Proof

Ken — Thu, 24 Apr 2008 09:30:10 +0000

Remember this post, where I noted the recurring pattern of Apple's stock plunging after announcing first quarter results, only to have the stock completely over the course of the year? Remember when I said Wall Street investors must be idiots?

The day before the announcement, on January 22nd, Apple stock closed at $159.64. The day after, on January 23rd, Apple stock plunged to $139.07. The stock eventually hit a low just under $120 per share.

As of right now, Apple's stock price is $162.55.

Apple's second quarter earnings report indicated a remarkable rise in Mac sales. Though iPod sales were essentially flat compared to last year, I think the Mac sales number is more important; Apple will pick up a much larger "halo effect" as new Mac owners purchase more software, accessories, and upgrades.

Watch for the stock to rise considerably in the run-up to the rumored introduction of the 3G iPhone. And for those who are interested, a 3G iPhone has become a stronger possibility now that one of the two major obstacles has (according to the rumor mill) been resolved: Apple may have found a low-power chipset that will allow for 3G communication. I'm still not sure how they plan to address AT&T's poor 3G coverage; perhaps they'll still market the current iPhone for areas not covered by 3G, at a reduced price.