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Nine bar charts: Apple versus Amazon versus Google

What's up, or should I say, what's down with Apple's stock price? I've been reading financial reports and listening in on earnings calls for years, and for a variety of companies. I am nothing more than an amateur when it comes to big finance. Under no circumstances are you to construe anything I say as financial advice. If I do offer financial advice, under no circumstances should you follow it. That said, I have been following this aspect of the industry for a very long time, and am confused by the gross undervaluing of Apple's stock price. The following chart illustrates why:

In every statistic I understand as meaningful, Apple destroys the competition. These numbers do not include intangibles such as Apple making the most sought after products in the world, making quarterly and annual record sales with no signs of stopping, and having the highest customer satisfaction rating for the last decade. Apples side businesses like iTunes, generates more profits than all of Amazon. Apple has more money in the bank than many nations generate in a year. There is no shortage of reasons why Apple's stock should be over $1,000, and none that i know, why it should be as low as it is. My only guesses are conspiracy theories, and I am not particularly fond of those.

Institutional investors make more money on stocks they control, than on stocks that go increasingly up, but that they cannot control. Professional investors make money when the stock goes up or down. It doesn't really matter to them. They just need to know when it will go up or down. The best way to predict the future is to create it. If they can artificially push the stock up, or beat it down, then they know exactly when it will happen. They can also control how much movement the stock has in any direction. These movements have nothing to do with the fundamentals of the stock. It is purely stock manipulation. 

Another theory is that analysts are manipulating the stock for emotional reasons. Over the years, Apple has made fools out of just about all of the major analysts just by continuing to not only survive, but be extremely successful. This was not foreseen by any of the fortune tellers. Every Apple success highlights just how little these analysts know about the subject matter on which they pontificate, and make their livings. Every one of Apple's successes: the iMac, iTunes, iPod, iPhone, and iPad were supposed to be epic failures. Apple's success always surprises the analysts. They never see it coming. They have been made fools by Apple. This is not so true with other companies. Just once, they would like Apple to fail so that they can be right.

Finally, Apple's competitors have never been more desperate, and are attacking Apple in the only way they can. Since they can't beat Apple at the cash register, and in the hearts and minds of paying customers, they attack them on Wall Street. They do this by purchasing fake reports from outlets such as Strategy Analytics. These companies write reports that influence the market based on the needs of their paying clients. When Samsung, Google, Amazon, and Microsoft need some good news about their flagging products or services, they get an analytics firm to spin some obscure data in their favor, and sound the death knell for Apple, in spite of record sales and record profits. 

Ultimately, I don't know the answer. I suspect it is some combination of all three. If you have a better idea, feel free to sound off in the comments.

David Johnson

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