AAPL: Buying the Dips!

[Took2Summit]

Quote from cactiman:

Not been a fun 4 weeks, but as long as AAPL stays above 600, or even above 567.56, the chart is still good.
This will become just another pullback in AAPL's multi-year Uptrend.

To keep things in perspective:
From the high of 705.07 to today's low of 609.84 = -13.54%.
AAPL's last pullback from 641.25 to 519.95 was -18.92%.
And then there was a rally from 519.95 to 705.07 (+35.60%)!

even so, why have you tried numberous times now to catch a falling knife? aapl is in obvious downtrend atm. wait until it reverses? why ride the way down with the thesis that it will eventually go back up. seems like a very emotional trade to me.

you could have also said very similar stats for something like say csco when it hit 80. then it hit 60 and people were probably saying exactly what you just said. oh but last time it went down 18% it eventually grew 35%!! yes, until it doesn't anymore. now 10 years later csco is sitting at $18 and you probably still have people emotionally attached.

 

[cdcaveman]

Quote from Took2Summit:

even so, why have you tried numberous times now to catch a falling knife? aapl is in obvious downtrend atm. wait until it reverses? why ride the way down with the thesis that it will eventually go back up. seems like a very emotional trade to me.

you could have also said very similar stats for something like say csco when it hit 80. then it hit 60 and people were probably saying exactly what you just said. oh but last time it went down 18% it eventually grew 35%!! yes, until it doesn't anymore. now 10 years later csco is sitting at $18 and you probably still have people emotionally attached.

+1 apple will one day be a dog....... still believing its not done but I have nothing in it right now

 

[cactiman]

Quote from Took2Summit:

even so, why have you tried numberous times now to catch a falling knife? aapl is in obvious downtrend atm. wait until it reverses? why ride the way down with the thesis that it will eventually go back up. seems like a very emotional trade to me.

you could have also said very similar stats for something like say csco when it hit 80. then it hit 60 and people were probably saying exactly what you just said. oh but last time it went down 18% it eventually grew 35%!! yes, until it doesn't anymore. now 10 years later csco is sitting at $18 and you probably still have people emotionally attached.

"Catching a falling knife" refers more to going long at lower and lower prices during a Bear Market/Long Term Downtrend - like 2000-2003.

I don't think AAPL is in a Long Term Downtrend.
It's in a lower left to upper right Long Term Uptrend, with various % moves up, down, and sideways along the way.

The "thesis it will eventually go back up" is based on its behavior over the last 8 years.
Isn't making trading decisions based on an analysis of a stock's past behavior the exact opposite of emotional trading?

 

[Daring]

Looks lower still and earnings are very close.

A serious concern, how does Apple keep this growth with no real new products?

New versions of old stuff in my opinion is not exactly new product, as they are saturating markets with their new version per year cycle.

However, below 580 is good support, time will tell if this behemoth is ready to die or not.

 

[Ash1972]

The "thesis it will eventually go back up" is based on its behavior over the last 8 years.
Isn't making trading decisions based on an analysis of a stock's past behavior the exact opposite of emotional trading?

Sorry, but this is pure BS.

You seem to be saying that observing a single stock's market price over an 8 year period - during which it was in a bull market - is some sort of back test.

In fact the belief that something that has been going up in the recent past will <i>continue</i> to go up is called recency bias, and is the key reason why most retail investors fail.

 

[cactiman]

Quote from Ash1972:

Sorry, but this is pure BS.

You seem to be saying that observing a single stock's market price over an 8 year period - during which it was in a bull market - is some sort of back test.

In fact the belief that something that has been going up in the recent past will <i>continue</i> to go up is called recency bias, and is the key reason why most retail investors fail.

I thought it was called Trend Trading.
The Long Term Trend is up, so the odds favor it continuing to go up.
Buying pullbacks in uptrends is not a new thing. What's the big deal?
I thought it was standard procedure.

I also think noting an uptrend's Higher Highs and Higher Lows, and measuring the % moves of the pullbacks and rallies is a valid form of analysis. Again, nothing new.

My whole point with this thread was to show how buying dips "feels bad" when you're doing it, but it has worked for the last 3 years shown on the chart.
And IF you had kept your "Faith in the Trend", put up with all those fears and doubts during the pullbacks, and bought in near all those higher lows, you'd have done quite well.

 

[ammo]

corporations plan 6 months out,the market projects 6 months forward, where do you think aapl and the market will be in may,that's using the past and present data to bet on the future

 

[cactiman]

Quote from ammo:

corporations plan 6 months out,the market projects 6 months forward, where do you think aapl and the market will be in may,that's using the past and present data to bet on the future

Since late September I've been selling AAPL 700/695 January, February, and April Bull Put Spreads.
So my bets are for 700 or higher on the 3rd Friday of each of those months.
Also have loss control/escape plans in place, in case things go wrong.
We'll see what Mr. Market decides....

 

[ammo]

i think today he is saying 6 months out aapl is worth 600-615,you have limited your risk ,good thing, but what do you base your forecasting method on

 

[cactiman]

Quote from ammo:

i think today he is saying 6 months out aapl is worth 600-615,you have limited your risk ,good thing, but what do you base your forecasting method on

So you're saying Friday's closing price is a prediction of AAPL's "worth" in May 2013?
If so, I don't agree with your theory.

AAPL's Friday closing price/worth to me is the homogenized combination of all fundamental, technical, and emotional beliefs/theories of all traders/investors at 4pm Eastern Time on October 19th, 2012.
Nothing more/nothing less.


I base my "forecasting"/"bets" on 2 assumptions:
1. The Uptrend is still in place until a Higher Low is taken out during a retracement.
2. All the % moves (i.e. Rallies to Higher Highs and Pullbacks to Higher Lows) in a stock's Uptrend (over the last 3 years on its weekly chart) will continue in a similar fashion.

I find that works "most of the time" for my 3-9 month trades.