Whether you understand all this doesn't matter as much as knowing that this is the kind of thing that goes on with Apple's stock.
Another example of how big funds can control the AAPL stock. Last year Apple saw massive declines when four of the biggest hedge funds dumped billions of dollars of Apple stock. The share price plummeted and no doubt a number of investors panicked.
Why did these big investors pull out? They could have us believe that they had lost confidence in Apple. A conspiracy theorist could suggest that funds pushed billions of dollars into Apple in the Summer of 2012 and then pulled out months later when they had made sufficient short term gains.
You should always be aware that these big funds can rip money out of AAPL at any time. For example, on one Friday this January we saw what was described as a "premeditated unloading of some 800K shares (some $350 million worth) of AAPL in the last second, with the full knowledge it was shake the market."
Other suspicious AAPL activity on the NASDAQ earlier in January had coincided with the expiration of call options written last summer, and the Apple share price closed at exactly $500 that day. Coincidence?
How can you stay clear of being a victim of these big bullies? Mal Spooner's advice:
Avoid owning stocks that have become darlings. When it seems nothing at all can go wrong, it will, and when it does there's sure to be a swarming.If there's evidence of a growing short interest in a company, best not own the stock.Instruct your financial institution that your shares are not to be available for securities lending purposes.
Unfortunately Apple did become the stock market darling in 2012. Beware that while this may happen again, it isn't something you as an individual investor will have any control over.
Should I invest in Google?
We watch Google's share price with interest because to us it looks a lot like the story that played out with Apple last year is now happening with Google's shares.
Google is currently trading at $868.31. This time last year it was $588.23 (down from $641 a month earlier). GOOG has certainly been climbing steadily since AAPL began its decline. If Google is the current stock market darling, how long does it have until it has billions wiped of its market cap as fund managers swipe away their gains?
It is certainly the case that some funds have sold APPL and bought GOOG. For example, Tiger Global dumped 790,000 AAPL shares in the first quarter of 2013 and bought 300,000 Google shares, according to a Business Insider report.
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