Apple's Stock Has Already Bounced Back After Earnings Results Slightly Missed Expectations

[IJ Reilly]

Hmm, that doesn't seem like a good plan. You basically end up pricing in a 1% loss when you are ready to sell, right? You only sell after the 1% drop, so you only sell on the dip. Shouldn't you set a "sell order" at 1% above the current price and capture the fluctuation up?

Granted this is a bit of a game, but I try not to sell at times when the stock has poor momentum and I would probably be better off with a market order. I've been able to notch my stop loss price up a couple of times, to above the market price on the first day, before it sells. This technique actually has a name, it's called a trailing stop loss. You can set them to readjust automatically, but I do it manually in the evening when the markets are closed.

 

[BenTrovato]

I think the 5 years after Cook replaced Jobs was a great time to own Apple stock. In general when a board puppet CEO takes over from huge momentum, investors are happily served. I honestly don't know where Apple goes from here though, so on that basis, I'm out.

 

[TallManNY]

Granted this is a bit of a game, but I try not to sell at times when the stock has poor momentum and I would probably be better off with a market order. I've been able to notch my stop loss price up a couple of times, to above the market price on the first day, before it sells. This technique actually has a name, it's called a trailing stop loss. You can set them to readjust automatically, but I do it manually in the evening when the markets are closed.

Interesting. It makes sense. But also doing the exact opposite makes sense. You set sell order at 1% above current price and if some fluctuation brings you above the trigger point, you sell and capture the little bump. But I guess that is an example of why trading is hard, two opposite strategies both make sense.

But as you say, a bit of game. Timing market is hard (maybe impossible) and every exit in an investment has some aspect of attempting to time the market. So we rationalize it.

Off topic, but interesting blog post by John Gruber on Daring Fireball about WeChat. Hypothehis is that WeChat App is so important it trumps the value difference of iOS over Android, so China users aren't as loyal to iPhone as users in pretty much any other country. Gave me are a rare "uh oh" feeling on iOS and iPhone.

 

[IJ Reilly]

Interesting. It makes sense. But also doing the exact opposite makes sense. You set sell order at 1% above current price and if some fluctuation brings you above the trigger point, you sell and capture the little bump. But I guess that is an example of why trading is hard, two opposite strategies both make sense.

But as you say, a bit of game. Timing market is hard (maybe impossible) and every exit in an investment has some aspect of attempting to time the market. So we rationalize it.

Off topic, but interesting blog post by John Gruber on Daring Fireball about WeChat. Hypothehis is that WeChat App is so important it trumps the value difference of iOS over Android, so China users aren't as loyal to iPhone as users in pretty much any other country. Gave me are a rare "uh oh" feeling on iOS and iPhone.

I'd go with impossible until further notice. If you come up with an infallible system, you'll let me know, right?

FWIW, my decisions to sell are based almost entirely on my personal needs and plans and very little on the markets (though as I say, try not to sell into weak markets). Playing with the sell orders a little is pretty much the only market entertainment value I allow myself, since I swore off playing the trading game a long time ago. Suppose it helps that I don't care a whole lot how it works out.

Not a huge fan of Gruber, but he might be onto something there.

 

[Art Mark]

The focus on Apple's short-term stock price fluctuations is meaningless. Steve Jobs didn't care about future share price, he cared about future products. Make great products and the profit will follow was his philosophy.

Tim Cook seems to be the polar opposite. Keep trumping statistics about how well Apple has performed in the past to prop up the share price. Come up with excuses why iPhone sales dropped this quarter. Steve wouldn't have cared about the drop other than to see if there was a product issue that needed to be improved.

Seth Godin says "Profit is often a measure of short-term imbalances or pricing power, not value." That is very true, particularly in a potentially commoditized market like technology. Steve Jobs was always one step ahead of the competition. He kept the short-term imbalances tipped in favor of Apple by constant innovation and improvement. He focused on anticipating what product the customer would want to buy a year or more in the future. He instinctively knew when technology would mature into a product ready for consumer use. Apple always had something new and exciting; Steve Jobs' "One More Thing" moment at the end of a keynote.

The old product-focused Apple died with Steve Jobs. Tim Cook is more akin to Microsoft's Steve Balmer. Without some new product category innovation in the near future I suspect Apple's long-term stock chart will look significantly flatter in ten years than it has over the past ten.

I'm not sure I believe all your analysis. But you speak the truth in that Tim Cook is not Steve Jobs. Even though I very much miss Steve's POV on technology and his obvious impact on products, it's not bad to have a new head of the company who is his own person and worked for a long time under Steve. The disaster would have been someone TRYING to be Steve Jobs (Scott Forstall?). I have followed Apple for my entire adult life. Worked for them once years ago. I don't think they have taken a 'dive' or that Tim Cook is some how sabotaging the company. He will lead it differently. But so far I haven't seen ANY of the issues that effected Steve Ballmer's run at Microsoft. Tim wasn't a sales guy he came from supply and sourcing ETC. Apple is not the Apple it used to be, but that's OK. Nothing stays the same. The issue is do you wisely change with the times or fight to stay in some imaginary past. Steve never looked back. Remember when he came back head them remove the Apple 'museum' at the headquarters. Apple will be successful if they keep looking forward. And they do have to pay some attention to stock, unfortunately. But I think the company has benefited from having a person who KNOWS he is not Steve Jobs as it's leader. An imitator would have been distasterous.

 

[DotCom2]

I'm curious on how much higher it'll go. We're still pretty far away from the iPhone 8 event, but I'm hesitant to increase my position when the stock is at an all time high.

Wait for a good dip.

 

[Fthree]

If you have money spare and can live frugally then you should always be investing in 'something/anything'. The most important thing is that you invest in something you truly believe in, the ones who are shaping the future in a positive progressive long term way, and not just a greedy temporary cash cow.

love this thought process. Interested in hearing your thoughts on the likes of amazon and google

 

[Kabeyun]

Silly. A better wish is to have bought some when it was under $3 (adjusted), and held on.

The farther back you go, the sillier that sounds, what with needing to have been either extraordinarily lucky or a time traveler from the future.

 

[T'hain Esh Kelch]

Wish I bought more when it was $90.

Wish I bought more when it was $30.

 

[BuddyTronic]

Here again, financial news is not being reported accurately. The current one-year target consensus for AAPL is $151.44. This is less than 2% higher than its current price. So no, this is not a "bullish" case, but in fact only a very modestly positive one for the stock.

"consensus" based on which analysts?

Is taking a consensus of all analysts worthwhile even?


Don't forget:

Prediction is hard - especially about the future.

 

[SoyCapitanSoyCapitan]

love this thought process. Interested in hearing your thoughts on the likes of amazon and google

As long as politicians don't cause global chaos all the big tech firms are worth investing in. Our biggest problem today is the quality of people involved in politics and funding politics has never been worse. Dark money and 'alternative facts' are killing trust and it leads to economic volatility, which only helps the richest banks and hedge funds.

When we can implement complete transparency of all political communications and funding then we will have the stability and accountability we deserve as taxpayers. We should be protesting for this to be a global standard. We need Big Brother's technology to be used against itself.

 

[IJ Reilly]

"consensus" based on which analysts?

Is taking a consensus of all analysts worthwhile even?


Don't forget:

Prediction is hard - especially about the future.

Consensus, by definition, is the average of all analysts who cover a stock. If it makes you feel better use the median. That will discount the outliers, both high and low. The result will probably be very close to the mean.

My point here is that MR likes to cherry-pick the analysts. They aren't making a case for the track records of some being more deserving of following than others, they are just citing a handful of them because they are more bullish. That proves exactly nothing.

 

[jordii]

It seems like it's always that it misses "expectations" (what outsiders are guessing) rather than missing "guidance" (what Apple predicts). Wall Street is weird.

It's because the price is always about expectations: opinion rather than fact. Expectations, untethered from reality, are what caused it to shoot up. Failure to meet those expectations are what caused it to dip down. Etc etc.

 

[teoreticar]

I think the 5 years after Cook replaced Jobs was a great time to own Apple stock. In general when a board puppet CEO takes over from huge momentum, investors are happily served. I honestly don't know where Apple goes from here though, so on that basis, I'm out.

hahha lets quote this post when AAPL worth over $1000 bucks
What a mistake that would be

 

[IJ Reilly]

It's because the price is always about expectations: opinion rather than fact. Expectations, untethered from reality, are what caused it to shoot up. Failure to meet those expectations are what caused it to dip down. Etc etc.

Sort of. The current market price of any stock is always about trying to predict the future, but "expectations" in this case has a specific definition. It is the average of the earnings, revenues, and sales, as predicted by the analysts who cover a stock. They are hardly untethered from reality. In fact many of them get these numbers within single digit percentages from what the company actually reports.