Apple: Here's Why the Stock Will Go On an Epic Run
If you own Apple (AAPL) , it's no sin to have sold somewhere along this recent plunge line, particularly if you were sitting on massive unrealized profits.
Never a bad idea to take profits.
At the same time, if you own AAPL, it ain't no sin to be glad you're alive.
While doubling down, as a general strategy, can blow up a portfolio, it's a risk I would be willing to take with AAPL right now. I'm not sure I have ever seen a stock more "certain" (because nothing in life is ever certain, particularly on Wall Street) to make a more historic run in my lifetime.
TheStreet contributor Jason Schwarz wrote an excellent article -- Apple Slingshot: Making Sense of the Apparently Irrational -- detailing the real reasons why the stock has tanked: Institutional selling as funds rebalance portfolios (bring AAPL allocations into more reasonable ranges) and the attendant year-end, capital gains tax-hike profit taking.
Schwarz downplays the impact of recent noise -- everything from "MappleGate" to iPhone 5 supply constraint rumors to Steve Jobs's absence -- on the stock's steep fall.
While I agree with Schwarz, this negativity certainly doesn't help. Plus, it could spook retail investors from taking advantage of the weakness. One size doesn't fit all, but, at these levels and at this point, the downside presents a life-size buying opportunity in AAPL.
As the noise works itself out, I expect another parabolic run between now the end of January when Apple reports holiday quarter results.