rileydawg's  Instablog

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Started trading in 2005. Bought GM for $19.19 in December, sold it for a profit. The obsession ensued.
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  • Is AAPL Going Higher? 0 comments
    Oct 27, 2013 10:15 PM | about stocks: AAPL

    Apple Computer....Steve Jobs, Macintosh, Largest company in the world at one time, Palo Alto. Whatever comes to mind in the past needs to be refreshed.

    AAPL is going higher after earnings.

    Here is what I see in the stock:

    Fears about competition "priced in."

    The market is smarter than you. Investors have been concerned about margins and competition for a while now. That's not new. Sure, we don't know for sure what their gross margins will look like and if their next product will succeed as products in the past have but what do we know?

    Embrace the Uncertainty

    We know that investors that bought the stock in 2006, as I did, didn't know the future either. At the time, their computers were gaining away market share in a gigantic market. At the time, analysts were saying, "If Apple can just get 5% market share their share price would increase X % [a lot]."

    And you know what, the optimists were right.

    They didn't know anything about iPads or the other Apple products that worked out magnificently. They knew nothing about what the next CEO would be like and if Jobs' legacy could continue without him.

    Activist Shareholder

    Another confidence inspiring element to Apple is Carl Icahn. Say what you want about him and his methods, but overall you are better off with him in the stock if you are long. He has a hot hand. Are you sure you want to bet against him?

    The Trend

    Are you going to look back on 2013 and say, "Gee, that Nasdaq really was soaring. I wished I had bought some AAPL when it was over 20% off its highs..."

    The market is bullish, go with the trend, manage risk and don't predict the tops. Probability says, AAPL is going higher. Don't be too smart for your own good and don't invest too much in any one position. There are a lot of good stocks out there and plenty of time to let the effect of compounding make you rich.

    When to Get in:

    You might be thinking, "Well, maybe this article's author is right, but I need to have a margin of safety and I will buy when AAPL goes back down to $400." Good luck. I don't think it will happen. And if it does it probably means that problems are more serious than I thought, its going lower and you shouldn't buy.

    I am not a fan boy and never have been. I have owned a total of one AAPL product in my life, the iPod Shuffle.

    Disclosure: Long AAPL and looking to add. Control your risk by stops and position sizing and let your winners run. I don't win all the time but when I do it's much greater than my losses, which leads to positive expectancy over the long term. Do the same and you will be good.

    Disclosure: I am long AAPL.

    Stocks: AAPL
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