- Apple (AAPL) - Get Free Report stock had a rough 2022, as the share price nosedived 27% before dipping even further at the start of the new year.
- Today, I look at seven fun facts (some of them not as fun for shareholders) about AAPL in the year that has just ended.
- Fun fact #2 is key: could past share price performance provide an indication of what may happen to Apple stock in 2023?
(Read more from the Apple Maven: Beyond AAPL: What 3 Other Stocks I Would Own In 2023)
#1. Apple Stock’s Historic Dive
For nearly the entire 21st century, AAPL has been a winner. The chart below shows that, out of the past 22 years (2001-2022), Apple stock has produced positive annual returns 17 times.
Last year, however, was an exception. Not only did Apple produce a loss, it was also its third worst return of the century. Only 2002 (the thick of the dot-com meltdown) and 2008 (Great Financial Crisis) were more bearish for the stock.
#2. Bad Can Be A Good Sign
Looking back over the past 12 months, AAPL investors don’t have much else to do but lick their wounds. Looking forward, however, the stock’s pitiful results of 2022 could actually be a good omen for what’s to come next, in 2023.
As I have written recently, Apple stock tends to perform better than usual right after a bad year of returns. Here are the numbers to keep in mind:
- Median annual returns since Apple’s 1980 IPO has been 24.5%.
- But following a down year, the median return for the following 12-month period has been 35.1% – more than 10 percentage points better than usual.
- The only time in history when investors would have been hurt by doubling down on AAPL after a double-digit annual loss was in the 1996-1997 period. But keep in mind that circumstances were vastly different then: Apple was on the verge of bankruptcy.
#3. AAPL: No More Volatile Than Usual
Stocks tend to be “jitery” (or more volatile, statistically speaking) when they are facing a correction or a bear market. Since Apple performed so poorly in 2022, one would reasonably expected share price to have been highly volatile compared to the historical average.
That was not quite the case, however. Annualized volatility of the daily returns was 35.7% in 2022. This number compares favorably to:
- The annual average of 36.7% since the year 2000
- The annual average of 43.1% since the 1980 IPO
Important note: if we compare 2022 to the past 10 years only, or to virtually any shorter period of time, then volatility was, indeed, above average last year.
#4. Apple Was Still Better Than Peers
As much as Apple stock struggled in 2022, it still performed better than pretty much any major Big Tech peer. The chart below, provided by Stock Rover, helps to illustrate the point (AAPL is the first blue line).
Meta (META) - Get Free Report was the clear loser last year. The company’s disastrous pivot to the metaverse, coupled with dwindling growth and higher operating costs helped to push Meta stock down by a concerning 65% in 2022.
#5. Hanging to $2T By A Thread
Those who pay attention to charts and technical analysis must have noticed one thing: while Apple stock headed progressively lower in 2022, it never breached the $2 trillion market cap mark to the downside.
The closest that it came to it in the first half of the year was on June 16, when Apple was valued at $2.10 trillion. From that point through the next 10 weeks or so, AAPL recovered and touched the $2.8 trillion valuation.
The low of the year, however, was reached precisely on the last few days of trading. Apple stock was valued at $2.005 trillion on December 28. Hopes for a floor at the $2T mark were shattered on the first trading day of 2023, with Apple valued at $1.98 trillion as I write this sentence.
#6. Buffett Buys The Dip In AAPL
Warren Buffett’s Berkshire Hathaway is a massive Apple investor. The conglomerate’s portfolio has been heavily concentrated in AAPL at an allocation of 38% or more for at least 10 quarters.
But starting during the 2020 COVID-19 rally in AAPL and other tech stocks, Berkshire dropped a few million shares of the Cupertino company. After owning 1 billion shares in Q2 of 2020, Buffett and team trimmed the position to around 887 million at the end of 2021.
Last year marked what may have been another pivot point in Berkshire’s portfolio. For the first time since before the pandemic, the company added Apple to its portfolio as the stock slowly headed south – a typical buy-the-dip move. Berkshire owned:
- 887 million AAPL shares in Q4 of 2021
- 891 million AAPL shares in Q1 of 2022
- 895 million AAPL shares in Q2 of 2022
- 895 million AAPL shares in Q3 of 2022
The next report that shows how many Apple shares Berkshire owned as of the end of 2022 should not come out until next month.
#7. The Lucky AAPL Investor Made 34%
As I have argued on this channel before, I think that Apple is a stock to own, not to trade – a strategy that CNBC’s Jim Cramer has also defended. But in 2022, and assuming shorting the stock is not an option, timing buys and sells may have been the best approach.
At the limit, a talented (rather, a lucky) investor could have earned 34% on Apple stock by buying it on June 16, at $130.06 per share, and selling it on August 17, at $174.55. Not bad at all for a holding period of only about two months.
But please keep in mind: it is easy to say what investors should have done in the past, since we have the benefit of hindsight. Predicting the future, on the other hand, is nearly impossible.
For this reason, I still think that Apple is a stock to own, not to trade around “high conviction” buy and sell points.
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting the Apple Maven)