Every Apple (AAPL) bull should read ‘Lopsidedly bullish consensus on Apple’ by Mark Hulbert. Although Hulbert’s article is about bullish consensus on Apple, he hints at two more important points. First, sooner or later Apple stock will top. Second, Wall Street analysts are not likely to tell you that Apple stock has topped.
Hulbert is spot on.
Nobody rings a bell at the top. One of the most important principles underlying the ZYX Change Method is that no one knows with certainty what is going to happen next in the markets; this has come to be known by some as Nigam’s Second Law.
The only method that I have found to consistently work is to act in terms of probabilities.
When we were building a full position in Apple at an average price of $131, our algorithms were consistently showing a 90% plus probability of the stock doubling.
I have been a mega bull on Apple since recommending it. I was writing about $1000 target on Apple long before it was a popular investment. Now our algorithms assign only 60% probability of Apple reaching $1000.
The discipline of the ZYX Change Method has helped us not be carried away with enthusiasm generated by the momentum of Apple stock. We have been disciplined to take partial profits as the stock has gone higher.
As the stock crossed $700, Smart Money was selling Apple. In our parlance, Smart Money represents actions of ultra-sophisticated investors who know more, who know early, and who have more analysis power. According to our algorithms, Wednesday, Smart Money was a net seller of $767.12 million of Apple stock…Read more at MarketWatch
