Outrageous 2012 Prediction... 50% Drop in Apple Stock (AAPL, GOOG, AMZN, MSFT, NOK)

Apple Inc. (NASDAQ: AAPL) is still one of the most revered companies in America, and in the world.  Since Steve Jobs has passed away there has been a bit less enthusiasm for the actual stock even if the world is addicted to buying the newest release of iPhones and iPads.  A report out of London may from Saxo Bank called “10 Outrageous Predictions For 2012” has the ultimate shocker of a prediction… Its first such prediction is that Apple stock will fall by 50% in 2012.

Google Inc. (NASDAQ: GOOG), Amazon.com Inc. (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT), and (somehow) even Nokia (NYSE: NOK) were all earmarked as the possible threats.  Some of these are threats, but some seem highly unlikely.

Saxo Bank’s predictions are self-admittedly called “unlikely events… but at the same time are far more likely than the market appreciates.”  Translation: these are outlier bets or even what some might call black swan events.  It further noted about its ten outrageous predictions, “Should any of them come to pass, they would have a significant impact on the markets.”  Finally, it also notes, “The predictions are not meant as forecasts, but it is important for investors to consider events with under-recognised probabilities.”

It goes without saying but a 50% drop in the price of Apple shares would not be well-received by the markets.  The 50% correction is not from current prices but from the 2011 high and the all-time high.  The stock is at $378.94 as of Thursday’s closing bell and the high is $426.70.  That would imply a share price of $213.35, a drop of another $165 or so.

The outrageous Apple prediction by Saxo Bank is as follows: “Going into 2012 Apple will find itself faced with multiple competitors such as Google, Amazon, Microsoft/Nokia, and Samsung across its most innovative products, the iPhone and iPad. Apple will be unable to maintain its market share of 55 per cent (three times as much as Android) and 66 per cent on the iOS and iPad.”

Other “outrageous predictions for 2012” from Saxo Bank are:

• Australia will go into recession,
• Basel III and regulation will force 50 bank nationalisations in Europe,
• EU declares extended bank holiday during 2012,
• A yet unannounced candidate takes the White House,
• Sweden and Norway replace Switzerland as safe havens,
• Swiss National Bank wins and catapults EURCHF to 1.50,
• USDCNY rises 10 per cent to 7.00,
• Baltic Dry Index rises 100 per cent,
• Wheat prices to double in 2012.

At least they did not predict that the most extreme interpretation of the Mayan 2012 predictions will come true.  Black swan events indeed…

Ultimately, the Saxo Bank list of predictions noted, “We would like nothing more than to be proven wrong on negative views, but only if they are replaced with something better than the current central bank and government-manipulated paradigm.”

Our own case for Apple shares to be cut in half is far less sinister… a 2-for-1 stock split!

The full PDF from Saxo Bank is here.

JON C. OGG