Lately, the correlation between AAPL stock run-ups and actual news regarding Apple is zero. Whereas most of the time there is any actual news, even news that to me seems good for Apple, the stock goes down.
Which is something that I’ve been noticing for a while, and not just with Apple. It seems like the stock market responds to just about any news by punishing the company involved. Did you quarterly results meet analysts predictions? The stock goes down. Did it beat them by too much? The stock goes down. That’s just strange.
But what’s downright dumb is when nothing happens and the stock rises. How is that possible. So here’s my theory: good news does make stock prices go up. But not when most traders first hear about it. To them, anything in the press is bad, so anytime they read about a company, the stock goes down. But a week later when they talk to somebody smart enough to know what’s going on, the price starts creeping up.
The reason for the sudden dip is that there’s a small but significant number of day traders that are nothing but reactionary lemmings. On the other hand, there are lots of smart people out there who slowly begin to fill in the larger mass of traders in on the good news. The thing is that the lemmings all hear about the news at the same time, but the word of mouth filters out slowly over a few weeks.
What do you think?