The Apple Inc. (AAPL), Samsung Drama: What Can Journalists Learn From It?

1. Between November 15, 2012 and March 28, 2013, Apple’s short interest has actually fallen by 7.5%. Over this same time, Apple’s stock price fell by 17.5%. Generally speaking, one would expect an inverse relationship between these two metrics.

Yes, we know there’s not a clear one-to-one relationship between short-selling activity and a stock price’s immediate action, but this simple fact sort of blows a hole in Elmer-DeWitt’s assertion that was by his words (not ours), “admittedly a stretch.”

2. While the general trend in short interest over the past year has been for increasing in Apple Inc. (NASDAQ:AAPL)’s float, it still represents a very small percentage of that float, about 2.10% to be exact, according to data from Yahoo! Finance.

Though benchmarks vary, it is widely accepted that only after a stock’s float percentage short exceeds the 20-25% level, there’s actual bearish pressure in play. Check out some of the stocks that actually have a high short interest percentage; Apple is nowhere even close having a level of short-selling activity that’s worth monitoring, let alone speculate on the motivations behind it.

What can financial journalists learn?

It’s not really important that Philip Elmer-DeWitt admits his “speculative” Samsung/Apple Inc. (NASDAQ:AAPL) drama is his own opinion. What’s important is that he voiced it on a highly-trafficked medium, that’s viewed by most readers as a fairly reputable place to obtain their Apple news from.

Unfortunately, many of those who read the post may now think that Apple’s fall in stock price is due to a doomsday plot from a competitor, without any proof to back it up. For the market’s sake, let’s hope many of them didn’t take it seriously.

For a serious look at one way investors have beaten the market in recent months, check out Insider Monkey’s premium strategy. It’s already up on the S&P by 20 percentage points in just 6 months.

Disclosure: none