Thursday, January 18, 2007

Sandbagged by AAPL

As some of you have so wisely pointed out, Apple sandbagged their investors with a hyper-pessimistic second quarter projection despite a record breaking/blistering first quarter. I'm sure that they did this on purpose to take some air out of the stock so that it would have a soft landing instead of a crash when the options scandal hits the news again.

What is really interesting here is that the market was pulling the shares down yesterday well before the news was public when all along it should have been rising. This means that people at the hedge funds knew something bad was highly likely. Smells really fishy to me considering the rest of us were sure that the quarter was going to be stellar. Such is life and so we live and learn to watch for this early warning.

Cramer says hold on AAPL, I am saying screw that - I'm taking the money and running until the stock bottoms out and then getting back in when it's safer and cheaper. I still made $10-$12/share so I'm not feeling bad but I don't want to be greedy and get crushed by the stampede of panic that's sure to ensue.

I am selling AAPL today at around the pre-market price of 93 bucks and buying back in probably this summer or when the stock goes under 80 which ever comes first. At the same time, I'm dumping Intel and Verisign at cost but staying on for the ride with DivX and Microsoft.

I'm still bullish on the long term prospects of Apple and Intel but the short term prospects are bleak. Had they not tempered the next quarter, the stock would have bumped up by 5-10 bucks. Smart move though all things considered but unexpected. This is a great opportunity to sit back and wait for both to bottom out or dance sideways for a couple of quarters.

Yeah, I know that I've flip flopped on this in less than 24 hours but sometimes you gotta change your route to get to the same destination.

1 comment:

Pain said...

Come in and enjoy!

Qu'ul cuda praedex nihil!