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Zach Bass (a.k.a Ernie Varitimos) is Chief Bloviator of Investor in the Wilderness. He has 30 years experience as a Tech Maven, Investor and Consultant. Zach has been using Macs since their introduction in 1984, and investing in the markets just as long. His mission is to help guide all level of investors through the Apple Ecosphere and make sense of the markets. Zach's take on Apple, the markets, and life pursuits, will keep your mind tuned.

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Apple Investors Is There a Bottom in Sight?

September 30th, 2008 • Related • Filed Under

Apple dropped 23 points today, nearly 18 percent, in what will go down as the single most horrific day in the stock market. At least until tomorrow that is, if investors get wind that the bailout plan is a no-go, then we’ll do it all over again!

Now, I’d like to apply some form of technical analysis here but it would be meaningless. When you get to a point where support and resistance levels, trend lines and indicators in all markets and all stocks are completely trumped by a news persons report, a fast flying rumor, or the expression of a senator’s face, then it’s time to put the TA aside and just observe.

AAPL took the big slide today with skids greased with a pair of downgrades from Morgan Stanley and RBC. Really good timing, don’t you think? Quite frankly I was wondering which analyst would be first to downgrade AAPL. How could anyone in their right mind think Apple had a chance at $200 a share in this economic climate? But why today?

What is really strange is that the ninja analysts from these firms acted as though they did violated some secret treaty, and short of recanting the downgrades, they professed how strong Apple was, and what tremendous products it recently produced, and what a wonderful outlook it has. 

So, how low can Apple go? You’ve gotta ask yourself when Apple reports earnings of a spectacular quarter, and then offers their stalwart conservative guidance, what will Apple’s stock price drop to; 90, 80, maybe even 70? Of course that’s a few weeks away, and perhaps Apple will primp up its price before summarily shedding the gains in a single after-hours session. Sounds like a never-ending story.

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More on this topic (What's this?)
7 Great Lessons to Learn From Apple in the Last Year (Stock Trading To Go, 9/29/08)
The End of Steve Jobs ™ (The Curious Investor, 12/18/08)
What’s going on at Apple? (Part I) (The Curious Investor, 12/17/08)
23 Votes Short? Time to Invest in the Almighty Apple (The Wikinvest Daily Angle, 9/29/08)
Read more on Apple at Wikinvest

Viewing 4 Comments

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    Zack, I gotta tip my hat to you for trying to bring rational thought to the asylum but lunatics are on the grass. We can bet on the movement of the rain drops but it's only fun with a Long Island Iced Tea in hand. For me, sit back, analyze the movements and look at the long term ramifications and the short term reactions but save your cash for booze.

    This was sent to me by my brother-in-law, a bond guy with JP Morgan:
    If you had purchased $1,000 of Delta Air Lines stock one year ago, you would have $49 left. With Fannie Mae, you would have
    $2.50 left of the original $1,000. With AIG, you would have less
    than $15 left. But, if you had purchased $1,000 worth of beer
    one year ago, drunk all of the beer, then turned in the cans for
    the aluminum recycling REFUND, you would have $214 cash. Based
    on the above, the best current investment advice is to drink
    heavily and recycle.

    Amen!
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    Well, I guess you're going to be blamed for pulling Apple's stock price down since you said it had a good chance of dropping. You'll have to bear a lot of responsibility for this one. Apparently a number of analysts are letting investors know that Apple investor's dreams of $200 by the end of the year have gone up in smoke. Huberty giving a target price of $115 and Citi giving a target price of $170 down from $287. Apple zealots really believed Apple was going to $250 or so and were claiming it was undervalued at that price. Wow! Anyone that tried to tell them the stock was going down was considered an Apple hater. We all have opinions and it doesn't mean we hate something just because our opinions are somewhat negative or pessimistic. I bought most of my 1000 shares of Apple before the split, so I'm not going anywhere and I'll just weather this downtrend for six months or so (I hope it's only that long).

    Anyway you turned out to be correct as Apple traders bailed out on lowered expectations. LIke they didn't see that one coming by just looking at the overall state of the economy. I'm really disappointed on the recent turn of events since I also had 100 shares of RIM I had bought at $106. Maybe some of these people will learn a lesson about not being so arrogant when they hear the terms "sure thing" and "recession-proof." I guess it's just part of being a zealot to be defensive if somebody says something they don't want to hear. You tried to warn them, but they wouldn't listen.

    So be on the lookout for getting blamed for Apple's stock decline. They'll say you caused it. Just own up to bringing the whole stock market down by writing your opinions of why a stock might go up or down. Glad I'm not in your shoes. Hopefully a few people will learn to listen to what you are saying and won't end up throwing all their money away on false hopes. Just keep plugging away with your advice.

    I'd like to believe that Apple will recover quickly when the economy recovers since it is a sound company that is expanding with it's retail stores all over the globe. Market share will continue to increase. They are still hiring even in this time of layoffs. I'm not overly concerned in these bad economic times, yet I'm unhappy that it's going to take longer to see that $200 a share price anytime soon.
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    Do you think a fed interest rate cut would prop the market back in the right direction?
 

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