chinacat
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AAPL Long since 2006
Posts: 4,429
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Post by chinacat on Dec 4, 2021 7:48:04 GMT -8
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4aapl
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Post by 4aapl on Dec 4, 2021 9:25:24 GMT -8
Rereading "Predictably Irrational" gets me thinking about a lot of things with human psychology. Two for AAPL are ownership vs non ownership valuation (why an owner might value something drastically more than a non-owner, though the problem in their basketball ticket experiment was that the ticket owners didn't want to sell, so that artificially inflated the bid/ask spread), and anchoring a price. A week ago, AAPL's ATH was $165, so someone not in a huge rush to sell but maybe looking to offload a little would use that as a baseline. Maybe they'd want to sell at that number. Or maybe a few bucks less or a few bucks more. Or maybe, thinking more like a year out, they are looking for some percentage higher than that, like 15-50%. Now suddenly, without really much change in information that we have about Apple, though one could probably imply that holiday sales are doing fairly well, we have a new ATH, and thus a new baseline, or anchor price. Extrapolating from that, a surge in interest could raise the baseline, at least for the short and mid term. If a group came it, and bought up stock or options which brought the price up, even if they exited the positions a higher price could stick as a new higher baseline is set. It's long term where that comes apart, since with very large downturns it can all reset. Anchoring works there too, but hopefully the realization that Apple is a much different company than when it's P/E bottomed out below 10 helps with that, especially if Apple can stay profitable even during a recession. Interesting times. I suppose it's always hard to know with much certainty how far from a top we are. Both 2000 and 2008 were frothy bubbly tops where one could see the excitement in the media or just the everyday Joe. It doesn't seem like the market is acting like that yet, at least to the extremes in those cases. But just because those were the examples in the last 25 years doesn't mean that the next time has to match up with them. 2020's pandemic dip put some caution back into the market, but didn't kill the run entirely. Caution will be warranted at some point. Maybe it is needed now? It seems likely that it will be more needed sometime in the mid-term, 3-12 months out. We'll see. In past times, especially in 2000, AAPL lead the market down. As a much different company, maybe it will be different next time, especially if a market drop is earnings/recession based (where Apple's strong balance sheet should help) instead of big event based (pandemic, war, etc).
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chinacat
Moderator
AAPL Long since 2006
Posts: 4,429
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Post by chinacat on Dec 4, 2021 11:24:39 GMT -8
Thanks to those who noticed my mistake on the weekly close price; was in a rush and forgot to refresh the page. Apologies to all.
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chinacat
Moderator
AAPL Long since 2006
Posts: 4,429
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Post by chinacat on Dec 5, 2021 7:51:07 GMT -8
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Post by firestorm on Dec 5, 2021 15:34:52 GMT -8
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