You’ve got to hand it to DaBoyz for reviving Apple as a ‘wealth’-effect dynamo. The company couldn’t innovate its way out of a wet paper bag, and it doesn’t even have a horse in the AI race. And yet, the stock recently lurched back to life, emulating those two bull-market superstars, Microsoft and Nvidia. Indeed, any investor who held shares in the company last week, including Vanguard, BlackRock, Berkshire Hathaway and approximately 25,000 other lucky investors, became significantly wealthier on paper without lifting a finger. Rising sharply on gap openings last Wednesday and Thursday (see chart), and on a nasty short-squeeze Friday for good measure, the Cupertino-based seller of iPhones added nearly $500 billion to the world’s store of illusory wealth.
The Element of Surprise
As I’ve explained here before, almost no stock changes hands on gap openings, and what little actual buying occurs comes almost entirely from short covering. In this instance, AAPL ended last Tuesday’s session at around $203 per share. Then news came out after the close that they had sold quite a few more iPhones than benighted analysts had expected. It didn’t matter that the flurry of phone-buying could have been a one-time effect caused by consumers trying to get ahead of new tariffs.
All that was needed to goose AAPL skyward was the element of surprise. After the earnings beat, the stock’s clever handlers lost no time working their levitation scam. By simply pulling their offers overnight and on Wednesday’s opening, they enabled panicked bears to do all the lifting into a supply vacuum.
Rotation Is Costless
It’s easy to underestimate the crooks who ply this game. Although we know they routinely rotate money from one sector to the next to push stocks higher with relatively small outlays, we sometimes overlook that they can top that trick fiftyfold with a handful of megastocks that alone are capable of creating trillions of dollars of gaseous wealth in a trice. Using Apple shares that had been moribund for a year, they waited until the company’s tired story became sufficiently positive to trigger a massive short squeeze.
If this sounds like a perpetual motion machine capable of wafting stocks higher more or less indefinitely, we know the truth. For in fact, bear markets eventually do happen, invariably when everything looks sunniest.
