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Marinmaven is a San Francisco Native that grew up in the Bay Area peninsula where Silicon Valley emerged. She has worked in high tech sector for over 20 years, including an experimental project dealing with prototype of interactive television. Marinmaven was an award-winning web producer of a... More
  • Despite A Bumpy Ride I Am Staying On The AAPL Cart 2 comments
    Jan 26, 2013 9:03 PM | about stocks: AAPL

    On January 15, 2013 I bought my first stock -- ever. Before that day, I have stuck with mutual funds that I have meticulously researched and in earlier times I just let the company 401k managers do their thing. My investor profile is Aggressive with high tolerance for risk. To me the time to buy is when everyone is irrationally freaking out and heading for the hills.

    The only stock that I have ever wanted to own was AAPL. Whenever I thought about the buying AAPL stock the price was always too high for me. AAPL would be at its height and my one rule is buy low, hold, and let it grow, or sell high. (Well, okay I also bought 20 MSFT because hubby thought I should balance AAPL and GOOG stock was too pricey.)

    On January 15th, I bought one AAPL stock at 497.00. I bought another share on January 22, 2013 at 497.889. (Note to self: Just buy two next time and save on the transaction fee).

    As goddess as my witness my first buy order was $400, but I changed the order thinking that once the earnings report would calm investors. I rationalized that if I miss a low point because I put in a buy order for something lower that never comes, I will never get any shares. I figured that I would get in at the first reasonable price I saw which was $497.00. In my mind anything under the psychological number of $500 was a reasonable deal.

    The $400 number was my gut number if things didn't go well AFTER earnings report. Since I skew for Apple doing well, I couldn't bid the pessimistic $400 BEFORE the report.

    My heart sank when I saw the tumble despite numbers any company would have killed to have. Since this is Apple and it happened many times before, it wasn't crazy to think that after much hand-wringing and Apple-bashing the earnings report and announcements would save the day. After reading countless articles on SA, I understand why it declined while disagreeing with many of the premises of the decline.

    I have gone through the Kubler-Ross stages of investment loss to acceptance. Now I am cheering on hoping it goes down to 400 where I will buy 3 shares to dollar cost average. If the Bears want to topple the AAPL cart, I might as well get a deal on some shares for my trouble.

    I have noticed some of my mutual funds shedding AAPL and so there is room downward. The panic button has been pushed because they think Apple is no longer a growth equity. If that's the perception, growth funds have to start shedding AAPL from the fund, which will lead to more panic. We have to let this whole thing shake out before people realize that they overreacted and we can calmly build this up again.

    Why am I staying on the AAPL cart?

    While I love data and numbers, the Apple stock craziness is about emotion.

    What we are dealing with at heart is this classic long running Mac vs. PC feud. The reason people love Apple is the reason others hate Apple.

    Apple wants to control every aspect of the user experience from purchasing, to de-boxing, using the product and adding other products. There are those who have always resented Apple for this as they perceive that the open sourced and highly customizable products offer freedom and economy. They cling to Samsung, Microsoft, Google, and at one time Dell to offer alternatives and love the opportunity to see Apple stumble.

    The problem with these customers is they are not loyal. PC and Android customers will jump ship when a company missteps. Today they love Samsung until they don't, then it will be Google until they don't, then another brand, and perhaps ultimately an Apple product. Because they do not have the level or history of the loyalty Apple has, you cannot count that these companies being profitable in the future. They operate in a cramped space that demands constant newness and coolness with the latest bells and whistles for the sake of bells and whistles.

    Apple users stick with Apple even when we are disappointed with a certain version of hardware or software. We didn't jump ship when Maps went wrong on iPhone 5, we either stayed with 5 and used Google Maps or decided to wait and use our 4 and 4s phones till iPhone 6 comes out.

    People who own an Apple product buy other Apple products. We pay more because Apple gives us a better experience than its competitors do. Buying a PC or Android is an unpleasant experience. Since they have such low margins due to being in a cramped market, you do not get the best service. Buying an Apple product is always enjoyable because they treat you like they want you to be there. Apple products just work and do so without having to be a geek or knowing one. If there is a rare problem you can simply make an appointment with an Apple Genius.

    Small businesses who are MAC houses do not need an IT department. You pick up a Macbook, iPhone, iPod or iPad and you can tell it is an Apple product with superior industrial design, materials, and attention to detail.

    If you have a loyal customer base who appreciates what you do and what you are about, you will have a healthy and growing company. I own a Macbook Air, there is nothing out there that gets my heart thumping except a Macbok with Retina Display. This is the first time I have fallen in love with my computer. I have had Asus netbooks, Dell laptops, HP computers, as well as custom built computers, but none have made me fall in love. I will continue to buy Apple products as I need to and not look back on the days when I was a PC user.

    I will buy and hold AAPL because Apple is the company that has a solid track record of innovating. Samsung does not have the track record of innovation, just a record of taking what others like Apple innovates and adds their spin to differentiate themselves from Apple. Apple's competition just adds features to products that were born at Apple. Steve Jobs may not be here any more, but innovation is still a part of the company's DNA.

    Let us define innovation. Innovation is when you come up with a product that looks or acts like anything that has existed before. Apple has clearly done this with the iMac, Macbook Air, iPod, iPhone, and iPad. They have also innovated the customer experience. I stood in line for an iPad 2 for six hours and it was like Woodstock. More importantly, I experienced the gauntlet of happiness when I was greeted inside with countless blue shirts cheering me on. When I enter their always crowed store, I always have someone to come up and help me.

    Innovation takes time and has never been on Wall Street's schedule. It is ready when it is ready, much to Wall Street's dismay. Apple is free to innovate because they have a huge cash reserve and no fear that their innovations may eat into the sales of other products they have. They may not ever innovate again, but they are the only company to know the meaning of innovation and experienced it first hand multiple times.

    No other company has had a longer relationship with education than Apple. Schools around the country use MACs, so many kids first experience with computers are on Macs. iPads are now entering the schools with great apps for learning. With Apple's work on interactive electronic textbooks, you will see more and more students getting their textbooks on iPads. These kids do great things on their Macs and will likely get Apple products when they are adults.

    Then there is iTunes, iCloud, and other services that can go online and generate revenue.

    Apple is far ahead any of its competitors in categories that investors neglect when they are judging Apple's future potential. Apple could stop innovating tomorrow and still be the greatest company, because they have already changed the way we live by offering elegant and high quality products and services people love and stay loyal to. All they need to do is keep making improvements to the products they have and evolve them, and open new markets for those superior products and services around the world. Ultimately, I think Apple will look around for another way to change our lives and will surprise us.

    Apple did fantastic during the worst economic downturn, and an economic recovery is ahead. Why wouldn't Apple's future be promising?

    This is why I am staying on the AAPL cart.

    Disclaimer: I am obviously not an investment expert, so making investment based on my article alone is absurdly imprudent and borderline insane. If I was so clever I would be writing this from my Italian villa bought with the fortune I made on Wall Street, while George Clooney rubs my toes. I assure you, with much regret, this has not happened yet.

    Disclosure: I am long AAPL, MSFT.

    Additional disclosure: i have a limit order for shares of AAPL at $400.00 for the next 90 days.

    Stocks: AAPL
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Comments (2)
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  • The Deliberate Trader
    , contributor
    Comments (380) | Send Message
     
    Your limit order will probably be filled; but be careful what you hope for. Apple stock will probably not work as well as an iPad for some time. Meanwhile, the idea behind trading and investing is making money.

     

    For example, since August we've accumulated shares in NOK and our basis in the stock is 1.76. We do not own Nokia phones, but we've more than doubled our money in less than 6 months (and we're not doing it just by watching as the price goes up). Apple isn't going to double anytime soon; so if you want to retire to that villa in Italia, you may want to reconsider where you invest your next $400.
    27 Jan 2013, 12:25 AM Reply Like
  • Marinmaven
    , contributor
    Comments (85) | Send Message
     
    Author’s reply » The thing is having 2 shares of AAPL at 497.00 buying 3 stocks at 400. will reduce the break even price point. If I just stick with 2 shares at 497.00 plus $17 transaction fee, I would have to wait til it gets to $505.50 to break even. If I buy 3 at 400.00, I would only have to wait til it gets to $447.20. I will be poised to go down further if I have to. If I can get those 3 shares at $375.00 my break even point will be $432.00.

     

    I understand that the idea of investing is to make money. I will make money with AAPL. The only question is how much I will make. I believe that the tales of Apple's demise and its competition's victory over Apple is overblown. There is a lot of piling on right now in the press, that I have seen so many times only to see them get surprised and they are talking up the very stock they were dogging just six months earlier. AAPL may not get to $1000.00 or even $700.00, but it doesn't have to in order to make money.

     

    I am young enough and diversified enough to be patient. Five shares of AAPL is a very small share of my portfolio. As soon as I get the 5 shares, I will move on to find some other investment opportunities for my IRA. AAPL is undervalued in a sea of over-valued stocks. No matter what happens I will find ways to make every decision that I make work for me. I always calculate ways to make money with modest expectations.
    27 Jan 2013, 01:16 PM Reply Like
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