Continuation from yesterday……AAPL Trade #1: Buy Apple at $1.25 a share in May of 2003.
AAPL Trade #2: Sell Apple in January of 2008 at $22.50 a share. Net realized gain from the previous entry point in 2003….$21.25 or 1,700%.
AAPL Trade #3: Trading in and out of the stock in April and September of 2008 at around $22.5 a share. At net zero capital gain/loss.
AAPL Trade #4: Going short at $22.50 in September of 2008.
As was mentioned earlier, an analyst familiar with the overall composition of the stock market would have been aware that the market was likely to bottom in the first quarter of 2009. Any investor with access to such information should have been watching Apple’s stock price for signs of a reversal into the subsequent bull market. Ready to cover his short position and go long at a moment’s notice. This instance occurred in March of 2009 when the company’s share price broke above $15 a share and pushed higher.
AAPL Trade #5: Cover our short position at $15 in March of 2009 and go long at the same time/price. Net realized gain from the previous short entry point…… $7.50 or 33%. Overall profit…..$28.75 or 2,200%.
Following 2009 bottom, Apple’s stock price continued to rally unabated until reaching $100 a share price by September of 2012. This action was followed by a quick reversal and a subsequent 45% decline into its April of 2013 bottom. Unfortunately, it would have been hard to anticipate this quick decline. Outside a few fundamental reasons (management, slowing sales, guidance, etc..) very few people could have predicted this particular decline. Even with the help of our mathematical and timing work. If anything, our mathematical and timing work would have suggested that Apple’s stock price would continue to appreciate until the bull market terminates in 2014.
Nevertheless, a position trader should have traded in and out of the stock at around $70 a share. At a net zero gain/loss. Bringing us to today.
AAPL Trade #6: Considering trading in and out of the stock at $70 and today’s price of $95, net realized gain from the previous entry point…..$80 or 533%. With the overall profit at…..$108.75 or 8,600%.
To Be Continued Tomorrow…….
