11/19/2015 – A flat day with the Dow Jones down 4 points (-0.02%) and the Nasdaq down 2 points (-0.03%)
The original post was published on May 21st, when Apple’s (AAPL) stock price was putting in an important all time high (double top). At that time I have suggested that smart money was distributing the stock. Apple’s stock price is down about 10% since then.
It appears nothing has changed. If anything, big guys are trying to unload at a faster pace. This Goldman Sachs analysis was released just a few days ago. Apple’s shares are going to soar 43% Sure, and I am nominated for a Nobel Prize in literature.
That is to say, don’t be a pawn in their game. My view on Apple hasn’t changed.
A few weeks ago Apple (AAPL) has reported yet another great quarter. Yet, despite the outperformance, Apple’s stock price is barely up. So much so that most investors, market pundits and money managers are dumbfounded by company’s recent decline. After all, it was not supposed to happen. Apple is the best performing company in the world (which is technically true) with like a zillion dollars in cash on their balance sheet.
What gives? I will simply repeat here what I first said on May 21st. When AAPL was putting in its top.
May 21st Update: Alert: Smart Money Is Trying To Distribute Apple (AAPL) To Fools
I firmly believe that the overall market and Apple (AAPL) will crack at the same time. Hence, overwhelmingly bullish coverage of the company and recent analyst upgrades should cause some concern. For instance…..
- CARL ICAHN: Apple is worth $240 per share
- Morgan Stanley says Apple shares could rise 50%
- Here’s the top stock pick from each of 50 biggest hedge funds – Quite a few of these hedge funds have a massive long Apple position.
There is another name for all of the above. Distribution. The smart money is trying to unload their massive positions to unsuspecting retail investors in an illiquid market. A game that is as old as the stock market itself.
Listen, I don’t have anything against Apple. It is one of the best performing companies out there. Yes, it is overvalued, but its valuation is not as bad as some of the junk floating in the market today.
I am merely pointing out that retail investors shouldn’t be sucked into a game that they cannot win. Make no mistake, once Icahn, Morgan Stanley and the rest of the big guys unload their long positions (if they are smart), Apple’s stock will fall like a brick. Just as the market will. That is to say, the opportunity with AAPL might be on the short side of the trade, not the long.
Year End #9 – Smart Money Is Still Distributing Apple (AAPL) To Fools Google