Below is an excerpt of a note published to our institutional clients earlier this morning. It provides insight into how we trade Apple stock.
We bought Apple (AAPL) at immediate-term TRADE oversold yesterday.
That doesn’t mean we love Apple (AAPL) long-term here (see chart). It just means what it means – we are at war with consensus and our quantitative process was signaling immediate-term exhaustion on the sell side of a stock that we risk manage like an ETF.
Before I get AAPL geniuses in a heat about that, here are the last 3 big signals our process has delivered:
1. June 1, 2012 at $571.86 = BUY
2. September 28, 2012 at $677.74 = SELL
3. December 17,2012 at $502.50 = BUY
No research. Just math, and some behavioral context.
How many people in our profession thought/think that it’s their own unique, non-inside info, qualitative research edge that made them “smart” being long AAPL? I don’t know. All I know is that a lot of hedge funds have gone away for doing the inside info thing, and a lot more research-only funds that don’t have a quantitative risk management overlay get mad at me.