Home > Economics > Nice to Know That the Economy Is in the Hands of Such Responsible People

Nice to Know That the Economy Is in the Hands of Such Responsible People

January 23rd, 2010

Great. My Apple stock was doing great–at $215 a share, and set to go way up. Everyone rates it as strong, and there’s general concurrence that it will go up to at least $260, with many speculating that over the next few years, it can go up to $500 or even $1000–and for very good reason. Apple is set to release the tablet, computer sales are up, it is conquering the smartphone market worldwide, and its computer market share is growing, with lots of potential.

But over the past three days it has slid from $215 to $197, $10 of that just in the last day. WTF?

And then I see the reasons:

The game was “on” big time this week. Petulant “let’s teach Obama a lesson” Street players did their thing on Thursday and Friday (today). The market’s big move down was partly the Street’s retribution against the Obama Administration for daring to regulate proprietary trading by banks.

The news on China and Bernanke didn’t help, but they weren’t the only causes here:

Apple (AAPL), being a large part of the QQQQs, was caught up in today’s down draft and was sold and shorted mercilessly, finishing the day down $10.58 (5.04%). Helping to accelerate the selling was a false report today about Apple (AAPL) being downgraded by Deutsche Bank. This “Apple (AAPL) downgrade” story was pumped widely by the Street echo-chamber (i.e. hedge funds, institutional trading desks and other denizens of Wall Street). It is my opinion that the majority of trading desks understood precisely what happened at Deutsche Bank, but held tight to the truth and may have intentionally misled the financial press (by omission).

Don’t you just love it when your personal fortunes are in the hands of these pricks playing their little games? As for Obama regulating trading, the Street’s reaction proves exactly why there should be a lot more regulation.

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  1. Tim Kane
    January 23rd, 2010 at 12:23 | #1

    I took one semester of corporation law. My general conclusion during that class was that owning stocks was not a good idea because you are basically putting your money in the hands of CEOs and the business and finance “community” (for lack of a better word) who basically are self absorbed, self center, lacking of conscience, and operate in an environment that encourages short term selfish thinking and where the bulk of the bargaining power is in their hands, not yours.

    Shareholders of common stock are referred to as the residual interest. That means a holder of stock gets what ever money is left over after everyone gets their cut, and everyone and their brother has taken a run at the companies money… you get the ‘residual’ or whatever’s left over.

    I really don’t like the whole idea of that.

    I think when you invest in a company you are investing in (1) their management (a combination of managment personel, systems and policies) (2) their CEO (who can either strengthen the management system or undermine it.

    In the case of Apple, I basically believe you are investing in Steve Jobs, his talent, his vision, his team, his systems etc… and his pathologies (the things that drive and motivate him) . If you recall, Apple was a wounded animal when he re-took it over back in 1999 (or there abouts, as I recall). Apple had good people, perhaps good systems, etc… but the difference in their performance with and without him is substantial.

    In my mind his second act as Apple’s CEO is perhaps one of the greatest tenures of a CEO in history. There is no under cutting it. That’s a good investment, but you are riding the tiger. He could wake up tomorrow and be driven by an entirely different set of motives.

    So in general investing in stocks should be highly selective. Otherwise you are better served to invest in bonds or some other financial instrument.

    January 23rd, 2010 at 15:59 | #2

    Somehow, I miss in this blog any comments about Obama having lost his supermajority in the Senate: how about his health plan? Sic transit gloria?

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