AAPL’s April 2012 Sell Off

  • Posted: 18 April 2012 05:16 PM #16

    Mav - 18 April 2012 08:05 PM

    6% annualized per my accountant.  Not that cheap to me…

    It is when you’re paying on taxes that represent about 30% of your AAPL holdings, and those holdings are going up at 25% per annum.

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  • Posted: 18 April 2012 05:27 PM #17

    You fellas seeing the QCOM lower guidance after the bell?  Although their earnings came in better than expected they are guiding down.  How will this bode for AAPL?  We got hit AH and are making a bit of a recovery now but we’ll see.

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  • Posted: 18 April 2012 05:40 PM #18

    I just find it hard to believe that there was an en masse decision to sell shares and continue selling shares as the price of the stock is rapidly falling because cash was needed to pay taxes. 


    Institutions needed to load up on cheap shares prior to earnings, and they can easily sway the price of the stock in the short term.  They were successful in shaking out the weak hands and picking up cheap shares.

         
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    Posted: 18 April 2012 05:48 PM #19

    Agreed, oncdoc (I assume that’s your specialty?) It’s just market funny business I think. 

    AAPL is still at the mercy of the market for a little while longer.  Earnings run-ups aren’t what they used to be.  EBAY’s great, QCOM’s not exactly super-great, and QCOM is the excuse for tech to sell off AH.  Whatever.

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    Posted: 18 April 2012 05:53 PM #20

    Mav - 18 April 2012 08:05 PM

    6% annualized per my accountant.  Not that cheap to me…

    For 2011, the penalty was 2.2% (total penalty, not an annualized rate). For Q1 and Q2 of 2012 the annualized rate is 3%. The rate of interest is determined on quarterly basis. If it stays at 3% for the second half, the total penalty for 2012 will be 1.9%.

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  • Posted: 18 April 2012 07:17 PM #21

    Mav - 18 April 2012 08:48 PM

    Agreed, oncdoc (I assume that’s your specialty?) It’s just market funny business I think. 

    AAPL is still at the mercy of the market for a little while longer.  Earnings run-ups aren’t what they used to be.  EBAY’s great, QCOM’s not exactly super-great, and QCOM is the excuse for tech to sell off AH.  Whatever.

    I have a hard time getting excited about AH moves, when typical volume is less than 1% of regular hours, and today’s average trade is ~185 shares.

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    Posted: 18 April 2012 07:24 PM #22

    Exactly, AH is only fairly indicative for post-earnings, really, and even then not always (GOOG)

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    Posted: 21 April 2012 04:47 PM #23

    Tax related selling in Apple this year would justifiably be higher given the recent stock appreciation. That same stock appreciation would justifiably explain larger sums being taken off the table in advance of what is being portrayed as an uncertain earnings report. Add that selling to the well-established Friday OE drag on share price that we’ve been seeing for the past year and we have a plausible explanation for the decline.

    I am looking hard, but I’ve seen nothing yet to deter my conviction of solid earnings. I’m mildly upset I did not get to buy in for the biggest sales, but perfectly calm about being all in and confident that the sale ends by Wednesday (at the latest).  I’m expecting Apple is in the 590s or higher by Monday’s open.

    [ Edited: 21 April 2012 04:51 PM by jjjz ]

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    Posted: 21 April 2012 04:48 PM #24

    590s. smile

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    Posted: 21 April 2012 04:52 PM #25

    Mav - 21 April 2012 07:48 PM

    590s. smile

    Corrected, thanks!

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    Posted: 21 April 2012 04:53 PM #26

    Mav - 21 April 2012 07:48 PM

    590s. smile

    I like $690’s better!  :-D

         
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    Posted: 21 April 2012 07:13 PM #27

    I might be totally wrong, but this is what I think might have happened the last two weeks.

    Some of the big boys (i.e., the players who can buy/sell a couple of 100 thousand stocks) were trying to get a better entry point into the stock before earnings. They used the psychology of the market in order to have other market participants sell their stocks even though they might have not want to. This was actually not that hard.

    The starting point was the great appreciation in price since January. Everybody made tons of money with AAPL, but everyone was also a little sceptical about how long this could go on like this. So people put in stops or thought of target prices when they would sell, in order to keep a decent profit. On the other side there were still market players (i.e., mutual funds, hedge funds, etc.) who were not invested in AAPL especially after the dividend announcement. And I think that they kind of knew that once Q2 earnings are reported they could even see higher prices. So what do you do? You try to use (1) the sentiment in the market that AAPL has increased to levels that are unsustainable and (2) the fear to lose what you have gained since January. Sell some positions that you have and trigger a negative cascade. Whoever did that just needed enough capital to ignite the sell-off. Stopps, algorithms, and other market players will do the rest. You might lose some money, but if it works out you can buy even more stocks back at a cheaper price. Do this again and again within a day or within a week and sentiment about AAPL might change into the negative. People (traders, institutions etc.) will get scared and will sell whenever they see a good price point in order to save some of their profits. So any serious bounce will get sold easily with some pressure from the market players who wanted to see the stock price go down.

    I know it sounds like a conspiracy theory, but this is the theory that makes most sense to me. I watched some days in which the selling occured only after some large volume trades pushed the stock violently lower, then some more volume followed to punish it even further down. Once the dust settled and it seemed as if the stock might try some upward movement there was again some large volume trade that pushed the stock lower. I might be completely wrong with my theory, but if this is true we will have to see some major buying in the two days left before earnings. The “big players” might have already bought in the last week during the lows, but I think that they have waited with their major moves until the end of this week (OE). What would that mean with AAPL after earnings?

    Three weeks ago I thought that any iPhone unit sale number over 30 million would be hard to attain in Q2. But after the Verizon iPhone number came out (25% lower that Q1), I checked again the countries in which the iPhone got only available very late in Q1 or in Q2. I was perplexed since I think that these countries might actually buffer any shortfall by the lower sales numbers in the markets that got the iPhone 4S in early October. So I got more optimistic about Q2 and could understand anybody who would like to profit from it by getting in at a low price and (maybe) selling after a stellar earnings report.

    At the end all this is just a gut feeling based on some observations I have made and trying to make sense of the last two weeks. I might be totally wrong, so please do not use any of my theories as a basis for your investment decision. Just think about it.

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    Posted: 21 April 2012 07:37 PM #28

    Big Al,

    Your theory is perfectly plausible.  The Big Boys prefer to buy shares as cheaply as possible prior to events that they believe will result in added intrinsic value to a stock.  Believe me, growing earnings 90% would be such an event.

    But how to acquire those shares as cheaply as possible?  Direct manipulation is one way, and we know it happens.  Indirect manipulation (FUD) is another, and a third is using tools available more to them than to us…at least in size. This would be leverage, inside (but not illegal) information and concerted action.

    We have seen all this before. We will see it again many times.  We need to constantly examine the fundamental story so as to be comfortable with our models, then prepare to withstand the power of TA when the Big Boys go to work.

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    Posted: 21 April 2012 08:01 PM #29

    I agree with Big Al.  In the immortal words of George Carlin: “It’s a big club.  And you ain’t in it”.

    Link if you never heard it

    [ Edited: 21 April 2012 08:05 PM by incorrigible ]

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    Posted: 21 April 2012 08:48 PM #30

    Al, I concur, substituting “Evil Overlords” for “Big Boys.” wink