posted on Jul, 25 2007 @ 07:55 PM
Here is a good reason why one should not listen to Financial Advisors in the newspapers:
Just a few days ago financial analyst Jim Cramer offered the advice to Sell off your Apple stock and perhaps Buy only after Apple released it's Third
Quarter report. He went on to say that in his opinion, Apple wouldn't have anything special to report.
Shortly after Mr. Cramer's item in the news, ATT announced that it had activated only 146,000 iPhones in the Third quarter, which was far less than
expected. Apple stock fell on this ATT report. Anyone who listened to Mr. Cramer would be selling stock while it was falling. Anyone who looked at the
ATT data alone, without understanding it's erroneous nature, would also be mistaken.
If you had listened to Mr. Cramer, and sold your stock as he suggested, you would be listening to a fool. Apple reported record breaking revenues with
net income up 73%. They sold 270,000 iPhones in the first 30 hours that they were available and Apple's growth rate was 2 1/2 times over Third
Quarter predictions. They also did great in iPod sales (31% growth over the quarter) and Notebook sales (up 42%), breaking all previous records. Steve
Jobs said "We're thrilled to report the highest June quarter revenue and profit in Apple's history, along with the highest quarterly Mac sales
ever" and expects to sell one million iPhones by the end of the 4th quarter. But you didn't need to read the report to see people lined up around
the block to buy the new iPhone and to know it was quite successful.
If you are going to invest in stocks it is always best to do your own research and never to listen solely to Financial predictions made by reporters.
If you had taken a closer look at Apples strengths and what was truly going on, you would have known better than to listen to Mr. Cramer. If you had
understood that ATT's iPhone activation data, reflected problems within ATT and their inability to function, you would have known that it was not an
accurate description of the number of phones sold. Further, if you look at the progress being made in Apples next OS, code named Leopard, you would
understand that good things are in the works and well on their way. That coupled with the knowledge that Apple has locked in deals for 25% of the
worlds Nand Flash memory, you would clearly see that now is not at all a good time to sell off Apple stock. Mr. Cramer's advice was 100% wrong.
This is just one stock out of many, and with every investment, only you are responsible for making an educated decision on when to Buy, when to Sell
and Why. If you fail to educate yourself, then you will reap the losses of folks like Jim Cramer, Financial Analyst.