Market aphorisms inspired by Apple today by Jeffrey Cooper:
It’s not about the earnings. There is zero correlation between a stock's performance and its earnings in any one-year period. Over the long haul, yes, but not in any given year.
It’s about being over-owned and under-owned -- that quaint concept of supply and demand. That old familiar free market concept is what drives stock price: more buyers than sellers, more sellers than buyers.
A stock is either under accumulation or under distribution, or going sideways, having reached equilibrium.
This is the backbone of the perversity of Mr. Market, whose job at the end of the day is to hurt the most people. Mr. Market’s just doing his job, just like the Bear must ultimately do his job: the vast majority cannot side-step a bear market because it’s the job of the Bear to wring out the excesses and clean the slate.
At the bottom in 2009, the values present by several measures such as book value were not what they were at the bottoms in 1974 or 1982.
I think the likelihood is that this is going to happen. That means the odds are that there is a 3rd leg down in this apparent diamond pattern that began in 2000 -- a pattern that echoes what we saw in the 1970’s.
We should be near the false breakout top that occurred in January 1973 analogue, which was roughly 6 years from the Go-Go Top that occurred in 1966.
We are in the 6th year from the 2007 top.
One of the big bricks in the current wall of worry may be that the markets were able to shrug off its badge, Apple, and advance despite the rust and the red in the icon.