Apple, as hedge fund managers are well aware, is one stock that always bounces back
It's hard not to be cynical about Wall Street when you see a chart like the one at right, which traces Apple's (AAPL) share price over the past four weeks.
It not terribly surprising that the stock has shot up nearly 20% in the past two weeks to close at an all-time high Friday of $422. The iPhone 4S is selling briskly and the company is expected to report record earnings on Tuesday.
What's harder to rationalize is why it fell more than 16% in the two weeks before that to hit an intraday low of $354.24 -- the day the iPhone 4S was unveiled and the day before Steve Jobs died.
I'm reminded in times like these of Jason Schwarz's Apple: Seven Reasons Shorts Love It, first published in 2009. The meat of it can be boiled down to two sentences:
"If you can keep a good stock down then you are able to load up for the ride back up. It's like a slingshot -- the harder you pull, the more propulsion you generate."
You can read the full text of his thesis here. If you don't want to click through The Street's version -- posted in seven slow-loading gallery pages -- you can read, below the fold, the executive summary we published in 2009. Except for some of the pre-iPad details and the last point, about Steve Jobs, it rings as true today as it did two years ago.
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