Phillip Elmer-DeWitt of Fortune gave AAPL investors food for thought today, with his reasons as to why AAPL has been rotting to it's investment core. Apple's stock value has fallen nearly $96 billion since it's peak of $644 on April 9th. There will always be Wall Street power players able to flex their financial muscles pushing stocks one direction or another. But why is it that these brilliant financial investors sometimes talk as dumb as a box of rocks, spewing forth financial rhetoric that makes no sense? Something doesn't seem right.
Yesterday, DoubeLine's CEO, Jeffrey Gundlach, told a large group of investment managers he was shorting Apple. "I just wonder how many people will queue up around the block for an iPad 87." It's a dumb statement. In fact, it makes no sense at face value:
- An iPad 87 will arrive well after you, me, and Jeffrey are dead, so what does that matter?
- Jeffrey's exaggeration - at best - appears to be fear mongering. It might as well be Steve Ballmer on stage making the same claim. This certainly isn't financial analysis.
Gundlach is pointing to the idea that he doesn't believe Apple's fortunes can last forever. But is this any kind of revelation or reason to sell AAPL now? Gundlach's comments are about as prophetic as scientists letting us know the sun will eventually burn out. Gee, what a shocker.
Evaluating the facts of Apple's business while ignoring rhetoric:
- Apple is well short of it's value vs other tech giants
- Apple shows huge growth potential in it's most important product lines
- Apple's competition continues to look inept
- Apple signs of slowing down any time soon
Gundlach and other's talking points likely lean on the fact they are shorting the stock – now. It seems quite clear they are hoping to influence the investment community with dumb, vague, negative suggestions, in order to smartly leverage a deeper APPL sell-off. From AAPL's latest movement, it appears to be sliding further south based on financial movers and shakers foaming at the mouth, vs any logical analysis of the company.
Is this type of talk from large financial investors illegal? It would certainly seem very hard to prove they are trying to purposefully influence the stock. But then again, their glossy, negative comments on Apple, being shouted out directly in the face of stellar performance make these financial giants seem pretty dumb. Rather interesting when considering how smart we know they really are...
Disclosure: Mark Reschke owns shares of AAPL. In no way are Mark Reschke's comments an endorsement to buy or sell any stock, as he is giving his personal opinion only.