Update on Apple's Share Price

The market is up big today. So is Apple stock.

Apple Shares Bounce Back With Vengeance has the update on today's trading in Apple:

"How about them Apple's?

Shares are jumping this afternoon amid a big, broad market rally as fears over the looming fiscal cliff have subsided, at least temporarily.

Shares recently rose 6% to $559, a monster move for the biggest U.S. company by stock-market value. Apple’s big weightings in the S&P 500 and Nasdaq Comp are also giving a lift to those indexes, which are up sharply and outperforming the blue-chip and Apple-less Dow Jones Industrial Average. . . .

The Apple surge piles on to Friday’s big mid-day reversal. At Friday’s intraday low, the stock touched $505.75. Since then, the stock has climbed more than 10%.

“The selloff in Apple’s stock over the past eight weeks has gotten to the point of being ‘insanely insane,’” says Brian White, an analyst at Topeka Capital Markets. Apple shares had fallen about 25% in less than two months prior to Monday’s trading session.

White — the biggest Apple bull on Wall Street — holds an $1,111 price target on Apple shares. His bullish reasoning: “The depressed valuation, new blockbuster products for the holiday season, the attractive long-term growth opportunities that lie ahead and the company’s ability to distribute significant cash flow to investors.”

 Demand that fell short of expectations for the new iPhone combined with worries about the iPad Mini pricing, recent management changes and growing competition from the likes of Google Inc. and Microsoft Corp. have weighed on the shares.

And, of course, concerns surrounding the fiscal cliff have also taken a bite out of Apple shares.

Worries over the treatment of dividends and capital gains and what happens with these tax rates could have implications on Apple, which instituted a dividend earlier this year.

But now, all those worries seem to be waning. In this week’s cover story, Barron’s touted how the stock could hit $800. From the many options Apple has for rewarding shareholders through dividends and buybacks, to its cheap valuation, the stock looks attractive even when the company’s rabid growth rate starts to slow, Barron’s says.

“Those investors that have missed Apple or have been under-weight the stock, now have another opportunity to buy Apple before sentiment takes a turn for the positive during what has historically been the strongest quarter of the year for the stock,” White says.

WSJ Market Data Group

Apple’s top 10 biggest one-day gains this year

SUMMING UP

Off to the races or a short term interruption in Apple's and the overall market's recent price decline? 

Nobody knows the answer to that, of course, and that's exactly why a long term stance is the only realistic approach for individual investors. 

That way there's no need to outsmart or outguess the trading "experts."

Thinking like an owner and not like a trader is the best way for individual investors to proceed.

So don't buy anything until the price is in range.  But determine what that range of reasonableness price is in advance of when the share price actually reaches that target, and then just sit back and wait to hit the right "pitch" from Mr. Market.

It's that easy.

Thanks. Bob.