Gyroscopic Investing

As much as I love their products and believe they are the future of computing, I think AAPL has way too high of a market cap.  It just hit $500 billion.  At some point, in order for the stock value to grow, they would have to get some large percentage of the entire money supply on the planet.

Do you think AAPL is overblown and is a good short target opportunity?

Not quite yet.  I opened a small AAPL put position last week and have paid dearly.  I do think it's likely overpriced, but who knows when it will drop.  Frankly, with low interest rates, a Presidential election forthcoming and stimulus around the globe, stocks will probably continue to do well this year.

AAPL now has a larger market cap than the entire US retail sector combined.  Surely this insanity must end at some point.

I purchased puts on AAPL a few weeks back, and that did not turn out well. Thankfully it was a small position.

As an aside, I went into an Apple store today and it was insanely busy. 

Apple stores are always insanely busy.  Half of the people not actively engaged with a salesperson are looking, not buying, and the other half are just there for the free wifi.

In the last two years I have purchased three Iphones, three Ipods, two Macbook Airs, and two Ipads.

Prior to these purchases and in the preceding five years I had purchased one computer and no other phones or music players.

If my situation is even remotely typical, I can understand how Apple is doing very well.

It will end at some point, but who knows when that will be?

Apple to hold special call Monday on use of cash

http://www.marketwatch.com/story/apple- ... 18?siteid=

...Apple's AAPL balance of cash, short-term equivalents and long-term investments was nearing the $100 billion mark as of Dec. 31, and investors and analysts have been expecting the company to consider a dividend or share buyback. The call, to begin at 9 a.m. Eastern time, is to be hosted by CEO Tim Cook and CFO Peter Oppenheimer. 
...Apple said in the statement announcing the conference call that it "will not be providing an update on the current quarter, nor will any topics be discussed other than cash."

Must be nice if you have to actually call the equivalent of a press conference just to discuss the company's money cash. 

FWIW, if you own one of the total stock market or S&P 500 indexes in your PP, you own a piece of Apple.

Finally a dividend. Nice!

Apple's PE is around 17, that's not too bad is it?

jmourik wrote: Apple's PE is around 17, that's not too bad is it?

Forward P/E is around 12. 

Apple has gained $225 since Christmas........roughly 60%. That is a tremendous amount regardless of sales and products. This stock is due for some major profit taking by savy investors and short-selling by some risk takers. This is NOT a time to be buying in my opinion. It has run too far too fast. I would wait for $500 or $450 although it might take a few months to get there. This thing looks like silver did last year going parabolic and drawing all kinds of retail buyer/bag holders.

That being said anything can happen. Maybe it will go to $700 before it has a major sell-off or maybe it stays put for the rest of the year.

There are much more attractive investments now. The time to buy Apple was 2-8 months ago.

It is in a raging multi-year bull market, short at your peril. I'd save my short arrows for something starting a downtrend (30 year US treasuries perhaps?)

Too expensive to buy now, too bullish to short, I'd be a buyer under $450 with a stop under $400.

Kshartle wrote:

I'd save my short arrows for something starting a downtrend (30 year US treasuries perhaps?)

Going against the PP philosphy?  Be careful.

MediumTex wrote:

jmourik wrote: Apple's PE is around 17, that's not too bad is it?

Forward P/E is around 12. 

Yeah, Apple isn't very expensive when you consider the P/E... especially when compared to other tech companies right now (Amazon and *cough* LinkedIn come to mind).  Isn't market cap kind of meaningless if you want to judge how overpriced a stock is?

Disclaimer:  I develop iPhone apps for a living, so Apple's success makes me a very happy person.