It's been a long time coming. Today thousands of first time and novice investors learned that buying shares in AAPL is not the same as having their money in a magical bank account that growns 10% every month.
By Jonathan Cheng and Steven Russolillo
Apple’s stock slide is starting to get ugly.
Shares tumbled $25.10, or 4.2%, to $580.13 on Monday, the fifth straigh day of declines. The stock has tumbled 8.8% since last Monday’s close, the longest skid since October.
The recent move is the first true stumbling block amid Apple’s meteoric rise in recent months. The stock is still up 43% this year and last week Apple’s market value briefly surpassed $600 billion, further cementing its status as the world’s most valuable company.
As Apple shares have hit some turbulence, a slew of shareholders have weighed in on the recent action:
George Young, a partner at Villere & Co, and an Apple shareholder since late October, said he’s not considering selling his Apple holdings.
“We haven’t changed anything with regards to Apple,” said Young, who’s firm has about $1.5 billion in assets under management. “We think the thesis is still intact. This is still a cheap stock. And it’s getting cheaper.”
Mr. Young said he would contemplate unloading a portion of his Apple holdings if the stock were to zoom up to $700. That level would push the valuation too high and prompt the stock to get too expensive for his liking, he said.
Conversely, if the stock were to keep dropping from current levels, he said he likely wouldn’t sell. “If a stock gets cheaper and the story stays the same, we believe we should buy more,” he said. “Nothing goes up forever. This is normal. There are supposed to be blips here and there.
Todd Morgan, senior managing director at Bel Air Investment Advisors LLC, which manages $6 billion in assets in Los Angeles: “I’m always worried when Apple pulls back, but we have all we want for the time being. I’m just hoping there’s nothing wrong that I don’t know about, but we’re long-term investors and we remain constructive on the stock. It bothers me when the broader market is up and that stock is down, but it’s got company — Google and Priceline.com are also down.”
“The Dow is up [about] 100 points, and S&P 500 is probably being pulled down by Google and Apple. We haven’t seen that kind of divergence in a long time,” he said. “We have enough,” he said.
Keith Springer, president of Springer Financial Advisors: “This is just a selloff before the rally that will come with the earnings report. Apple is just pulling back under the weight of itself. The stock just got ahead of itself.” “This is probably a good point for anyone who wants to buy Apple,” Mr. Springer said, though he added that he wouldn’t be actively buying unless it fell a bit more. “I’ve already got what I need,” he said, adding that he still has Apple shares he bought a few years ago when the stock was trading around $80 a share. “I invest for need, not for greed.”
Even so, he added: “I’m not worried at all. When a stock moves like this, it’s just a natural correction.”
Randy Bateman, chief investment officer and portfolio manager at Huntington Asset Advisors: “Apple has really driven a lot of the markets here, but we think this market is going to be facing some headwinds, with profit margins at an all-time high. Margins may revert to the mean, and that’s going to put some pressure on earnings. Any companies with any kind of disappointment are going to be dealt with harshly.”
“We feel it’s just about the only tech stock that has viable, intriguing products that the mass consumer wants, and if you look at it and the plight of Nokia, you can see a big difference.”
Though he says he remains bullish on Apple’s prospects as a company, Mr. Bateman says his firm has no plans to add to its position. “We’re satisfied with the position that we have right now,” he said. “We look at maximum exposures, and with the headwinds in the marketplace, we’re going to try to limit our exposure to stocks with the greatest volatility. You don’t want to get overburdened with those types of names in a market that is tenuous.”
Susan McNeice, an investor who owns Apple and trades from her home in northern Virginia: “I’m not worried about it at all. I’ve done the reading, and I agree with what the pundits say: the facts would seem to bear out what they say, which is that it’s underpriced. Recently, the performance has been spectacular, so I can’t argue with that.”
“I try to not let myself get too whipsawed by the daily variations, but I’m as nervous as any other person is. But ultimately, I have faith in Apple because of its corporate strength and its relationship with consumers.”
“This just seems like a regular correction to me. If you look around, there’s been some softness in the market overall, and when you ask, Has Apple done something colossally stupid? The answer is no. Has some competitor come along to change Apple’s prospects? No. They haven’t done anything to make me lose confidence, but the facts don’t support a panic.”