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AAPL predictions.

April 10, 2013

My account executive thinks that I am not diversified enough. The reason is that 80% of my portfolio is in AAPL. So, when I do an analysis of Apple I better be right. Some of you that read my book The Psychology of Investing and concentrated on Apple like I did would certainly understand my utterly different analysis of AAPL from anything you have ever seen in the market. It’s a winner, but hard to follow because it is different. For example, To win, the ratio of median estimate of share price has to be higher within a range than the mean estimate. Or, a good CEO following a founding CEO is never good enough for your money. What I am going to share with you today is more of this unusual stuff:

If you trace the AAPL support-resistence graph over 2 years you will see 530, 590, 540, 550, 450, 480, 425, and 460 that show a slow decline or at best mild stagnation. The expectation is for a new product that will lift AAPL up and the counter expectation is that it isn’t coming because Steve is dead. If you look at the median-mean of 0.97 ratio of expectation, it simply says don’t buy before it climbs to 1.01. Sure, Apple still has a great future but it’s not now. All the upgrades are from 2012. If you look at the quarterly surprises, you’d see 22%, -10%, -1% and in 12-2012 it was 2.5%, a possible sign of recovery but I wait 2-3 quarters, not good enough as compared to the past performances of the company. And, finally, a PE of 10 is anemic and a PEG of 0.05 is sluggish, telling me wait till next year for a better chance to make money…and that, of course, depends of Samsung and others. The Steven Jobs era of not being concerned with what the other  competitors produce is over.

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