YES!
Please, people who are considering putting your life savings into Apple stock, read this and understand it.
Putting too much into one stock -- no matter how great it is -- violates what is probably the most important (and simplest) rule of sound investment strategy: DIVERSIFY
And let's face it. While Apple is a great company, the recent run-up in stock price is most likely a bubble fueled by speculators. Bubbles pop. Do you really want to be that dumba** who makes some other guy rich?
"An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative." - Benjamin Graham
Chasing unsustainable returns is a sure fire way to expose your principal to risk of loss... and that kind of loss compounds over time.
What goes up must come down.
What does evaluating what happened after the fact have to do with managing risk before the fact?
You can't go back in time knowing what you know now... so would you focus on trying to predict future performance, or on insulating yourself against excessive risk going forward by finding presently underpriced securities?
Let me put it another way: If we both sold the stock today, but I bought it at a price $100 below the price you did, because I had waited for the right opportunity when the stock was in fact underpriced... who walks away with the bigger return? I do.
All else being equal, there's nothing better about estimating intrinsic value less conservatively than the next guy. The strategy is to be a tightwad in your acquisitions... and to sell to the next guy, not be him.
I find historical perspective is always valuable and cite these as examples of must buy entry points that led to huge gains and in the case of AAPL sustained growth for years.
So I will take a dose of risk management, diversification, and strong growth. It is just as dangerous and irresponsible to adhere to outmoded and limited philosophies as it is to throw money around in a market you do not understand.
Graham is an Icon and no one can deny Buffet's success but neither has the market cornered on safe or sound investing. If Graham works for you great but how much upside are you willing to miss for the illusion of absolute safety?
I love apple, but this is getting rediculous. The company just isn't worth that much. It's trading WAY above where it's current profit projections say it should. Expect a 20% correction within a year.
Apple wont pay dividends
Sounds like gambling and not a long time investment.
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AAPL has raised its value about 80% (?) since iPhone 4S came out and it is not sustainable rate.
The question isn't if but when does AAPL falter? Next quarter, next year, 2022?
I'm loving this j-curve
It started already Deutch Bank has sold all its AAPL and price dropped todayfrom 600 -> 585 ?
The W, I can stand. The M ...
Don't get me wrong, there's a lot that could happen to make AAPL go south, but investor sentiment is holding it up high. Still, very difficult to believe that the stock has just now begun such a meteoric rise.
AAPL is owned by Banks and trading is made with automatic algorithms with computers mainly.
I'm loving this j-curve
Prepare yourself that it can turn out to be a "W" or maybe "M"
its a bubble
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AAPL is owned by Banks and trading is made with automatic algorithms with computers mainly.
If suddenly 2-3 banks decide to draw their profits out, the decline will be enormous. It dropped 2% with speculations and will drop 50% when they decide to sell.
And then they will buy them back when the price is dropped enough. It is a game.
If you're an investor and not a trader then you don't have to worry about the shapes of curves and all that other technical analysis double-talk that pretends to tell you something about the future that nobody else knows. If you don't get all excited by big momentum run-ups then you won't be worried about shakeouts. Both are inevitable, and no matter what anybody tells you, they are events that you can't predict them ahead of time. So if you believe that a company's worth is going to be supported by earnings, then chill out and let other people worry about short term movements.
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If you're so sure, then short the stock for all you're worth and get back to us on how you did.
Have you read this article? http://online.wsj.com/article/SB100...33721107876.html?mod=WSJ_WSJ_News_BlogsModule
No way in hell I will buy any US stocks now when oil-trade will move out of USD
You do know what it means to short a stock?
Absolutely true in cosmological terms. The time frame is the real issue, innit?![]()