Uncertainty About a Stock

What’s the worst thing that can happen to a stock? Uncertainty within the company, and about the company. There was a post recently on Business Insider explaining what is causing Apple’s bad performance this year.

To sum up that post, there is a lot of uncertainty within Apple, and about Apple. Managers in Apple are afraid of what’s to come. Will they be fired, promoted, or what? Once Steve Jobs leaves, there’s bound to be a lot of reshuffling within the company. Also, people aren’t even sure if Steve Job’s is leaving or not. This is what’s causing all the uncertainty. Managers and workers are uncertain about the future, because Steve is keeping everyone in the dark about his situation. Managers no longer are focused on product development, which can explain why the the iPhone 5 didn’t come out.

Investors are afraid of uncertainty. Either tell them the end is near, or tell them that everything is good. Don’t keep them in the dark about what’s going on within the company. Uncertainty causes the stock to slowly slide down, but with big swings in the stock price. Investors aren’t afraid of failure or success as much as they are afraid of uncertainty.