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Apple, Google Down for No Good Reason

Jeff Macke Sep 29, 2008 1:50 pm


		Even giants subject to bear-market whims.

Greetings from New York, where Roget himself would be running out of ways to say “I don’t like ‘em long or short” by now.

Someday, there’s going to be a big rally. That rally may or may not come after a massive drop. There’s plenty to discuss in this fascinating, historic time - but there are simply no trades being generated from all the palaver and soundbites getting cranked out all over the place.

As Leonard Cohen sang, “Everybody knows the dice are loaded." They have been for a long time - but we now have committees who don’t understand craps actively reloading the dice in closed-door meetings.

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You can bet based on a hunch as to how the new game is going to be fixed. I have no idea. As a result, I remain largely cashed out and, if not “happy” about it, at least much less stressed.

Which doesn’t mean I’m not watching the game unfold. Here’s what’s standing out to me about the train wreck du jour:

It’s not the news, but the reaction. Apple (AAPL) is down $17 on a downgrade - what we in the industry call a “negative” stock reaction. It’s $110 as I type. If I were a) addicted to taking risk or b) going to spend my entire day in front of the monitor, I’d consider a long shot with a $105 stop. Of course, neither A nor B is the case.
Speaking of cult stocks, Google (GOOG) is spelunking under $400 today on even less news than Apple. What does Google have to do with a debt meltdown? It’s a stock, and thus subject to bear-market whims. The most darkly amusing thing about outlawing “evil shorts” is the idea that bear markets are brutal for everyone, bulls and bears alike.
Speaking of nowhere to hide, the Irish stock market fell 11% today, the Emerging Market ETF (EEM) is taking a 7%-plus beating, and China’s FXI ETF is down 9%. Every culture has a word for “pain.”
Far be it from me to speak out against venting and anger. I’m a big fan of both. I just don’t think we’re going to be able to speed along the free market “fixes” being proposed here. It’s going to take time, and it’s going to hurt. The market we knew for the last decade is gone. I’ll mourn it, and I may even do a couple rebound-date type of trades. But it’s going to take me awhile before I can trust again.

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Comments (5)

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David Fitzsimmons

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09-29-2008, 1:59 pm
Is it not obvious that the most speculative names of the most recent bull market - the so-called "high beta" issues - should go down on the decline of "animal spirits" (or "irrational exuberance") implicit in bear Read More

Dan Shelburne

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09-29-2008, 2:00 pm
This was a conspiricy. Both analysts came to the exact same figure of $5.47 per share for 2009 Estimates. They drove the stock down to accomodate the Hedgefunds and Short sellers. Put volume was very heavy last week, and the Hedgefunds are requir Read More

Michael Kernan

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09-29-2008, 2:43 pm
Bailout bill killed. I hope the cheerleaders on CNBC like Cramer get fired. Hoofy will be released from custody as soon as we're sure there won't be another vote. Read More

Michael Kernan

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09-29-2008, 9:28 pm
RINGSIDE ANNOUNCER: Ladies and Gentlemen, may I have your attention please. Welcome to Wachovia Center for tonight's main event, the battle for the title of best stock trader in the free world! Scheduled for 15 rounds, you will witness two of t Read More

Taylor Beatty

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09-30-2008, 12:06 am
Thats what happens when people bail...and sad thing is, someone will continue to make gains one way or another through some grand orchestrations: http://beta.equedia.com/blog/view.php/Synthetic-Short-Stock-Explained Read More


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