Apple: Take Profits Before You Lose Them

| About: Apple Inc. (AAPL)

There is not a shred of doubt in my mind that Apple (AAPL) is a remarkable company with remarkable products and a remarkable sales and marketing strategy. Apple has reshaped the world with every product it has developed, in ways that we could only have fantasized about 20 years ago. The brand of Apple compares with the greatest brands in business of all time, and it still has room to grow. I am an Apple fan. I love every product and every innovation and am amazed at how the company continues to build on its momentum, creating an almost frenzied state among consumers and shareholders.

I am not sure how many shares have been purchased above the $550/share price but we have a few figures to at least take a look at:

  • There are 932 million shares outstanding

  • The 3 month daily average of shares traded is almost 20 million

  • Since the beginning of this year, nearly 1.2 billion shares have traded

  • For every buyer there was a seller

  • With simple math, roughly 123% of all shares have traded since January 1st, 2012

  • On March 12, 2012, the price was $552/share

  • Between March 12 and today, roughly 400 million shares have been traded, or nearly 50% of all shares outstanding

What we do not know is how many shares were traded versus purchased for the long-term. I am not sure how someone could figure that out but if any of my readers know, please let everyone know in a comment or two.

The share price has basically gone straight up. From $411/share at the start of 2012, to $619/share as of Monday. (Click to enlarge)

Apple Inc. (NASDAQ:<a href='http://seekingalpha.com/symbol/AAPL' title='Apple Inc.'>AAPL</a>)

It simply seems that there is no end in sight, and Monday an analyst predicted that the share price would be over $1,000/share within one year.

Topeka Capital Markets made the call and stated:

"Apple fever is spreading like a wildfire around the world," White said in a report, which initiated coverage of the company with a buy recommendation.

Apple will get to $1,001 by introducing a TV within a year, as well as an upgraded iPhone that works with speedier wireless networks, he said. China Mobile Ltd. (941), the Asian country's largest wireless network, will start carrying the iPhone within a year, White said, adding millions of new potential customers.

Now who am I to argue with anyone who is completely bullish on a company that I happen to love? I have said before that I am no genius, but I am pretty sure that would mean a market cap of 1 trillion bucks. OK, whatever. We toss billions and trillions around these days as if it were normal everyday amounts. Anyone on Seeking Alpha a billionaire yet? Please raise your hand!

I guess my point here folks is that Apple has climbed over 50% since January 1st. Is everyone holding on to every share until they all become billionaires? I doubt it.

I believe that as the shares have turned over, we now have a base of shareholders with a price point of about $450 per share and that is just a guess. It could be higher, but I doubt if the average is lower than $400. I don't know about you, but if I owned a bunch of shares at $400 I would be a complete fool not to take some profits now, and not wait for a possible pullback. I am not even saying that the share price will pullback. It might go up to $1500 in the next 9 months. I mean 50% every 3 months and from $620 per share would be about $2,100 bucks a share. I guess I am being conservative with a $1500 price per share "guesstimate", right?

Now before everyone starts telling me I am a hater, or jealous, or stupid, take a few minutes and read that last paragraph back a few times. Then tell everyone here if you truly believe that will happen and if you will hang on to every share you own today until, well, until whenever.

My Opinion

Making money is not a game. The only way you can make money in the stock market is by actually taking money (profits) from the stock market. if we do not do this, what is the point? I think investors are smarter than that and I believe Apple will sell off. Who will be left holding the bag, waiting for the next parabolic move in the stock to finally make some real money?

Or is everyone waiting to become a billionaire?

Disclosure: I have sold naked puts in AAPL and currently hold that position.