Millions of people have had their lives profoundly affected by Apple and its products over the past 30 odd years. Steve Jobs’ vision, “To Move the Human Race Forward,” has been and continues to be realized, and it manifests itself in so many things we do, say and think. However, few people understand the nature of that vision, and how it can incite both ringing joy and deep disappointment, than the Apple Investor.
Most of us are perfectly happy with Apple. We have embraced the vision and become faithful and loyal customers. And for the rest of us, the occasional misstep, like Power Macs or Hockey puck mouses, can be overlooked. But investors of Apple can easily become conflicted, between their belief in the philosophy, and the performance of the stock. At times the chasm between the two seems infinite.
If you own Apple stock, you know what I mean. Many of you have made fortunes through long term investment, and your gains are so great that even a 40 percent drop in stock value can be tolerated. Your faith and immense brokerage account are comfort enough. But some long term investors, perhaps the ones who got in at higher prices, have had their faith tested. And with Steve Jobs gone and a dearth of new products over the past two years, your anxiety is building and wearing at your patience.
To compound matters, there are the pundits and brokerage analysts painting a doom and gloom future for the iMaker. The irony is most of these so-called pundits—who have unnatural powers to influence stock price—are not even users of Apple products. They are little more than drive-by, Blackberry-carrying Windows-using, big-company badged antagonists. The antithesis of the typical Apple customer. They think Apple is an anomaly, and that their analysis can prove that. They are continually dismayed when Apple proves them wrong, but this just incites them to do more harm.
Analysts are only half the army the Apple Investor must fight, there’s also the huge hedge funds, and index funds that were, and still are, overloaded with Apple stock. These behemoths control the vast majority of shares, and they are tasked with one thing, to turn a profit. To them, while Apple stock was ascending, it was a free ride to great wealth and bonuses.
As soon as things looked a little dim, however, they jumped ship, initiating a steep correction. This sentiment was also fueled by the drive-by analysts, and a bit by Apple’s indifference to the stock market while it focused more on long range goals around products and services.
The dirty little secret many people don’t understand is that most of these analysts and fund managers often have the same boss, the investment bank or broker. The analysts are part of the advisory service in the brokerage. Oh, sure, they’ll say the advisory service is separated by legalese and organizational walls to protect the customer, but think about it.
A broker makes money by handling transactions, the more stock sold, the more money they make. They really don’t care if the customer’s account goes up or down, so long as the customer trades with them. And analysts are the perfect vehicle for inciting controversy, which induces volatility, volatility is a way to measure stock price movement. So, from the broker’s point of view, the more volatility, the more profit they make. It’s insidious.
So, what does this all mean for the Apple Investor? It means you must separate yourself from the investment you have in Apple stock, from the enjoyment and productivity you get from Apple products and services. You must come to grips with the reality that there are people out there who understand how easy it is to move a big stock like Apple, especially when you combine the greed of financiers with the cultural upheaval a great company like Apple can promote.
Well, let me start this virgin column with TMO, by expressing the faith I have in Apple; this is a $1600 stock if there ever was one. The strong move off the bottom this past week is just the beginning of a historic run, in my opinion. You won’t hear that from even the most bullish analyst out there, but I exclaimed that prediction in the lion’s den, also known as TheStreet.com, and was ridiculed by their chief protagonist for it. In that prediction I said the bottom would be 390, and so far it would seem that call will stick, barring a natural or Fed-induced disaster.
There’s going to be plenty of head winds in the course of reaching $1600, and it will take a while. I figure mid to late 2015. My initial target is $1404 for the end of 2014 to mid 2015. Apple is on the verge of a another revolution in the market. Will it be the iTV or wearable devices? I don’t know. I do know, that we will be fighting the analysts, fund managers, and copycat companies like Samsung, and online financial rags turned shills, all along the way. No one ever said moving the human race forward would be easy.
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