I decided to make this post a little different. I’ve been on vacation for about a month now and it feels weird not learning new things anymore so I’ve decided to do my own learning through some market research and analysis.
I know there have been a lot of articles about this but I figured I could give my own take on it as a start to these types of posts. I made this observation a couple months ago when doing research for a class but I never really got to go in depth with it since it wasn’t the topic of my research but now I can. The question is, Why does the price of Apple stocks decrease whenever they have an announcement of new products or an announcement of an announcement?
My theory is that consumers are somewhat satisfied with what they have, some of it not being a year old yet, and are unsure of what it could be that could improve what they already have. Sort of like fear of the unknown. It’s only after the announcements or media event has finished that the stock recovers from the anticipation of consumers. Another questions is what happens to Apple’s competitors, such as Microsoft, when their stocks have fluctuations? In theory there should also be fluctuations since they are direct competitors and it could mean that if investors are selling Apple they are putting their money somewhere else, like Microsoft. So here’s the proof. All my charts are from yahoo finance and I just cross referenced the dates of the media events from Wikipedia.
Ok so Apple had a media event on June 10th to the 14th in 2013 where they showed the redesign of the Mac Pro, the AirPort Time Capsule and the AirPort Extreme and the updated MacBook Air. They also showed the operating system Mavericks, IOS7, and some other stuff including iTunes Radio. Big stuff. But as you can see in the chart, the stock price went down the day of the beginning of the event. Maybe people weren’t so sure that they needed all these changes.
Their next event was on September 10 of that year.
This time the stock price started to dip from the 2nd of September. Not a good sign. If the dip in stock price was happening just over a week before the event investors and consumers were clearly not that happy in the direction Apple was heading. The anticipation was not high for the new products and the speculation and doubt took over. This continues for a couple more of their media events and I think they’ve come to expect it but as you see they’ve always recovered from it. In my opinion right before an announcement or media event would be the best time for an investor to buy some Apple shares. In some cases the dip in stock price starts days before and sometimes it only starts the day of, once the event starts. Regardless, there’s always a rally afterwards which means some quick returns for those who invest at the right time. Now it can be said that its is momentum pushing the stock price of Apple up. There are little dips here and there but there is a clear upward trend. That but increase in stock price at the beginning of 2015 may be attributed to anticipation of the iPhone 6 that was announced in September 2014 or just simply Christmas rush.
So what about Microsoft?
Contradicting theory, Microsoft also had a dip in stock price in June 2013. This could mean that investors were just not comfortable investing in Apple at the time and left those funds in cash and didn’t reinvest or they just invested in something else.
Their movements for the September event were more text book.
In September 2013 they had a somewhat large boost following the Apple announcement. This was the announcement where Apple introduced the iPhone 5c and 5s (Some may call them the 5Cheap and the 5Same). Investors were clearly not happy with this announcement and decided to invest in something else. Microsoft.
There could be other reasons for the shifts in Microsoft’s stock price but seeing as Microsoft doesn’t have those large media events that Apple does I’m assuming the events are related. Another option is to look at E3 events to see if they affect the shift in Microsoft’s stock price since the XBox is a large division for Microsoft. And with the release of Windows 10 last week then that would also affect Microsoft’s stock prices. There are endless possibilities.
So yea. That’s about it. I’ll probably do a couple of these just to stay on top of things so I don’t lose everything I learnt in my Masters.