Is It Time To Take A Gamble On Apple?

Includes: AAPL, CARZ, F, FDL
by: Lou Basenese

We're tackling the following questions (and a little more) in this article:

  • What's the single biggest risk to Apple's (NASDAQ:AAPL) plan to take over the world?
  • Is there such a thing as a truly all-weather investment?
  • Do consumers buy more domestics or imports? (I'm talking about cars, not beer.)

Apple: Time to Bet "On the Come"?

1%. That's all the sales growth Apple could muster up this quarter. Talk about pathetic. For years, the company had delivered double-digit sales and profit growth like clockwork.

Don't fret, though. Even with shares down about 40% from their all-time high in 2012, the new(ish) CEO wants us to hang tight on the promise of better growth ahead. In his prepared statement, Tim Cook said: "We are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014." In other words, he wants investors to bet "on the come." I wouldn't.

As I've pointed out before, the law of large numbers isn't working in Apple's favor. Neither are the business fundamentals. Average selling prices (ASPs) for the iPad and iPhone, which account for more than 50% of sales, are falling -- not rising. The iPad ASP fell to $436 from $449 last quarter, and the iPhone ASP dropped to a historic low of $581 from $613 last quarter.

When in Doubt, Bank on Dividends

Financial headlines always try to scare us out of one investment or another. If you're tired of trying to make sense of all the warnings, there is a solution. And no, it's not going 100% into cash. Even if cash reduces your anxiety levels, it's a stupid investment. (Want proof? Go here.) Instead, bank on dividend-paying stocks.

Although they might lag the broader market during bull markets over short periods of time, they consistently do a portfolio good over the longer term.

Buy Domestic

Last week, I shared a shocking divergence in the real estate market. This week, I'm sharing one in the automotive market. In the United States, new auto sales just hit the highest level in five years. In Europe, though, new auto sales dropped to their lowest levels in almost a decade.

The takeaway? Keep betting on domestic automakers, specifically Ford (NYSE:F).