Wednesday, 27 March 2013

If you forecast rain long enough...'ll be right eventually.  So yes I do write for MarketWatch so I'm not impartial but I thought this article today was rather silly.

From: MarketWatch: An ‘I told you so’ moment for early Apple bear

In 2010, when Apple AAPL -1.96%   stock was trading at $199, Edward Zabitsky, CEO of ACI Research in Toronto, was the only analyst on Wall Street to rate the stock a “sell.” Over the next two years, shares went on a tear, peaking at just over $705 and making Apple the world’s largest company as measured by stock-market value. Today, shares have fallen by more than a third from that high — to $461 — and Exxon Mobil Corp. has overtaken Apple in the rankings. Through it all, Zabitsky has stuck to his bearish call; and while he has since been joined by a couple other pros who have sell ratings on the stock, including Adnaan Ahmad at Berenberg Bank and Per Lindberg at ABG Sundal Collier, Zabitsky retains the distinction, and in some circles the notoriety, of having gotten there first.

You have a $274 price target. Is that still too pessimistic?
Zabitsky: It’s formally a one-year target, but in 3 to 6 months we’re going to see that play out. The reason I started to make noise was the rise of Samsung. If you say that now, it’s not challenged.

Now, I'm not a big fan of Apple actually (I don't particularly like Microsoft that much either) even though I have an iPhone and iPad.  The much vaunted user intuitiveness and friendliness is vastly overrated and I find them to be growing quite stale over the last few years.  However, its undeniable the profit and growth they've been able to get from it and its been one of the most successful products ever.
So this guy rated Apple a sell at $199 in 2010.  Its now at $451 and had hit over $700 just 6 months ago.  So if you had bought when they said sell, and sold at the perfect time, you would've netted a cool 250% gain.  If you didn't sell at the perfect time and still hold it today, you'll be only up 127%.  Boohoo, only a 127% gain in 3 yrs.  If you followed this guy's advice, that's how much you would've left on the table.  So why would he be famous or popular at all?  Shouldn't he have been fired for making one of the worst investing decisions ever?  
Maybe if Apple rose skyhigh and crashed into bankrupcty that he can argue his case, but it didn't and Apple is nowhere like that.  He was wrong, plain and simple.  In the stock market, its easy to know if you're right or wrong, just compare the amount of money you made (or didn't made).  Now you can be right but still lose money if you didn't time it right, but its clear.  
Ask yourself this, who would you rather have managed your money?  The guy that made you 127% or the guy that costed you 127% opportunity cost loss?  I know which one I would've preferred.  Oh and this article is now the most popular on MarketWatch...  

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