Jim Cramer on Apple: Why Was the Market Blind to the Stock's Value?

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The age of reason is over as stock fundamentals take a backseat to the media noise surrounding stocks, Jim Cramer told Action Alerts PLUS members who tuned into his members-only call.

It was an odd year for trading, and despite multiple all-time highs set in 2019 by all three major indexes, Jim Cramer said he sees 2020 as being an even more volatile year for stocks as the presidential election cycle heats up and issues with China come to the fore.

“For as long as I have been buying and selling stocks, I have had to hear that stocks take into account all available information and are priced accurately. But 2019 will go down as the year that such a thesis was revealed as out of date and lacking in both relevance and, yes, truth. 2020 will mean more of the same,” Cramer warned.

Apple  (AAPL) - Get Apple Inc. (AAPL) Report is a good example of this new way of thinking, according to Cramer. The stock started the year off rocky after preannouncing a down quarter.

“Dozens of analysts took their earnings and price targets down. Me? I went out to see CEO Tim Cook,” Cramer said. “I saw a level of optimism that I had rarely seen in the man. New products were coming, including wearables. New phones were coming with astounding technology including much better phones and batteries.”

The stock doubled after Cramer's visit as Cook and the company delivered on his promise. But the question Cramer asks is: "What blinded the market to the value here?”

“I think it was a sense that Apple’s ecosystem wasn’t as strong as it turned out to be coupled with some deft navigating of the international waters by Tim Cook and products that did turn out to be as amazing as he said,” Cramer said. 

Catch all the stocks Cramer is watching into the new year in his exclusive Action Alerts PLUS investing call. 

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