Articles like this one from the ROI column in the WSJ never cease to amaze me. In the column, the author makes a 7-point case for why Apple investors should take profits, or at least be wary of the future. I’ll use just one of his quotes to sum up the gist of his entire article. In Seven Reasons Apple Shareholders Should Be Cautious, Brett Arends writes:
And the more it rises, the less attractive it gets.
“Less attractive to whom?” I might ask. To investors participating in Apple’s profits, those higher prices mean more money. To those not participating, perhaps those higher prices are producing sour grapes.
In the capital markets, there are usually going to be two sides to every trade, so it’s a good idea to maintain a degree of respect and good faith for the other party. However, a quick Google search of the author’s name brings up an article dated July 22, 2009, entitled, Despite Profits, Apple Is No Investment Opportunity. Since that bearish article, Apple’s stock price has gained around +73%. What’s interesting is that the author argues many of the same points in both articles – Apple’s competitors dropped the ball, the share price is overvalued, and Steve Jobs has health problems. It’s nearly a reprint of today’s article, plus some iPad commentary and about 7,300 basis points.
My point isn’t to bash a market opinion writer whose unhappy job it is to make predictions. My point is that these predictions more often than not fail. And despite the common knowledge that market prediction is practically impossible, this new bearish Apple article is the 2nd most-read article on the entire WSJ website today-that’s a lot of readers.
Let’s hope all those readers have a systematic process in place to help guide their investment decisions. Because following newspaper opinions probably won’t cut it going forward.
Disclosure: Apple (AAPL) is currently included in the PowerShares DWA Technical Leaders Index (PDP).
