11/9/12

Is Apple a lemon?


Here we present a formal model for Apple, AAPL, share price as based on the consumer price index for motor vehicle parts, MVP, and motor vehicle maintenance and repair, MVR:
 
AAPL(t)= 24.31MVP(t-6) – 30.02MVR(t-1) + 169.67(t-2000) + 2618.28  

Figure 1 shows that the predicted (monthly closing) price is much higher than the observed one during the previous two months when the price fell to $592 (end of October)  from $665. The closing price for November 8 is $537.75.  

This model is worthless with the current slump. Is Apple a lemon? This means it is judged emotionally rather than objectively.
 


Figure 1. The observed and predicted price of Apple share.

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