Short squeeze: Apple plows right through $300

Apple closed at $300.35 Thursday, putting 90% of the analysts who cover the stock underwater.

apple plows thrrough 300

Found in a finance chat room:

Bet BSU: This is a squeeze of the funds who are underweight Apple. This could go on for 2 weeks. They probably need to buy about 650 million shares to fix their problem. Just sit quietly. They’re doing all of the heavy lifting. 🙂

My take: Bet’s guess is as good as mine. What I can say with confidence is that this is the most pathetic set of price targets I’ve ever seen.

13 Comments

  1. John Konopka said:
    Don’t some funds need to sell Apple because the price run up means they are overweight Apple? Just wondering.

    5
    January 2, 2020
  2. Michael Thompson said:
    As of 9/30/19, Institutions owned 60.18% of Apple. That is one of the LOWEST percentage that institutions own of any major stock in Apple’s peer group.

    Most major stocks are owned 70-80% by institutions. Smart Money? Nope.

    5
    January 2, 2020
    • Fred Stein said:
      Replying to you Michael and to John. Disclaimer, just my opinions….

      First “smart money”? Hardly. Institutions are not institutions. They’re collections of people with emotional bias and pressure impacting their judgement, just like all of us. In their case, if the public at large catches the contagion of fear or its cousin, FOMO, they have to conform. Stupid yes. No one asks them why weren’t they buying in Jan 2019. The same public wants to see AAPL in their mutual funds, etc. today. Also, many of them have figured out, finally, that Apple can grow.

      As for funds being overweight, I’ll hazard a guess. For every fund that is overweight, there are two growth funds, that are adding, or have added AAPL. Also, the market as a whole has raised the value of the rest of the holdings, slightly muting the impact of AAPL’s great run.

      3
      January 2, 2020
  3. Jamie McDaniel said:
    Nearly the complete opposite of your December 10, 2018 article subtitled “And then there were none.” Glad to be at $300! The new floor?

    1
    January 2, 2020
  4. Romeo A Esparrago Jr said:
    Ha, thanks, Mr. PED…SPARTANS!
    Can’t wait to read the thoughtful updates. Great job on Apple 3.0 being my source for those.
    Yes, Happy New Year to 300 being our new low. Bottom’s Up!

    1
    January 2, 2020
  5. Ralph McDarmont said:
    300 is good. But I am greedy. Let’s shoot for 400. I have been long AAPL for 20+ years. I have cried about Steve many times, not out of greed but pure respect. Tim is in the same league, big time. Apple’s leadership has put my three kids through college. I did nothing but watch. Sometimes I flinched, but that is what investing is all about. My family has bought so much Apple stuff the company should plant a tree in my kids’ name. LOL

    6
    January 2, 2020
  6. Jerry Doyle said:
    Ped says: “… What I can say with confidence is that this is the most pathetic set of price targets I’ve ever seen.”

    My, my, my! Ped’s statement above speaks volumes on how analysts have grappled in their futile efforts to understand fully Apple’s operations. The chart above shows embarrassingly and pathetically how they all are running to catch-up, and those not running are standing scratching their heads.

    Ped, all those analysts had to do was subscribe to your blog and read the commentaries of Apple long term investors and those analysts never would have been caught naked as the tide moved out to sea. There they all stand now in their humbled and humiliating stances wondering: “…what happened?”

    1
    January 2, 2020
  7. Kirk DeBernardi said:
    Happy 300 everyone, especially the faithful.

    May it stick.

    If I could, I’d buy the house a round — Cheers!

    0
    January 2, 2020
    • Mark Visnic said:
      “May it stick.”

      Not a chance Kirk. It has higher to go. 🙂

      0
      January 2, 2020
      • Kirk DeBernardi said:
        @ Mark V.

        “Stick” as in, not slip below.

        I believe Apple has engineered itself into one of the finest moments in it’s history with the current crop of devices, software and services tied up with a big bow of customer satisfaction. It’s anybody’s guess how far they can go.

        I was at the last shareholders meeting that Steve Jobs attended. While he was alive at the time of the next shareholders meeting, he was too ill to attend and had already announced Tim Cook as the new CEO.

        At that meeting Tim Cook had fielded questions about Apple’s current product lineup and it’s when he first stated that all of Apple’s products could fit on a simple banquet table. He has since mentioned the same quote a number of times.

        I left the meeting thinking that he wanted to add to AND enhance what the table would have to offer in the future.

        I’d say he’s off to a good start. What a ride.

        0
        January 3, 2020
  8. Gregg Thurman said:
    Volume this week has been about 20% above the daily average since the October earnings report.

    Lots of good reasons for this rally to continue:
    A. Window dressing. Investors in mutual funds will be asking management why they don’t have AAPL in their portfolios.
    B. Similar to reason “A”, institutions underweight AAPL will be filling their coffers.
    C. Momentum investors will be jumping in for quick profits.
    D. Short sellers are covering their upside-down positions.

    In after-hours trading, AAPL hit $311. I’m not expecting that tomorrow, but I am expecting a continuation of this rally. To that end today I placed an order for JAN 10 $292.50/$295.00 Call Spreads at $1.86. About a third of the contracts ordered have filled. Hoping the balance is filled tomorrow.

    Previous orders for JAN 10 Call Spreads were canceled because AAPL has blown right past those.

    1
    January 2, 2020

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