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llewelyn
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  • I Just Don't See The Longer Term Bearishness In Apple. 0 comments
    Dec 21, 2013 6:24 AM | about stocks: AAPL

    I can't see why anyone would be bearish on Apple for the long term. Unless Apple does something absolutely ridiculous or we get some kind of market crash why would anyone be bearish on Apple going into 2014.

    I know that people want to see major innovation, they want to see a "market disrupter" and I know in the tech world things could change in a heartbeat but Apple is just so sound right now that the worse thing I could see happening is the stock price stays neutral.

    You could say that there are better places to put your money and that is probably true. But if you are purchasing shares in a company what safer place is there then Apple? Let it sit and collect a dividend if nothing happens. But I personally believe Apple is headed back to $700. Why?

    1. Money - Apple just has a crazy amount of money. Every quarter it collects another truck load of money. All this money could be used for acquisitions or developing new products. Apple has the capability of doing anything right now.
    2. Loyalty - Apple fans love their Apple products, corporate America loves Apple. Developers love Apple. I can't think of ANY other product where people are lining up around the block like they're trying to get into a hot new night club (well maybe a new Nike shoe release; but to a lesser extent).
    3. China - I know not officially on China Mobile yet but soon I imagine. This is not just a one hit pony. Apple will grow in China as China grows in itself. I could see Apple selling just as many iphones in China as it does in the US in 3 years.
    4. ITV, iwatch, itunes, iwallet- Two have not happened yet and 2 will continue to grow. The iTV could be huge if done properly, the iwatch I don't think would be that great but you never know. The iwallet will continue to grow and what can you say about itunes. Itunes is a cash cow and will continue to be one. You are watching the future as Beyonce debuted her album on itunes. I believe this will become standard. Apple will be one of the "record company's" of the future.
    5. Iphone 6 - Other than China I believe this is the main reason Apple's shares rise in 2014. I'm not sure if they will release 2 new phones or maybe 3 but I'm pretty positive the new iphone will be a larger iphone and I don't mean just longer. Out of all the complaints I hear about the iphone the one that seems to be a deal breaker for a lot of Android users is the iphones small screen. A bigger screened iphone will break sales records IMO. I don't think it will be a phablet just a wider iphone.

    What are the bearish arguments for Apple? An over saturated market? The only market Apple is in that can be argued is "over saturated" is the U.S. and I still don't think we are there yet.

    Android will eat into Apples share? Yes Android has a larger market share but like I said people are loyal to Apple and I think a larger iphone would actually take back share from Android. Apple went the wrong way with the 5C to gain market share. Maybe that phone will work in emerging markets but only at a lower price and not in the US. Apple is considered a top end phone and lowering quality (5C) just lowers the brand. What they should have done was released 2 phones of different sizes but of equal quality. That is what I think will happen in 2014.

    I have not always been long Apple. Back when Apple was originally trading near $700 I was actually short Apple just because I thought that kind of run up could not be sustained and the expectations were just too high. But now! After a 40% decline in price, a bottom and a nice steady rise since; I think it's time for a longer term thinking investor to get on the Apple train as it makes its next bullish run. Maybe it will not be as extreme as its last run but it will be a steady climb to $700 by the end of 2014.

    I mean where do you honestly think the share price will be in Dec of 2014?

    IMO

    Worst case = $500

    Most likely = $650 to $700

    Best case = over $750 (this would only be if Apple introduces a new product like an iTV or something)

    Disclosure: I am long AAPL.

    Themes: tech, long term investment Stocks: AAPL
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