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Memo To Freaked Out Apple Shareholders: The Stock Has Always Been Volatile

Daily Ticker

After an astonishing run from $400 to nearly $650 a share, shares of Apple (AAPL) have taken a header of late, falling five trading days in a row and dropping almost 10% from their peak.

The stock was rebounding Tuesday afternoon but this swoon caused Apple investors to worry that something's wrong with the company. And given Apple's importance to the broader stock indices, it has caused also caused market strategists to worry that the market itself is in trouble.

But is that what Apple's weakness really means?

As yet, no one really knows.

Before you get hysterical about the weakness, note that Apple has always been a volatile stock. Early last year, after reaching $360 for the first time, Apple promptly fell back into the $320s, more than a 10% drop. Then, last fall, after spiking to $420, Apple fell back to the low $360s, also more than a 10% drop. So this volatility is nothing new.

Also, nothing has really changed since Apple announced its blockbuster Q4 results, in which iPhone sales blew away expectations. There have been scattered reports that sales of the new iPad are weaker than expected and that Apple might be introducing a new smaller, cheaper iPad. But nothing is definitive. And the catalysts that helped drive Apple to $644 are still in place, namely, the expected launches of the new iPhone and a full-fledged Apple TV.

So those who liked Apple in the $640s should like it more now.

Of course, as the year progresses, Apple is also getting closer to its first truly key tests in the post-Steve Jobs era. Apple's product pipeline for this year was likely already "baked in" before Steve Jobs died last fall. It won't be until next year that Apple launches products that Jobs had little or no input into. And investors will be watching carefully to see whether Apple can still create the same product magic without Jobs in the mix.

Meanwhile, in the wake of the stock's decline, the predictions that Apple is headed to $1,000 a share have--at least temporarily--quieted. As ever, the enthusiasm for stocks cools when they go on sale.