Home > Stock Market Sells > S AAPL @189.59-190.00

S AAPL @189.59-190.00

green_appleThis is somewhat of a joint post between the two of us, as we have both sold Apple (AAPL) in the last week (AH, all shares@$189.59 and MB, 66% shares@$190.00) after having some discussions about the stock.

Our thought process was fairly simple and it revolved around the question: What is priced into the stock?  There is no bad news surrounding Apple right now.  Any thoughts that they, being a manufacturer of premium products, would be struck down by the recession have been quelled as they rolled out earnings numbers that almost defied belief.  The myth that without Steve Jobs the company would be a body with no head has been squashed, as they performed admirably during the health-related absence of their CEO. They continue to excite and amaze the population with relatively minor and incremental upgrades to their products, due to the strength of their existing market position and their incredible marketing abilities. The ever-persistent rumors about a tablet or touchscreen notepad-like product have reached the pinnacle as analysts expect a product arriving early next year that will energize that dormant segment like they did the music and mobile phone industries. Even beyond this, this is the belief that Apple’s innovative power will continue at the speed of Moore’s Law and that everything they do will work so well in the future as to cause network effects that will cause limitless profits.

As stated before, there seems to be no bad news priced in, but I see a few dark clouds on the horizon. Windows 7 is arriving soon, and is supposed to be the first product from Microsoft (MSFT) that can truly compete with OS X.  Apple may no longer stand to benefit from having a unworthy competitor. Additionally, Apple’s impeccable track record with nearly everything they touch means that if the much hyped tablet concept turns out to be anything other than astounding, investors could be disappointed.

At the time of this writing, Apple is within 5% below its all time, intra-day high of approximately 202.98.  That price was reached in December 2007, just before the financial crisis really took hold of the markets.  At that point, there were equally no reservations among analysts that AAPL was going to the moon. It was after that point that doubts began materializing.

Given the abundance of good news and the lack of bad catalysts, we are not calling a top on AAPL. However, until the good expectations baked into Apple’s price begin to materialize in a meaningful way we think there are other investment opportunities with better potential rates of return after considering Apple’s 100%+ run from the bottom on March 9th, 2009.

Disclosure: Michael is long AAPL, Andrew is long MSFT. Both love Apple products.

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  1. Don Rosenberg
    October 14, 2009 at 9:12 PM

    Dear Messrs. Hale and Burns:

    Your most recent blog post was brought to my attention by a member of Apple, Inc.’s Legal Counsel and Litigation Department. I am writing to inform you that the content of the post titled “S AAPL” contains information that may be construed as attempts to manipulate and/or otherwise distort the market’s perception of Apple, Inc.’s brands and businesses.

    The dissemination of such false information is in direct violation of U.S. Code I Sec. 403(d) and the Securities Exchange Act of 1934 because, by your own admission, you are in a position to benefit materially from the stock’s movement in the public markets.

    We demand that you cease and desist from any further discussion of the publicly traded shares of Apple, Inc., or any affiliated companies thereof. We are currently pursuing all legal avenues available to us, and will be in formal contact shortly. Please be advised that our independent counsel, Wachtell, Lipton, Rosen & Katz, and Wilson, Sonsini, Goodrich & Rosati, may attempt to serve you with notice of legal action within the next 30 days.

    Sincerely,
    Donald J. Rosenberg
    General Counsel, Apple, Inc.

  2. andrewhhale
    October 15, 2009 at 6:12 PM

    Dear Mr. Rosenberg:

    It is my position and Mr. Hale’s that our post is providing our opinions and beliefs regarding Apple’s prospects, and that to the extent any information is provided in the blog, all of it is accurate. Consequently, no part of the post is disseminating false information. If you disagree with this assessment, please identify any information that you view as false.
    Our legal counsel has advised us that there is no legal reason to remove the post in the absence of any information that supports your position and therefor we will be leaving the post up until we hear back from you.

    Best regards,
    Michael Burns

  3. Luis
    October 19, 2009 at 12:06 AM

    I’m posting this on Facebook as evidence of Apple’s desperate attempts to inflate their stock price. I hope everyone I know dumps this sucker.

  1. October 20, 2009 at 8:42 AM
  2. October 20, 2009 at 8:34 PM
  3. January 7, 2010 at 3:58 PM

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