So can any of us put a finger on the source of (apparent) irrationality in the market's treatment of stock prices lately, and predict how it will affect AAPL?
One piece of the puzzle, I think, is Asian exposure. There's a ton of money entering the market all the time, from 401(k)s and IRAs etc, and it has to go somewhere. That money is going into stocks with little Asian exposure, even if it means insane valuations, because Asia is seen as the only thing that can lead to a market crash. This largely explains the rise in Internet stocks like YHOO and AMZN, and pseudo-Internet ones like AOL.
In your example, Intel and Microsoft behaved normally because they both have Asian exposure, while Adobe and Bay have little, so they behaved in an apparently irrational way.
Apple, of course, does have Asian exposure. Something like 15-25% of its revenue comes from there. So, in my view, a lot will depend on how well its Asian sales did this Q, because worried investors need to be reassured on that point. If Asian revenues are above expectations, or if Asia hangs in there and the EPS as a whole clobbers projections, Apple has to go up.
rhet0ric |
