>I'm quite sure that that's illegal, assuming that you're talking about a single investment house doing the upgrading and buying.<
1) I know that mutual fund managers have gotten into trouble over buying shares for their personal accounts before purchasing for the funds they manage. It's called "front running".
However, for a brokerage house to buy/sell shares for its clients *before* making a public disclosure of the up/downgrade would seem to be exactly what a investor is (over)paying them for.
One of the reasons they even make their recommendations public at all is a marketing imperative.
2) I once had the opportunity to read a Merrill Lynch analysis report of AAPL.
Five pages of single spaced numbers quantitatively detailing balance sheet, price to sales, earnings, etc. All backward looking stuff -- the sort of thing an intern would spend two weeks compiling.
*Zero* qualitative analysis about technology, management, brand loyalty, hardware/software product development.
3) The positive quarterly earnings are a *trailing indicator* of AAPL starting to get things right from a product/expense/marketing side.
4) I know that we're all traders at heart but step back and look at the company vis-a-vis other PC and software vendors. Look at AAPLs diversified products/pipeline and brand loyalty.
Look at the significant new product commitments AAPL just got from Oracle, MSFT, etc.
Try to come up with reasons wont/can't compete on at least even footing with other vendors. Because if it does, the upside to be gained from comparable price/sales valuations is monster.
soup |
