January 24th, 2010


(no subject)

My grant of stock options from joining Apple expires in mid-February, so I need to exercise them in the next few weeks.

I do not think that I am able to pick the best day to exercise these options. However, it's hard to feel that it doesn't matter, because the value of these options has varied by almost 10% in the past week. So I feel compelled to try.

It's particularly challenging because this upcoming week promises to be an extra-volatile week for AAPL:

On Monday comes Apple's earnings report for the holiday quarter. I have every expectation that Apple will beat the guidance it gave for the quarter; Apple gives extremely conservative estimates, because it knows that the stock price gets hammered if it doesn't meet its estimates. But of course, Wall Street knows this too, and constructs its own estimates of Apple's performance.
Furthermore, Apple has substantially outperformed Wall Street's estimates for the last several quarters. But analysts may well have come to expect that.
All this means that the number Apple has to hit to avoid dropping the stock price will certainly be higher than Apple's guidance, and may be even higher than Wall Street's estimates. It's going to be hard for me to guess which way the stock price will move.

Then, on Wednesday, Apple is having a press event at which it's expected to announce a tablet computer. This is similar to the earnings report: there's a whole lot of built-up expectation--so much expectation that the stock price went up $7 just on the rumor that Apple might have rented announcement space.
- If Apple does not announce a tablet computer, its stock price will probably drop like a rock.
- If it does announce a tablet, a whole lot depends upon whether it lives up to the high expectations. It might be that Apple announces a great tablet, but the stock price drops because it still relies on fingers for input instead of a direct neural link.

So I expect it to be a very volatile week. And despite knowing that I cannot pick the right time to sell, I care a lot about the oscillations of the stock price, because I'm trying to pick the right time.

(It's not at all unreasonable to regard this angst of mine with scorn. May we all be so fortunate as to have such problems.)