Apple has been passed by Exxon Mobile as the world's most valuable company in terms of market capitalization.
Following Apple's earnings this week, shares have dropped sharply. That drop allowed Exxon to take the market capitalization crown.
The news isn't that surprising. Not that Apple is bad or anything---its profits are simply amazing. It's just that when analysts are tripping over themselves to give Apple a $1,000 stock target and a $1 trillion market cap it's time to bail.
As noted previously, Apple's market cap jinx was set last year when Piper Jaffray analyst Gene Munster gave the company a $1,000 price target. I said then:
Somehow it's unlikely that Apple CEO Tim Cook is sending Munster any thank you notes. After all, we've seen these wild market calls before. Dow Jones Industrial Average at 25,000? Sure why not? All those dot-com stocks justified to the stratosphere in 2000. Magazine covers proclaiming bear and bull markets. You know the drill. One huge call can signal the end.
Told ya. I'm no investing guru, but have been around long enough to see this Wall Street movie before. History rhymes.
Apple's decline will affect most people since it's in most indexes and mutual fund portfolios. In other words, you may own Apple and not even know it. Simply put, there were no investors left to hop on the Apple bandwagon. That reality may change given you could argue Apple is a bargain at some point.