How Long Will Apple Shareholders Have To Endure This Humiliating Embarrassment?

Investors have felt tormented over the past few days as Apple shares have fallen nearly six per cent from a record high set on April 9.

Although that’s not a terrible decline, what’s weird is that Apple is actually under-performing the broader stock market.

As you can see from this chart of Apple vs. the S&P 500, this is a very rare occurrence. Apple has crushed the S&P for years.


Photo: Eric Platt/Business Insider, Data: Bloomberg

So the question is: When will Apple go back to beating the S&P?

Below we present a slightly unusual chart.

When the purple line is at 1 that means that Apple is equal to or setting a brand new all-time high against the S&P 500. As long as Apple beats the S&P 500 day in and day out, the line stays right at the top: At 1.

It’s when Apple underperforms the S&P 500, and drops below its relative all time high that the purple line dips.


Photo: Eric Platt/Business Insider, Data: Bloomberg

Since Apple started hitting new highs in early 2005, it took on average 8.52 trading days for the company’s shares to erase its dips.

But there were a number of times it took longer than that. Dips that began in 2005, 2007 and 2008 took 11.5, 4.5 and 9 months, before Apple fully recovered, respectively

Bottom line: Most of the time Apple recovers to new relative all-time highs very fast. But there were times when Apple investors had to wait nearly a year or at least several months before returning to their former relative glory.

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