The “Apple Effect” … What if Apple stock stalls? … or slides?

Steve Jobs’ announced leave of absence reminded me of a chat I had with one of my sons a couple of weeks ago.  He casually observed that Apple stock seemed to be the common denominator across mutual funds that were beating the market averages.

Point 1:  Apple stock is up nearly 80% since last February — and more than 400% since its 2009 low —the stock has single-handedly guaranteed that my portfolio has outperformed the major averages.

Point 2: A whopping 71% of Apple’s stock is owned by institutions.  That compares to 52% for GE and 49% for Exxon Mobil.  Fidelity & Vanguard own almost 10% of Apple’s stock.  Five institutions – adding State Street, TRP and Blackrock – push the number to almost 20%.

Point 3: For some big funds, Apple is a huge part of total holdings: it’s almost 12% of Janus 20 and almost 7% of Fidelity’s Contrafund.

Raises a couple of interesting questions:

1) How much of the market run-up the past year or so can be attributed to Apple – directly or indirectly?  It has to be statistically significant.

2) What happens if the funds that have ridden Apple’s stock rise decide it’s time to cash out?

Given the concentration among a few big hitters, things could  interesting …

Data from Yahoo Finance 

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