Jim Cramer: Why Did Apple Disappoint?
This article originally appeared on Jan. 28, 2014, on RealMoney.com. To read more content like this plus see inside Jim Cramer's multimillion-dollar portfolio for FREE... Click Here NOW.
I have always marveled about how the stock market has so little memory from day-to-day. Take Google
Where did those sellers go? What happened to them? What were they thinking?
There's an answer to that: They weren't thinking anything. They were reacting or they were looking at the chart and the chart broke down. This is one of the reasons why we spend so much time on Tuesdays analyzing the charts. You caught a swing of 30 points if you took advantage of that naked emotionalism. Now, maybe, you don't trust the market. Well, then tomorrow's the day you want to sell Google. Tomorrow's the smart day. Yesterday's the dumb day.
Or let's take Netflix
On Monday, we got lucky. But did you do it? Where the heck have all of those sellers gone? Did they think something had changed at Netflix? Were they afraid of giving up the gain? Or did they just buy high, not know why they bought it and then kick it out? Buying on weakness, buying on a pullback, that's how big money is made.
Now let's go to Amazon
The pullback comes and what happens? People freak out. These are precisely the kinds of issues I spend 100 pages on in Get Rich Carefully, how to use the pull of the S&P 500 futures and the panic of others. Use their pain to start a position or buy more of a stock you just couldn't get into before. They let you in and you are scared to get in. They open the door and you think that there's something wrong when the door swings open. These are all market related sales that are not based on anything happening to the companies.
Of course, if you think the whole market is high, then so what? I am just spewing authentic Wall Street gibberish: pullbacks, correction, opportunity, blah blah blah. But if you want to get into a stock at a lower price than it was because you think that there has been good news or there is good news ahead and the stock doesn't reflect it, you buy, not sell. You take advantage of that fear and you use it to your own advantage.
All of this brings me to Apple
So whose fault is that? Is it Apple's for not inventing a new category of goods? Is it the analysts for expecting too much? Is it the individual investor who listened when Carl Icahn said the stock was a no-brainer -- and then got brained? Is it the big momentum investors who expected so much from the company?
Now here's a situation worth sinking your teeth into. This is the narrative: Last quarter Apple set out some sales objectives and ranges on its conference call.