Thursday, January 24, 2013

AAPL and MSFT - The Parallels

There are a lot of similarities between AAPL today and MSFT in 2000 - at their respective peaks. Both became the largest publicly traded companies by market cap. Both were the leaders of their market segment and tech in general. Both could do no wrong just before they stopped innovating and collapsed under their own weight. Both had enormous cash position they did not know what to do with. Both greatly affected the stock indexes they were a part of.

There are some differences between 2000 and now though. In 2000 Nasdaq was in stratosphere. Also MSFT top coincided with the dot-com bust.

So let's look at how similar the charts are. I plotted them over SPX to show how ignorant the whole market was/is to the topping development in these undisputed market leaders at first, only to follow them lower later.

click on charts to enlarge

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