Joe Springer at Seeking Alpha, back in November:
So here is our logic to being patient. It is threefold:
- Apple had an enormous amount of call options speculation related to its Summer surge
- A huge share of this was calls with a strike of around the current price of $550 and higher that expire January 19 2013
- The institutional money managers that wrote those call options and bought common stock to cover will make a lot of money if a) those options expire worthless, and then b) Apple runs after that expiration date
I don’t understand the financial details in most of the article, but I do understand the central point: it looks like there’s a lot of money to be made by specifically keeping Apple’s share price low until a few days before the next earnings call.
(Via Loren Brichter. Disclosure, again: I own shares of Apple stock, and this is not investment advice.)
Most of my investments are managed — mutual funds, etc. — but I do have a relatively small investment account that I buy a few individual stocks with, mostly Apple when I think it’s cheap. (I bought some today.)
I’ve managed not to lose money, but I probably haven’t made enough to be worth the time and stress of managing these stock positions myself. I’m considering getting myself out of the individual-stock business. It’s more apparent over time that this is a huge game run by an oligarchy with infinite resources, little oversight, and no consequences, and I’m gambling blindly, hoping to piggyback coincidentally on a giant’s massive wins.
I can’t help but think that individuals like me are better off not playing the game, and that my actual work is more worthy of the attention I give those stocks.