Great lesson learned - AAPL
No matter how much you tell your kids not to touch the hot plate, they will touch it until they get burned. The real issue is how badly do they get burned when they get burned. As a parent, if you really want to protect your child, you might have to take their hand and burn them lightly. They will then remember what it means when you say "hot - don't touch!".
I got burned, eventhough I knew better. Let me explain and let this be a lesson for you as well. The truth is that you will not understand it fully until you get burned too. But here it is anyway.
Little over a week ago I bought Apple (AAPL) at $60. Recently it was as high as $86. Now, we all know Apple is a very successful company. Their computers (i-mac) and (i-pods) are awsome products. I am sure you all have one in your family. The stock however, fell from $86 to $60 in 2006. I said to myself this is way overdone. Now, it is trading at a reasonable price. I bought. (You may refer to my first note titled "welcome" to know what I had at what price)
Yesterday, three different major (I mean Major) brokerage houses lowered price target for Apple reasoning that Apple's business may slow down. Investors sold based on their reserch. When I heard the news, I too, did not wish to be with a company that will slow down. ( I trusted the Wall Street guys again). The stock went from $64 to $61. I sold at $62 for a small profit but disappointed that it did not reach my initial target at $72. (refer to my notes two days ago). Many others sold too (trading over 33 million shares!). Then today, suddenly news comes out that Apple will be able to run both Mac operating system as well as MS Windows system! The stock jumps at the news and closes today at a price of $67 per share!
OK, let's calm down. Let's think this through like an intelligent being. Let me ask you a question. Do you actually think the major Wall Street firms did not know that Apple will announce a big news like this 24 hours later? I mean these guys have dinners with the CEOs every other day! How can you get many shares at reasonable price? Make other people sell at cheaper price. So here is the logic, two possibilities are found: #1. These major brokerage firms actually did not know the news were coming and said business will slow and lower the target price for Apple one (1) day before the actual news. #2. They knew but they still lowered the business prospect for Apple anyway and lowered target price (basically asking people to sell).
Either way it does not look too good.
As I have said before, they have an agenda different than yours.
I knew this but I stil got burned again (well, in the form of lost opportunity anyway). Trust me, I will be more careful next time. I hope you will too.
In the end, the truth is that whether these major firms are right or wrong we need to listen. Because they have the ability to move the tide temporarily. There are enough people out there that will blindly do whatever these firms say. And that's a lot of money.
The only way to win this battle, is to have a longer vision. Not be swayed by daily news. Unless your initial plan was flawed, you stick to your guns. I should have stayed.
P.S: This is what's happenning to MATK. I will further advise you on this tomorrow.
PPS: MATK is currently my largest holding. (this is for long term guys). Good night.
I got burned, eventhough I knew better. Let me explain and let this be a lesson for you as well. The truth is that you will not understand it fully until you get burned too. But here it is anyway.
Little over a week ago I bought Apple (AAPL) at $60. Recently it was as high as $86. Now, we all know Apple is a very successful company. Their computers (i-mac) and (i-pods) are awsome products. I am sure you all have one in your family. The stock however, fell from $86 to $60 in 2006. I said to myself this is way overdone. Now, it is trading at a reasonable price. I bought. (You may refer to my first note titled "welcome" to know what I had at what price)
Yesterday, three different major (I mean Major) brokerage houses lowered price target for Apple reasoning that Apple's business may slow down. Investors sold based on their reserch. When I heard the news, I too, did not wish to be with a company that will slow down. ( I trusted the Wall Street guys again). The stock went from $64 to $61. I sold at $62 for a small profit but disappointed that it did not reach my initial target at $72. (refer to my notes two days ago). Many others sold too (trading over 33 million shares!). Then today, suddenly news comes out that Apple will be able to run both Mac operating system as well as MS Windows system! The stock jumps at the news and closes today at a price of $67 per share!
OK, let's calm down. Let's think this through like an intelligent being. Let me ask you a question. Do you actually think the major Wall Street firms did not know that Apple will announce a big news like this 24 hours later? I mean these guys have dinners with the CEOs every other day! How can you get many shares at reasonable price? Make other people sell at cheaper price. So here is the logic, two possibilities are found: #1. These major brokerage firms actually did not know the news were coming and said business will slow and lower the target price for Apple one (1) day before the actual news. #2. They knew but they still lowered the business prospect for Apple anyway and lowered target price (basically asking people to sell).
Either way it does not look too good.
As I have said before, they have an agenda different than yours.
I knew this but I stil got burned again (well, in the form of lost opportunity anyway). Trust me, I will be more careful next time. I hope you will too.
In the end, the truth is that whether these major firms are right or wrong we need to listen. Because they have the ability to move the tide temporarily. There are enough people out there that will blindly do whatever these firms say. And that's a lot of money.
The only way to win this battle, is to have a longer vision. Not be swayed by daily news. Unless your initial plan was flawed, you stick to your guns. I should have stayed.
P.S: This is what's happenning to MATK. I will further advise you on this tomorrow.
PPS: MATK is currently my largest holding. (this is for long term guys). Good night.
posted by Jaewoo | 10:16 PM
2 Comments:
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