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The Case Against Apple


Utilizing both fundamental and technical analysis, I see potential for some bad apples.

Generally, the fundamental and technical camps are known to look askance at one another, with the fundamental group the smugger of the two, being that they're generally more prestigious and more highly compensated -- including the top-rated sell-side brokerage analysts of Wall Street.

While I understand the enmity in that context, another part of it doesn't make sense to me at all. After all, the fundamental tenet of technical analysis (yes, technical analysts have fundamentals in their racket!) is that what they do subsumes everything known about industries and companies in analyzing the trading actions of the marketplace for stocks, including the actions of those who produce and rely on fundamental research. Likewise, the fundamental view assumes that traders in the stock market will become attracted to or repelled by the fundamental conditions of the companies whose stocks they trade, thus affecting stock prices accordingly.

So the two groups actually include one another in mostly overlapping universes. Alas, I consequently wonder, why can't the farmer and the cowman just be friends? After all, they're just two squads on the same team.

Back to Apple

In the stock market, there is no God, and that includes Steve Jobs and Apple, even if that's not a popular opinion. It's a fact. And it's true of every great company that's had a great business and a great stock. Even Apple has had extended "dog days" most market aficionados have long since forgotten.

Just take a look at this graph.

Click to enlarge

Hard to believe, but that's Apple's stock during the 1990s, specifically, from the beginning of 1990 to the beginning of 1999. While the overall market was getting its teeth into a burgeoning tech boom leading up to the dot-com crash of 2000, this is what Apple was doing. It traded over 17 bucks (split-adjusted) in April of 1991, the high point of this depiction. On the last trading day of 1997, it wound up the year at $3.28 on the same split-adjusted basis.
No positions in stocks mentioned.

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