James Stewart, writing for the NYT in Feb 2013, presuming that Apple’s late 2012 stock drop was inevitable and correct:
By November, with Apple stock in the midst of a precipitous
decline, they were still bullish. Fifty of 57 analysts rated it a
buy or strong buy; only two rated it a sell. Apple shares
continued their plunge, and this week were trading at just over
$450, down 36 percent from their peak.
How could professional analysts have gotten it so wrong?
As I type this, AAPL shares are trading at $115 after hours. Adjusted for last year’s 7-for-1 stock split, that’s $805/share. So those 2012 bulls look pretty smart.
It may be no coincidence that the only analyst who even came close
to calling the peak in Apple’s stock runs his own firm and is
compensated based on the accuracy of his calls. Carlo R. Besenius,
founder and chief executive of Creative Global Investments,
downgraded Apple to sell last Oct. 3, with shares trading at $685.
In December, he lowered his price target to $420, and this week he
told me he may drop it even further, to $320. […]
Mr. Besenius based his recommendation on technical factors — as
Apple hit $700, its upward momentum and trading volume were
slowing — as well as more fundamental concerns about product
quality and innovation, as well as growing competition from rivals
like Samsung. And there were more subjective factors. Mr. Besenius
said he became uncomfortable with what he deemed Apple’s
arrogance. “I loved Steve Jobs,” he said. “He built a great
company. But he was one of the most arrogant C.E.O.’s I’ve ever
met. The way he introduced new products was one big display of
arrogance. He ridiculed Microsoft as ‘Micro who?’ That’s a good
reason to be cautious. A little humility is a good thing.”
Brilliant analysis there. Steve Jobs was too arrogant in product introductions so the stock deserved to fall.
★ Tuesday, 27 January 2015