I posted quite a bit late last year about the fact that
I was actively buying Google (GOOG), Apple (AAPL), and Amazon (AMZN) during the market meltdown. From late September until Thanksgiving, I bought these stocks four or five times as they dropped their late November lows. Over that period I built up positions in all three stocks that averaged into some pretty attractive prices. The average price I paid for GOOG during that period is $320, the average price I paid for AAPL during that period is $87 and the average price I paid for AMZN during that period is $37.50.My thinking was (and is) that these are great companies and the market was just "giving them away." Nobody was buying them, so I figured I should. And I did.
Last night I went out to dinner after the NY Tech Meetup with a bunch of friends including several pretty sharp public market investors like Howard Lindzon, Roger Ehrenberg, and Phil Pearlman. We got to talking about stocks as the dinner went on and specifically we talked about Apple and Google.
The story on Apple is Jobs and his health. There were eight of us in all at dinner and not one of us, I mean nobody, believed Jobs is healthy. And none of us believed that Apple's PR team is being straight on this issue. As good as the company is, I just can't own a stock when I don't believe the company is being straight with investors. So I am selling my entire position in Apple this morning, including the stock I bought earlier than last Fall. My average price on my entire position in Apple is $96, so I'll take a small loss on this and a small gain on the stock I bought during the meltdown last Fall.
The story on Google is more complicated. I still believe completely in my thesis on Google. I think Google is incredibly well positioned in the Internet economy and I think it's a bargain at ~$100bn. But it's run from near $250 to almost $350 in the past month and a half and we still don't know how their fourth quarter came out. I can sell my entire position in Google, including stock that I bought earlier in 2008 at much higher prices, and get out whole. And I can make a small gain on the stock I acquired during the meltdown. So I've decided to do just that, watch how the first quarter comes out, and then think about rebuilding a position in Google once we know how the bad economy is affecting their business and how they are going to react to it. I said in my wishes for 2009 that I would love to see Google "rationalize their business". If they actively start doing that, then I'll get back into this one with even more zeal.
I'm keeping my Amazon stock. I love what Bezos is doing with that company and I think Amazon is going to come out of this downturn stronger than ever.
So that's the story. I thought I'd tell you before I actually sold the stock, which I'll do this morning when the market opens via limit orders.
Disclosure: At time of writing, long GOOG, AAPL, AMZN
