in resolving something complex into simple elements you miss the entire point by focusing only on the details and not the bigger picture. Which is not to say there isn't some value in focusing on details, it just shouldn't be the be-all and end-all of relevant data, and it seems like the stock markets give far too much weight to what analysts say.

In a way though, it's similar to how many computer users view Apple versus generic PCs - focusing on an arbitrary set of specs and power between macs and PCs as if they are the only things that matter, ignoring other factors which demonstrably affect people's purchasing decisions such as aethetics, design, the 'total experience' over the tiny details. Again, in their place there is nothing wrong with a list of specs being part of a rounded decision-making process, but relying too heavily on specs can get you a computer that crushes all others on the specs but which you hate to use and is ultimately a bad choice for you.

kas23 · Jan 25, 2013

sseaton1971 said:
Isn't it more about revenue/profit than marketshare? I don't know how the two compare when it comes to actual dollars, but I think that would be a better way to compare the two companies.

One would think, but that's not how the stock market functions. You have emotional beings selling to emotional beings. You would also think that people don't get scared and sell stock when it bottoms out or buy Apple stock when it skyrockets to $700.

sseaton1971 · Jan 25, 2013

kas23 said:
One would think, but that's not how the stock market functions. You have emotional beings selling to emotional beings. You would also think that people don't get scared and sell stock when it bottoms out or buy Apple stock when it skyrockets to $700.

Good point about the "emotional beings" factor!

szw-mapple fan · Jan 25, 2013

JGRE said:
Analysts think they have to comment any company even if they they don't understand squad about the strategy and performance of the company. They only want to bring sensational stories which make them look good. It is all about sensation and greet.

greet? you meant greed right?

macs4nw · Jan 26, 2013

notjustjay said:
This shouldn't surprise anybody. We go through this right here on these forums with every Apple product launch.

It's always the same. In the weeks before the product launch, the rumors start flying. The new product will have a brand new design! It'll be thinner! Lighter! With twice the power! And there will be a price drop! And a spec bump across the line! The whole line-up will be updated! No, replaced! No, this is going to be the start of a brand new product category! Here are some product mockups. Here's what these could look like!

Then the discussion starts flying. "Here's what I'd like to see!" People start predicting entire product lines, including estimated pricing, and start drooling about how awesome it's all going to be.

Then the product announcement happens. It's a new version number with a reasonable spec bump. The form factor is the same as last year's model but the price drops slightly. It's a competitive upgrade, but nothing revolutionary.

And then the complaining starts... What happened to the revolutionary new design? What happened to the brand new product line? We're so disappointed!

Nothing "happened to it". You guys made it all up in the first place. There's no way those expectations could ever have been met.

Every. Single. Time.

Gotta hand it to you, that's a pretty accurate analysis! And these rumors seem to go on for months, rather than weeks, after which come the parts leaks that only seem to create more confusion and stoke even more speculation. As much as I hate to admit it, being here, we're all part of it.

JGRE · Jan 26, 2013

szw-mapple fan said:
greet? you meant greed right?

Yes, sorry for the typo.

JGRE · Jan 26, 2013

notjustjay said:
This shouldn't surprise anybody. We go through this right here on these forums with every Apple product launch.

It's always the same. In the weeks before the product launch, the rumors start flying. The new product will have a brand new design! It'll be thinner! Lighter! With twice the power! And there will be a price drop! And a spec bump across the line! The whole line-up will be updated! No, replaced! No, this is going to be the start of a brand new product category! Here are some product mockups. Here's what these could look like!

Then the discussion starts flying. "Here's what I'd like to see!" People start predicting entire product lines, including estimated pricing, and start drooling about how awesome it's all going to be.

Then the product announcement happens. It's a new version number with a reasonable spec bump. The form factor is the same as last year's model but the price drops slightly. It's a competitive upgrade, but nothing revolutionary.

And then the complaining starts... What happened to the revolutionary new design? What happened to the brand new product line? We're so disappointed!

Nothing "happened to it". You guys made it all up in the first place. There's no way those expectations could ever have been met.

Every. Single. Time.

Right, there were even "smart people" complaining where the holographic keyboard went (http://obamapacman.com/2011/08/iphone-5-virtual-keyboard-holographic-projector-concept-video/).

Get real!

Greg. · Jan 26, 2013

Ryth said:
Right...but you can get it published if you write your own blog and then other blogs that are more popular start taking your blog and using it as opinion or factual information.

That's the real issue is that the big sites are starting to take information from everywhere and not researching or validating it.

Another issue is Apple's poor guidance. They continued to blow past estimates and then finally the analysts were like..screw it..we'll adjust upwards..the issue is they now go too far up just like they underestimated before.

My1stMacWasLisa said:
It's bewildering. Tim and his team work hard to (1) run the company so well and (2) give accurate sensible forcast figures, Apple announce results that pretty much exactly meet Tim's forecasts and what happens?

A bunch of analysts, rhymes with fantasists, make crap up and when the crap doesn't come true 'the market' responds to the crap and claim Apple is going down the pan.

It's the blind leading the blind out there in financial land. One clueless clown following the 'advice' of another.

You know what they say about careers. Those who can, do. Those who can't, teach and those who can do ferck all become anal-ists.

----------

Based on the nonsensical made up 'projected' figures most of these anl-ists were touting it's pretty clear they are stupid, or up to something.

They're proabably all out there now, buying at 445, laughing.

Yeah this is the chart I was looking for. How can analysts get it right when Apple never used to give correct guidance? They then try and factor this into their models and Apple suddenly decides it's going to now give accurate guidance for once.

And @My1stMacWasLisa, 'anal-ists'? - how creative of you. Good job.

turtle777 · Jan 26, 2013

My1stMacWasLisa said:
They're proabably all out there now, buying at 445, laughing.

So why aren't you doing the same ?

-t

kas23 · Jan 26, 2013

Here, maybe you guys can understand this (also nowhere to be found on MRs):

http://www.businessinsider.com/annotaded-charts-why-apples-world-record-breaking-business-doesnt-impress-investors-2013-1?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+typepad%2Falleyinsider%2Fsilicon_alley_insider+%28Silicon+Alley+Insider%29&utm_content=Google+Reader

chagla · Jan 26, 2013

Killa Aaron said:
Stupid analyst, one of the reasons why the economy is so messed up, listening to these dummies.

short term memory eh? it was in fact some analyst just a few days ago when apple share was declining and right after his comments, share went up instantly. it hasn't been that long. google it.

it is OK for analysts to always say positive about apple, never negative.

charlituna · Jan 27, 2013

AppleAlfred said:
The analysts don't "cause" the stock to plummet, it's all the stupid traders selling the stock because it doesn't meet expectations.

Yes and no. The traders listen to the analysts and many of them are making wild guesses at what they think Apple will perform based on zero do knowledge about upcoming products, production line issues and so on.

Apple knows these things and based their numbers in that knowledge. So what the analysts really should be doing is asking if Apple can make their own estimate based on what is going on like product launches, new services etc.

But they just make up numbers that aren't likely to be met and the traders trust them and follow their 'didn't met expections' doom and gloom

----------

Ryth said:
That's my one issue with Tim right now. Steve responded to BS if it threatened the company and came out like a lion.

Tim Cook is not Steve Jobs, he is not going to act like he is etc. mainly because folks would see right though it and see that 'he's just fronting like he's Steve,major lame'

And Tim did call out the analyst BS in the earnings call. It was brought up by several sites. He didn't cuss at them and tell them to **** or call out names but he did point it out in his own quieter style.

palmharbor · Jan 27, 2013

stock market

The stock market buyers and seller act on rumor...hyped opinions by big firms who have already sold short...its the home of "panic". At one time they loved MicroSoft and though Apple was just a computer used in schools and Ad agencies and there was no future for the firm. They also thought at one time
Sony was a great buy and would always do great things and the price of Sony was way pumped up. If you watched Cramer the Stock Guru on CNBC and bought on his tips you would have lost money each time. I did.
Larry Kudlow on CNBC who predicted the market was going to tank in December then in January and he of course was wrong both times.

Analysts Share in Blame for Apple's Stock Drop, Says Fortune

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