Investors Are Not Selling the iPhone News

I have to say I am mighty impressed by Apple (AAPL) and Baidu.com (BIDU). I cut these names  last Monday [Cutting the Strongest Tech] anticipating a tech stock breakdown. Many tech stocks have broken down - but these two have been really holding up. I don't want to really be "out" of them; I was just hoping for a pocket of serious weakness to add at far lower prices - that has not happened. So I am going to reverse part of my sales here and get some back - I still think there is more upside in other beaten down names but you have to respect such strength in a shoddy market. I had cut these to the bone (0.1% of portfolio)

Baidu.com (BIDU) I am adding back at $310s (sold earlier this week in mid $320s) - this is just below the 200 day moving average - back to 0.7% stake (chart below does not show the 200 day in the correct place)

Apple (AAPL) I am adding back in the $173s (sold earlier this week in mid $170s) - back to 0.5% stake

I could simply be impatient, but it's been 6 weeks waiting for a real sell off in these names. Maybe if S&P 1225 breaks and we get to 1200 or 1170s which is next support someone will actually sell these names in quantity so I can scoop them up at prices I prefer.

In case you've been living under a rock or in the Halls of Congress and are oblivious to the real world, Apple launched it's new iPhone today - usually there is a "sell the news" reaction but this stock in unbreakable right now. Pooring Americans will give up their Apple gadgets only from their cold steely hands it appears. I'll add more if there is true waterfall type of selling that destroys every name, but thus far these two have held up.

With growth so precious (and becoming more so by the day) the stocks that have it might be getting even better multiples in the quarters ahead.

Disclosure: Long both in fund; no personal position

Comments

[vpwinner:]

I'm sure some people have made a lot of $ buying and selling AAPL over the years. I bought some at $11 ( split adjusted) and over the years have not sold but continued to add more when I thought I detected a downturn. AAPL now comprises 11% of my portfolio. It is the only stock that has almost consistantly aided my bottom line. I have never sold the stock and I do not plan to sell now or in the immediate future. ROCK ON AAPL!!

2008 Jul 13 09:18 PM

[User 225795:]

Well Mark Plenty of people sold their shares hoping they could drive the nav down by bashing aapl stock. And bashing they did, plenty of it to. But now they will buy back in and more than likely at a higher price. Good,I hope they have learned their lesson.I am a buy and hold person myself and I will tell you that in the long run( In case you did not realize I am a long ) longs will make more money. You know I do not listen to the BS that the Najarian Brothers talk about on CNBC about buying puts and selling calls and all that BS.and thats what they are is BSBrothers.Just go long and don't worry about the day to day fluxuations.Any way I am glad yopu saw the light and now just sit back and watch it grow and it it drops some don't worry,be happy and by more.

Cheers

2008 Jul 13 09:18 PM

[DAD08:]

Agree with your thoughts here Mark. I think AAPL can see 190 in the near term and BIDU can move towards the 355-360 area. Do you have any thoughts on MRVL- a key chip supplier to AAPL as well as RIMM and possibly NOK.
Thanks.

2008 Jul 13 09:37 PM

[User 107925:]

Cool.. Long APPL.. Long BIDU... I would have taken some BIDU profit @ 400 back in May but getting back in at these prices is a no brainer..

225795: If you don't like options fine but leave the Fabulous Najarian Boys alone.. they Rock.. I don't do bonds but I don't bash Bill Gross, the best of breed... lots of ways to make money in this crazy market besides basic trades.. BTW, Najarians have always been bullish /from my watching / on AAPL..

2008 Jul 13 09:38 PM

[Oh Blah Dee...:]

The cellphone is the MUST HAVE device of the mobile era.

Have you noticed that EVERYONE has a cellphone these days. Even youngsters, who would be called children, now have mobile phones.

And, whether I am in upper-income neighborhood or a very low-income neighborhood, EVERYONE has a mobil phone.

After EVERYONE has a mobil phone, the next thing that happens is feature segmentation and fashion display.

People used to spend $3,000 on a set of flashy wheels for an SUV. Of course, after two years the wheels were bent and dented, but THEY HAD TO HAVE WHEELS!

A $2,000 expense over two years is accepted today,

The Apple iPhone will be THE mobil phone to have, use, and display. ESPECIALLY for something that you CARRY WITH YOU, almost like jewelry.

Approximately 1.1 billion mobile phones were sold last year. In five years, annual mobile phone sales are expected to reach between 3 and 4 BILLION units.

I see Apple as getting a large part of that business, because, after voice, EVERYONE will want easy and consistent internet access.

2008 Jul 13 09:40 PM

[nixtr:]

aapl will continue to build phone market share, because unlike linux and Windows OS'es, OSX continues to recognize that reliability and speed, combined with mindless backup ease and great looks and operation are worth a few extra bucks to people who value themselves and their time and do not like frustration. Aapl get this more than any other phone with fancier features like a better camera or video storage, but then try to put the video on our windoze machine and watch the shit lockup on you.

Better on paper only, in real life a frigging hassle.

2008 Jul 13 10:22 PM

[michael Berba:]

whats up with the Najarian mullet.

I guess its cool in New York. Buy trade sell hold anyway you want.
Freedom,ahhhh... America-But a mullet?

2008 Jul 14 12:37 AM

[Andy Zaky:]

They're not selling the news, because they never bought the rumor!!!! Look at Apple's chart post earnings. It jumped after posting a strong earnings report and has been on a downtrend ever since. It reported earnings on April 25 and began its downtrend to the abyss starting in early May. No move to the upside on 3G announcement. Instead, the market sold Apple off nearly $15.00 in a matter of days. Now you wonder why they haven't sold the news on launch day? How many times do you want them to not buy the rumor but sell the same news?

2008 Jul 14 06:09 AM

[mollytjm:]

i would bet that most people, including those in my family, bought the iphone NOT for the phone...but for a real internet experience and real GPS, plus everything else. what those million people know is that it's not really a phone. it's closer to a shirt pocket computer. the rest of the world will catch on and this stock is a long term winner because of quality, innovation, great customer interface and tech support. Apple has a terrific reputation...you didn't see a million people willing to stand in line 8 hours to buy a Zune on the first day. There's a reason.

2008 Jul 14 10:31 AM

[Downhillryder:]

Mark - Did you buy Bidu at todays well beaten down prices ????

2008 Jul 14 04:24 PM

[Toni:]

Now below 175. One misstep and something that should be valued in the 200+ will trade below 160 again. That's how the things works.
Movement in price are relative to current price, so a selloff would not be based on valuation, but only on the current depressed stock price.

And market seems decided to not bounce. Nasdaq near 2100 in a couple of weeks ? Probably so.

2008 Jul 14 06:03 PM