Apple Stock Tanks

The herd that is the market has spoken: Apple is not invincible on launch day. Apple launched the iPhone 2.0 as well as some innovative software and services, only to see its stock slump by over 4%, to $176.

To some, this was the expected result:

5/12/08 15:27, Cameron Newland wrote:
If everyone is buying/holding [in advance] to profit from the buying surge at the press release for the 3G iPhone, and all of us are going to sell during the price pop, isn’t the stock really going to tank on high-volume on announcement day? Self-fulfilling prophecy.

Others seemed to think that Apple’s stock, invincible as ever, would be the “next big thing”, breaking $250/share after the announcement (as I write this, Apple stock is hovering around $180/share):

5/12/08 17:19, Clark Kent wrote:
Guys, wake up and smell the coffee! The 3G iPhone is going to be announced tomorrow or next Tuesday [his prediction proved to be false].
AND YOU THINK AAPL will plunge?

I think you greedy sh*ts should all sell your AAPL today and get back
to under your rocks.

YOU ARE THE PROBLEM WHY AAPL always go up and down. You are the herd
and you stampede on fear and hear say.

Go hide under some rock, you do not deserve to be AAPL holders.

Steve and Apple are great companies and they are too many times the
victims of speculators, market manipulating anal-ysts and run-
away_while_I_can self-fulfilling prophecy traders like yourselves. [...]

I’ll be laughing my way to the Bank when AAPL goes upwards of $250
overnight AH AH AH AH

AH AH AH AH, indeed.

Later, this same user, “Clark Kent”, reasons that because television personality Jim Cramer suggests not to sell Apple on announcement day, that we should blindly follow his advice. That notion runs counter to the very effective strategy of doing THE EXACT OPPOSITE of what Jim Cramer recommends. Remember that Jim Cramer famously advised his viewers to hold on to laggard Bear Stearns at $63/share earlier this year, less than a week before the struggling bank was bought by JPMorgan for $2/share. Why, then, should we heed his advice?

Both Jim Cramer and this “Clark Kent” character are emotionally attached to their favored stocks. Their mistake ensures they’ll never stop to consider what everyone else (the market) thinks, and in the end their ignorance will only make them poorer. Some people never learn…

1 Comment to Apple Stock Tanks

1. 

   situations surrounding methodologies used to derive causal relationships between events a and b, especially those displayed at the preferred internet forum tend to be without value, as has been my experience. i am not a smart as the sentence above may suggest;big words - problem of induction
parksmarts on June 9th, 2008

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