Whilst I have previously questioned whether Apple is becoming like Microsoft, the parallels between Apple and Microsoft are now even clearer.
Like it or not both were founded and run by a genius, both became the giants of their eras, titans of the stock market and both had their moment of glory.
But both lost their key person, replaced by a great businessman but someone not capable of the huge achievements of the previous incumbent.
Microsoft’s moment was a decade ago. It stood as an unassailable monopolist astride IT technology. Since those glory days, nothing terrible has happened to Microsoft except that it has slowly but surely slipped back into the pack of normality.
Microsoft is just another massive U.S. corporation; there is nothing relatively outstanding about it in comparison with other companies of equivalent size or industry clout. It may be massive but it is humdrum.
Microsoft’s stock high was just south of $60 at the turn of 1999 and after the fall back to earth of the dotcom bust, it has churned between $20-$35 a share with only a few moments above $35.
Apple investors need to look at the Microsoft chart carefully because this is a highly likely future for their stock.
The Apple magic is draining away fast and like Microsoft, if the news flow is to be believed, Apple is beginning to sound more and more normal.
If Apple is to follow along the Microsoft path there is worse to come for the share price. There is plenty more volatility to come in any event and if history repeats itself this is highly likely to be in a bearish vein.
It will take a Jobs-style miracle to return Apple to the peaks but a long grinding future seems a much more likely outcome instead.
The $400 support line will be an important pivot point going forward and it will be a surprise if this level is not revisited soon.
If Apple breaks the recent previous low then a nasty fall is highly likely.
Even the firmest Apple fan now knows Apple needs a new miracle product if it is to escape the gravity of business normality. If that’s not coming soon, the Microsoft chart post dotcom will be a pretty solid route map for the road ahead.
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Clem Chambers is CEO of leading private investor’s Web site ADVFN.com, offering free real-time stock charts, date and in-depth news, and author of the Amazon bestsellers 101 Ways to Pick Stock Market Winners and A Beginner’s Guide to Value Investing. His new book, The Death of Wealth, is out now.
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