Regression to the mean: The real reason Apple shares are falling

The BBC ttoday has a story explaining why the punters are unwilling to pay high prices for Apple shares:
     1. Investors are worried about iPhone sales.
     2. Apple's high prices could leave it exposed if the economy sours.
     3. Investors aren't confident - yet - about Apple's services business.
     4. Apple reflects broader market concerns - like US-China trade tensions.

All very plausible, as is always the case when explaining why an outlier is regressing to the mean. The stock market is a complex, chaotic system. Any given indicator will "perform" better than average some of the time, but it will also perform worse than average. But on average, it will perform -- ta-da! -- on average. What else? So any excursion into well above (or below) average levels will not last. One can always find plausible reasons why the shift towards the average happened now rather than earlier or later, just as one one can find plausible reasons for the non-average performance that preceded it.

Some of those reasons may even the operative ones. But we'll never know for sure which ones triggered the shift, nor can we use those plausible reasons for predicting when or how the next major shift will occur. That's because the indicators are themselves averages. Worse, we don't have causal models of economic behaviour, we have only statistical ones. This is so even though (especially so, actually) when buyers and sellers are algorithms that weigh many different factors to arrive at a price. Human or not, the buyers and sellers include current prices and recent price changes in their calculations. That means that the price calculations are feedback loops. Hence the chaos in the system, and the inevitable regressions to the mean.

Addendum (2018-12-12): I should perhaps emphasise that explicability is not the same as predictability. Events that result from the interplay of many factors cannot be predicted.The best one can do is study past performance and calculate probabilities. Basing a choice on probabilities is always (ta-da!) a gamble. Hence th attraction of horse racing and other objects of wagers. However, once some event has occurred, one can usually point to those factors that played a major or (sometimes) decisive role. Hence "Hindsight is 20-20". And the pointlessness of trying to lay blame on agencies and people tasked with protecting us against calamities.