The Era of AAPL is Over

By , November 15, 2012

I got a few comments from my “Tech Pair Trade of the Century” post awhile back along the lines of “Short AAPL? Good luck!” and “Long RIM? Good luck!”.

So it was with interest I noted this week (13F week, when all the “big boys” file their 13-F’s with the SEC) that two very large heavy hitters are calling it quits with AAPL:

Paul Tudor Jones widely credited with having called the 1987 crash, he is a hedge fund legend who likes to keep a low profile. If you ever find a bootleg copy of the “Trader” documentary that was made about him online, grab it fast because it’ll only be there for a few minutes before the takedown occurs. Jones filed a 13F revealing he’d gone down from 102,000 share of AAPL to just 9,000-ish.

David Einhorn, possibly better known for his short thesis trades and his book “Fooling All of the People Some of the Time” – (an absolutely great read which I highly recommend) also filed a 13F disclosing that Greenlight had jettisoned about a third of their AAPL over the previous quarter.

In summation, when everybody and their mother is in a stock, there isn’t a lot of upside potential anymore. I see long, well thought out rationalizations on why AAPL is “undervalued” why AAPL is just getting started – sure we all know Apple is a great company – but unless the next wave of shareholders come from Somalia or the Sudan where are all the new buyers going to come from? And the answer is: nowhere. Because anybody who is interested in owning AAPL is already in, if there are any laggards or doubters still to pull the trigger it is even more of a signal that a top has been reached, and most importantly:

The “smart money” is selling, lightening up and headed for the exits.

Oh, I almost forgot to mention, while stock movements over a month here and there are largely irrelevant, RIM is up a non-trivial 36% from my Sept 19 “pair trade” article while AAPL is down 22% in the same interval.


RIM: Long

AAPL: No position.

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