Editors Note: This post is written by Matthew Hedgepeth, a guy I’ve known for a long time. He graduates in May from the University of Memphis with a MIS degree and a minor in finance. He’s about to get married, and works for me at the Salvation Army. He is far more qualified to talk about money than I am.

When I awoke this morning hearing the news every one else heard about Steve Jobs taking another medical leave of absence I jumped to two different conclusions.

  • As a consumer, I think Apple is going to be fine and continue to be the company we have grown to know and love. Tim Cook has proven himself over and over again.
  • As a 7-year holder of AAPL common stock (back when it was $17.17 a share), I’m not selling this stock just yet.

The timing of the announcement is of course strategically placed (well-placed?). U.S. Markets are closed today in observance of the MLK Jr. holiday, and Apple ( Nasdaq: AAPL) is expected to announce strong earnings tomorrow afternoon. Initially when I heard the news of Jobs departure, I thought they were going to use these results to equalize and balance the effect of Steve Jobs leaving. I doubt they will be able to break through an investor’s mindset about this though. It has never really worked in the past. Unfortunately, many investors believe that Steve Jobs is Apple and without him, it cannot be as successful as it is now. Just look when he announced a leave back in 2009, stock prices fluctuated sometimes down to 7.6%. Jobs is smart and an incredible visionary.

I think investors only get half of this.

Apple has already established themselves in the consumer electronics market with the iPhone, iPad, and Mac. This goes for hardware and software too like iOS and OS X. The list can go on and on. Steve Jobs already has a vision set in place for the company and will continue to outline his vision. I believe this can go on without him because of the team he has in place: Tim Cook, Phil Schiller, Jonathan Ive, and on and on.

But here is what might happen tomorrow: Investors are worried regardless and to them, Steve Jobs = Apple. Apple is about 20% of the NASDAQ so a significant fall from selling the stock could affect the exchange as a whole. AAPL is dropping fast in world markets already where markets aren’t closed today. German markets have already reported a 7.3% drop in share value, which results in a loss roughly of $22 billion.

But, if the Efficient Market hypothesis has taught me anything about buying and selling stocks the past 8 years (And I don’t even think I qualify as an amateur yet) is that there is money to be made and lost in the short term and long term. My personal strategy is the classic: “Buy low, sell high” bit. Of course, life is always more complicated than this.

I am going to put a Limit order in today to sell (An order basically to sell at a specified price) at a 12–15% drop when markets open tomorrow. Then I have an order setup to buy on Tuesday night/Wednesday once the stock starts rising, or jumps in after hours trading should investors buy after the (presumably) strong earnings are released.

Is this a smart decision? Probably not for you but I think it works for me. I merely trade stocks like this because I find it fun. It’s not like I’m managing a hedge fund or a college tuition account.

If any of you are selling and making some massive gains through dumping this stock tomorrow, you are welcome to buy me a 13-inch MacBook Air. My AAPL will be tied up in my Retirement account until I’m 59 and a half. In the meantime, I’ll be reading Burton Malkiel’s “A Random Walk Down Wall Street” and watching this video of him touching on the Efficient Market Hypothesis. Try to apply it to AAPL and have fun out there. But I firmly believe that Apple Inc. will continue to thrive as a company should Jobs ever decide to permanently leave the company. The team he has put in place has proven itself over and over again to the consumer. And I don’t think there will be anything to worry about.