PLAYING WITH AAPL STOCK: How to not lose?

[lPHONE]

i guess I'm just trying to follow in my dead fathers footsteps... he bought stock in Nike before Jordan and never worked a day in his life again. Like he did with Nike, I think Apple is going to go all the way- not just with iPod/iPhone/iPad but with OSX (and the computers it runs on). OS X is the best operating system in the world but has less than 10% market share... To me, that means there's going to be a lot more customers. According to this site OS X could have 15 years of growth.

 

[FX120]

i guess I'm just trying to follow in my dead fathers footsteps... he bought stock in Nike before Jordan and never worked a day in his life again. Like he did with Nike, I think Apple is going to go all the way- not just with iPod/iPhone/iPad but with OSX (and the computers it runs on). OS X is the best operating system in the world but has less than 10% market share... To me, that means there's going to be a lot more customers. According to this site OS X could have 15 years of growth.

Apple is long long long long long long long long long past that point.

Their stock isn't a secret, and it's not going to continue to increase at this rate forever.

While Apple is performing very strong right now, I am willing to bet the world that we will see AAPL back in the mid to high 100's by the end of this year.

 

[mysterytramp]

Why does it not pay dividends?

Not their business model. Don't think they ever have. And considering they have billions in the bank, you have to wonder about their investor relations.

mt

 

[senseless]

Buying is easy. Knowing the right time to sell is almost impossible. If you knew the odds against amateur trading, you wouldn't even try. Mutual funds, hold until you retire.

 

[basesloaded190]

Im with a few others here..buy a mutual fund. for a first time investment, its a less expensive way to start a diversified portfolio instead of only have a few shares of apple, you can have a few shares of a couple of companies.

 

[basesloaded190]

Apple is long long long long long long long long long past that point.

Their stock isn't a secret, and it's not going to continue to increase at this rate forever.

While Apple is performing very strong right now, I am willing to bet the world that we will see AAPL back in the mid to high 100's by the end of this year.

While people who analyze stocks for a living are expecting to see this stock reach north of $300?! Ill take your bet any day

 

[*LTD*]

Apple is long long long long long long long long long past that point.

Their stock isn't a secret, and it's not going to continue to increase at this rate forever.

While Apple is performing very strong right now, I am willing to bet the world that we will see AAPL back in the mid to high 100's by the end of this year.

Based on?

 

[musique]

Look at history, but don't count on anything

OP, you’ve received some pretty good advice on this thread and, FWIW, I’m going to add my two cents, most of which has already been said here.

The old adage “buy low, sell high” is valuable, but that doesn’t mean that the stock itself has to go from low to high for you to make a profit. You can make a profit when a stock goes from high to low too. (This is generally advised for advanced investors though.)

But a key to investing is to think about your timing. Generally “most” ordinary investors will buy and hold. Sometimes they get lucky and get out at the right time. Other times, like your father who purchased Nike and held on for a long time, they make a lot of money. Similarly people did that with Microsoft and countless other investments. History is a good thing to look at for information, but there’s never a guarantee.

Look at Google’s last five years. You could have purchased it at $400 a share almost five years ago. You could have sold it at the same price three years later. In between you could have sold it at over $700. What if you’d waited and then seen it shooting up in 2007 and decided to purchase it at $600? Would you have had the insight to sell at $700? Or, would you have thought, as it dropped from $700, that it would head back up – all the time wondering when it was going to turn around? Would you have been so discouraged when it got to $300 that you would have cut your loses and sold at that price, losing 25% of your initial investment.

If you had, you’d have lost your opportunity to earn 50% a year later to sell at $600.

Most stocks are not quite as volatile as Google, but this is just one example of timing. Staying on Google, if you’d purchased it when it was a pretty new stock on the market (2004 or 2005) for about $200 per share (while most people were telling you that you were crazy to invest in an unknown company trying to compete against Alta Vista, Yahoo, AOL, Microsoft, etc.) and just held on, you might have tripled your investment if you’d just held on and forgotten about it.

Pardon my long ramble. It’s just that I have a friend who purchased a couple shares of GOOG when it was a bit over $500 a few years ago. He panicked when it dropped and lost more than 40% of his investment.

I’d hate to see that happen to you. 🙂

In fact, going in, let's say you purchase a stock at $100 and the next day it drops to $85, would you lose confidence and sell, losing 15%? When you make an investment in an individual stock, you should set some limits on when to sell if it goes up and if it goes down. You should also have a time limit; if not to sell, then at least to reevaluate.

Good luck.

 

[coupdetat]

I think $1000 is a reasonable amount of money to put towards learning to trade. I put in $1000 when I turned 20 and invested small amounts in several companies I was interested in, mostly in the auto industry. Most of those investments went south, and when I made gains, transaction fees and such made them not terribly worthwhile. It was a good learning experience though. I remember when Ford went down to $6.80 and I panicked and sold last year. I never found another great entry point like that, and it took me a while to recognize that kind of opportunity. Lesson learned.

So basically trade with only what you can afford to lose if you are just doing it for fun. You'll learn lots, and hopefully you'll eventually make decent enough calls to make decent percentage gains. I've been aiming for and hitting 10% on most of my stocks, and I had a 10-bagger just two weeks ago (VSTNQ).

Don't listen to these guys trying to scare you so much, but listen to their advice. Stock trading isn't magic but it takes a good helping of common sense. It's a good learning experience, as long as you trade small amounts so you don't lose your rent or food.

Although I reiterate that I really don't think AAPL is a good stock to buy right now... too late in the rally.

 

[carlgo]

Would anyone be envious if I said I bought AAPL at around $14? Wish I had bought more!

General advice:

1. Asking advice is how it is done. Disregard snarky answers. Learning involves being dissed on occasion. All this takes a thick skin anyway.

2. Most people recommend mutual funds and there are good reasons for this. I would expect that you would do well in a good fund today, as the economy improves. Just buy and hold as you learn more about all this.

3. There is a saying: buy when you hear the sounds of the cannons coming your way and sell when you hear the trumpets of victory sound (something like that). This is a poetic way of saying to buy when others panic and sell when they are feeling good.

By far my greatest successes have come with beaten down stocks, taking advantage of the anal-ists who panic like shrieking girls and beat down perfectly good stocks all the time.

Beware of "good ideas" and start-ups, new technologies and such. My worst investments by far.

About AAPL specifically: the company doesn't seem to be a favorite of many anal-ists. Apple is evidently not anal-ist friendly, being secretive and all, sort of cultish in their little minds. The stock price is high, probably will go higher, but any little disappointment or fear will knock it down.

 

[hotzenplotz]

Here was a rumor not too long ago about a 4:1 split. I only wish

 

[akm3]

i guess I'm just trying to follow in my dead fathers footsteps... he bought stock in Nike before Jordan and never worked a day in his life again. Like he did with Nike, I think Apple is going to go all the way- not just with iPod/iPhone/iPad but with OSX (and the computers it runs on). OS X is the best operating system in the world but has less than 10% market share... To me, that means there's going to be a lot more customers. According to this site OS X could have 15 years of growth.

AAPL now is not like Nike before Jordan. It's like Nike after 10 years after Jordan.

Would you have been willing to invest in AAPL when it looked like they were going out business, before Steve Jobs returned, when they were getting clobbered by competitors and most analysts believed they were doomed?

You don't get those once in a lifetime retire purchases if everything thinks it's the greatest thing ever.

Right now almost everyone is bullish on AAPL, saying it will go to 250 or 280.

'Be fearful when others are greedy, be greedy when others are fearful'

-Allen

 

[sushi]

OP, your dad was lucky with Nike. Not everyone is so lucky or can retire.

Stocks are volatile. Timing is important. Let's take Microsoft for example.

Microsoft stock has split 9 times.

1. 2 for 1 --> Sept 1987
2. 2 for 1 --> April 1990
3. 3 for 2 --> June 1991
4. 3 for 2 --> June 1992
5. 2 for 1 --> May 1994
6. 2 for 1 --> Dec 1996
7. 2 for 1 --> Feb 1998
8. 2 for 1 --> Mar 1999
9. 2 for 1 --> Feb 2003

If you purchased a 1 share at the original offering, you would have 288 shares today.

So if you purchased 1,000 shares for $28 (first closing day price) you would have invested $28,000. Yesterday the closing price was $28.63 which would give you a value of $8,245,440. Not bad at all.

However, if around January 2000 you had invested $8,245,440 in Microsoft, today you would now have around half that amount. Definitely not good.

All stocks and the stock market move up and down. Over time, the general trend is up. I believe since 1929, the average has been around 8-9% per year.

Sure it's fun to dabble in the stock market. But invest for the long run and you will do well. Remember very few do well trying to play or time the market.

 

[Sun Baked]

Why worry about stock splits?

from ... 5 big investing mistakes

One constant point of infatuation for readers has been the stock split and the appearance that by doing nothing, 100 shares of stock can become 200 shares overnight.

The reality is that stock splits have no economic value. As part of the stock split, the per-share stock price is also cut in half, meaning the dollar value of the stock — and the value of an investor's holdings — is unchanged.

There is truth to the idea that companies usually split stock when they're feeling better about the future. But splits aren't automatic money. Had you bought all 99 of the S&P 1500 stocks that split in 2007 after the announcement and held until now, you would have lost money on 64 of them, based on data from S&P's Capital IQ. And you would have lost more money on 38 of them than had you just invested in the S&P 500 index

 

[sushi]

Why worry about stock splits?

Not sure if you are replying to my post or not.

However, the only reason that I mentioned stock splits is to illustrate the value of Microsoft stock today if you purchased original shares. That's all.

Berkshire Hathaway Class A shares are a great example of a stock that doesn't split. Current value of one share is $123,800.

Where stock splits do help, is they reduce the price per share for investors which allows those with less cash on had to invest.

 

[Mondoslug]

I mean good advice from all.

This probably ain't great advice but I think it's true...if you don't need the money right away, just buy AAPL & sit on it, yeah you could wait for it to come down & get a better entry price but it's going to 300 for sure but yeah the big dawgs are going to tank it first...they always do. The minute Jobs took the stage to introduce the iPad...they tanked it bigtime.

It'll come back though...just buy it & leave it. YMMV.

 

[SpaceKitty]

You don't buy stock late into a rising trend.

So if I bought in at $200, is that too late? I don't think it is but who knows...

 

[coupdetat]

So if I bought in at $200, is that too late? I don't think it is but who knows...

It's a risky move. You got lucky, but that doesn't mean it was a good idea. Of course, there are lots of factors that weigh in on whether that type of trade can be successful.

 

[Mondoslug]

So if I bought in at $200, is that too late? I don't think it is but who knows...

200 is not too late...not unless Obama holds a news conference EVERY DAY...then he might tank the market permanently...other than that, AAPL's going up. Book it....you have to hang tough while the Hedge Funds tank it though. YMMV.

 

[mysterytramp]

200 is not too late...not unless Obama holds a news conference EVERY DAY...then he might tank the market permanently...other than that, AAPL's going up. Book it....you have to hang tough while the Hedge Funds tank it though. YMMV.

Not to turn this into a PRSI thread, but ... the market has done much better in the first 16 months of Obama's administration than it did during the last 16 months of Bush, so I don't think your criticism is justified.

Jan. 20, 2009: 8279
April 2, 2010: 10927, or ~ 32 percent increase

Sept. 7, 2007: 13,113
Jan. 20, 2009: 8279, or ~ 37 percent decrease

mt

 

[psingh01]

Nike before Jordan = Apple before Jobs (return)

Back when the "Apple is dead" talk was going on was when the time to buy was. It's been on a steady increase since then and has survived two recessions. Though the last one dropped it more than 50% so that would have been a 2nd time to buy.

Unfortunately that's how it goes. The best time to buy is when most people are selling and giving up on it for good reason. You just have to be informed about the company's direction and have a certain amount of faith that it will go that way to buck the trend and take the risk. That's the only way to really "win" but it's also the way to lose bad lol.

Only advice I can give is don't "invest" anymore than you're willing to lose.

 

[SpaceKitty]

200 is not too late...not unless Obama holds a news conference EVERY DAY...then he might tank the market permanently...other than that, AAPL's going up. Book it....you have to hang tough while the Hedge Funds tank it though. YMMV.

I'm not worried and I have no doubt it the stock will go higher. This is my first stock purchase and I have never felt more confident in doing something than I did this. 🙂

 

[Mondoslug]

Not to turn this into a PRSI thread, but ... the market has done much better in the first 16 months of Obama's administration than it did during the last 16 months of Bush, so I don't think your criticism is justified.

Jan. 20, 2009: 8279
April 2, 2010: 10927, or ~ 32 percent increase

Sept. 7, 2007: 13,113
Jan. 20, 2009: 8279, or ~ 37 percent decrease

mt

Trust me...I voted for O. I hear ya though...I guess as far as daytrading I'm talking about...he's tanked it a couple of times, I had my best day the day he announced his war on banks...freaking dropped & it's been tough recovering.

Alot of it has to be with my trading learning curve, I admit. I will say this though...when he speaks, the market drops on a dime but yeah overall it's up.