Apple's paradox is as follows: Despite the fact that the company now, based on yesterday's results, appears to have record sales in most categories compared to last year, its stock continues its downward trend.
iPhone and iPad sales are better than any previous quarter, and the company has $137.1 billion in cash on hand. And yet, Apple stock falling. It's been plummeting since last September. Why?
See the infographic below from BusinessInsider that attempts to explain this fact.
Beyond the feeling that something is wrong with investors (something we have known for years in Greece since the lights have changed for us) we must understand that the prices of a stock do not necessarily reflect the course of a company, but the expectations that investors have of it. If they believe that the company will continue to produce innovation and the famous “Wow! Factor” that our American friends call it, the stock will rise. If they do not expect such a thing, the stock will plummet. Like Apple’s since September 2012.
Lessons in economics and investment neurosis. Good luck Tim Cook.
