Apple Inc. (AAPL) Bubble: Where Is It Headed?

Apple Inc. (NASDAQ:AAPL), once anticipated to touch $1000, has fallen from its September high of $705 to about $450 today. Investors are getting increasingly pessimistic about the stock, so much so that some traders have started betting the other way.

Many analysts still hope that the upcoming products like iWatch and the rumored iTV would reverse the current slump.

Apple Inc. (AAPL) Bubble: Where Is It Headed?

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But Clem Chambers, the chief executive officer of and author of A Beginner’s Guide To Value Investing said in a Forbes article that the most wonderful days of Apple Inc. (NASDAQ:AAPL) are over.

He says there is every reason to believe that Apple Inc. (NASDAQ:AAPL) is a bubble. It appears like a bubble, acts like a bubble and is now crumbling like a bubble. A bubble will sooner or later deflate to its normality, and Apple’s time is now.

Chambers said bonds are also bubbles that will burst in the near future.

“Bubbles have their reasons but the law of averages when combined with the law of large numbers means that bubbles go pop!” said Clem Chambers. He said Apple Inc. (NASDAQ:AAPL) bubble is likely to follow one of the previous bubbles: Microsoft Corporation (NASDAQ:MSFT), Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) or, Inc. (NASDAQ:AMZN).

Microsoft was a bubble during the Dot Com boom. Chambers think the Apple Inc. (NASDAQ:AAPL) bubble is most likely to trend like Microsoft Corporation (NASDAQ:MSFT), which would appear like this chart:

Apple As Microsoft

Though Apple Inc. (NASDAQ:AAPL) is falling, it still has a strong position in the market. So, the iPhone maker has the capabilities to stabilize itself the same way Microsoft Corporation (NASDAQ:MSFT) had stabilized.

Another scenario Apple Inc. (NASDAQ:AAPL) could follow, is that of the BlackBerry-maker, Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB). In that case, this is how the bubble will go bad.

Apple like BlackBerry, Inc. (NASDAQ:AMZN) was also a bubble during the Dot Com boom. However it didn’t start to reflate later until later. This is what the “Apple as a trillion dollar tech giant” analysts dream of. Even if Apple Inc. (NASDAQ:AAPL) somehow manages to make a comeback, it will take a long time.

Apple Like

The latest regulatory filings show that heavy decline in Apple Inc. (NASDAQ:AAPL) stock was driven by big hedge funds selling billions of dollar of Apple shares. But they still hold a position in the company.