Mood Swings

AAPL is down 17% YTD, in sharp contrast to its large tech rivals and the NASDAQ, up over 20%.

Expectations for Apple had fallen so low that Tuesday's announcement of a drop in quarterly income that was smaller than expected was widely regarded as positive. Every day there are numerous articles from every conceivable viewpoint--from Apple stock is dead money to buy now because the stock has bottomed.

Like most chastened bulls, your humble Apple shareholder now thinks that last September's all-time high of $705 won't be attained any time soon, if ever. The dividend of $12.20, however, represents a yield of 2.7%--better than a bank account--at the current share price, and the $60 billion share buyback program provides an underpinning for future earnings per share, as at least 100 million shares out of nearly 1 billion will be retired. In other words the downside is low, and the 38% drop from the all-time high seems to have chased out the hot-money speculators.

As for potential upside, new products have been disappointing since Steve Jobs left the scene. But it's not likely that the entire $3 billion in annual R&D expense has been wasted; Apple's pipeline is bound to produce some products that will excite some people.

One thing is certain: investors in Apple must be able to handle mood swings. © 2013 Stephen Yuen