Millions saw the Apple Fall, but only Newton asked Why?

jayc
2021-10-24

Typically, a beat in earnings will drive a stock price up after the market opens. But realistically, it's not uncommon to see a stock's price fall after beating earnings.

An interesting case to study is the brilliant Q2 and Q3 (2021) earnings results from $Apple(AAPL)$. The superb earnings were not as well-received by investors. Despite the strong quarterly results $Apple(AAPL)$.

If you are an $Apple(AAPL)$investor who wondered after a remarkable Q2 and Q3 earnings report, why the value of your stock was going down rather than up...

The possible reasons:

1. Warning that chip supply constraints could impact iPhones and iPads will weigh on the short-term outlook.

2. Earnings may not seem good enough for an investor looking at every short-term opportunity to move funds to where the next quick buck is likely to be.

3. Earnings were not as high as anticipated.

4. Speculators already drove up the price in the days before the earnings report and then sold just before the report was released

5. Stock markets are not always rational.

Long-term investors, shouldn't be too worried at all. Apple's core businesses remain strong, it's brand inspires fierce loyalty, and it has plenty of cash to fund its future expansion plans beyond the iPhones and iPads.

Surprisingly enough, share prices do dip after robust earnings release. Sometimes the expectation of beating earnings is already priced into the stock. The expectations of beating earnings was already "baked in". If you look deeper, there might be some negative news that trumps the earnings beat. Or perhaps, the whole market dropped and the company was taken down with it.

There is no rule that the stock must immediately reflect the optimism or pessimism of quarterly results in the price. Fundamentals like profits, sales and everything else align with price only in the long term. In the short term, nothing is predictable or rational.

A strategy you might consider, if this is happening too consistently. To sell those stocks prior to the earnings release, then re-invest the principal and gains back into the market. You can usually find a way to hold cash in the stock market for a short period of time, if you invest through a fund.

Honestly, in the long run, these quarterly results don't matter too much. The long-term success of the company is not determined by short-term graphs and charts.

免责声明:上述内容仅代表发帖人个人观点,不构成本平台的任何投资建议。

精彩评论

  • 邵军
    2021-10-27
    邵军
    我以为苹果手机倒了
  • 一路biao升
    2021-10-27
    一路biao升
    谢谢分享!
  • kaisx
    2021-10-27
    kaisx
    Help. Like please tq
  • Kabanotolog
    2021-10-27
    Kabanotolog
    Apple рулит
  • huxibob
    2021-10-27
    huxibob
    哈哈,大神和平民的区别
  • nonewiser
    2021-10-28
    nonewiser
    Time to stock up
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