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Five Apple Predictions for 2009

I'm a holder of AAPL but only since this summer or so.

1. They will need to do something with the cash. No question. More than likely it'll be a combination of acquisitions (more deals similar to PA Semi) and potentially a buy-back. (If you liked it at $200, you love it at $90 especially with short-term rates where they are.) Expecting a long-term return of 8-10% from here would not be crazy.

2. The current environment begs for accounting rigor, not arbitrary non-GAAP earnings. However, I think the iPhone contribution should be highlighted and broken out on a non-GAAP basis without the deferral.
Keep in mind though, the deferred revenue story is at least partly baked in already because it's been discussed a fair amount.

3. Pancreatic cancer is highly lethal. I lost my father to it one month after he was diagnosed. That being said, I think Steve would hang it up if he was told he was going out feet first in a short time.

4. Over the last six months, there have been 8 insider sales for a total of 6% of the stock held by the group. There have been 0 insider buys. Call me when the number reverses.

5. It might go up... but will it outperform??

One thing I might add, Apple has ZERO debt. It's probably "breathed a sigh of relief" a few times knowing there was no refi risk. I would think that lack of debt risk in today's market would get the company some kind of equity premium. Or maybe that's why the stock isn't at $70...

Good piece.

What Are Some of the Best Hedge Fund Managers Doing?

Keith,

Thanks for the yeoman's work. Can you point to more information about the correlation between EEM and GLD? Seems counter-intuitive to me. Unless you're suggesting that Short EEM (or long EEV) and GLD are correlated?

Thanks.