<<First, the fact that the major brokers have managed to screw up 3 qtrs should give you pause that they will manage to screw up another qtr. When a pattern this simple develops - when making money in a stock becomes this routine it's wise to become quite paranoid. Simple patterns don't normally exist for any length of time.>>
Pattern is there, of course, and patterns of error don't last forever. Eventually analysts will catch up to AAPL and start forecasting earnings correctly. Will that happen this quarter? I see no reason to believe in a miraculous recovery of AAPL analysts' reasoning skills. I suspect we'll see a smaller margin of error than previous quarters, but like I said in a previous post, even .67 earnings is a smaller % error than Q1, Q2, or Q3.
Now, comes in the issue of making money on this error. The market, of course, does eventually notice this kind of trend and will attempt to take advantage of that. However, that just changes the time in which people buy into AAPL, not whether they will. A surprise widely known by the public ahead of time will produce a run-up in the stock prior to announcement and then a sell-off after. It's the old buy the rumor, sell the news. I believe we have yet to see that run-up.
Andrew |
