Originally Posted by huntercr
The problem is that real investing education... is... boring... and playing fantasy stock market is more interesting to the average dummy.
For me as an Apple shareholder, I won't even think about selling until I start getting negative answers to these questions:
- Are Apple's products clearly the market leader?
- Does the public view them as extremely desired?
- Are they able to consistently keep margins above 25%?
- Are the verticals succeeding in the public's eye and gaining membership YOY? ( App store, itunes store, Apple TV )
Then I also consider these questions:
- Are there any emerging products that outperform Apple devices in the Enterprise? ( you might find this strange since Apple doesn't care about the enterprise, but it matters to me on long term growth )
- Are there any major lawsuits that do not go in Apple's favor that will lock them out of a region?
- Are there signs that Apple is going viewed as a monopoly by regulators?
- Are there any major social trends that might affect Apple's perception among the public?
Great post. Investing is not "exciting". If it's exciting, you're probably not investing, but gambling. There's nothing wrong with gambling (as long as it's your own money and you can afford to lose it), but people need to know the difference.
Your points/questions are great, and resemble the kinds of questions I constantly keep in the back of my mind as I watch Apple and the overall markets. 1b and 2d are very similar, but generally good points. Other stuff off the top of my head:
* What is happening with the overall world economy? This can be hedged out, but it's relevant.
* What does the (likely) product pipeline look like? (growth in new product areas, like possible TV)
* Investor sentiment. This is psychology as much as analysis, but significant. Not altogether separate from consumer sentiment, but different enough to consider separately.
* Alternative investments; at the end of the day, where else would I park this money? Are there other equities with better potential? Maybe, but they seem higher risk to me. Could I pay off the mortgage? Sure, but that's investment money that's costing me less than 5%/yr, and I feel AAPL is a better investment right now. At the levels I'm at, much of it could be considered gambling, but I'm able to weather significant ups and downs without hardship.
* Management. Over the past 5 years I would rate management as *stellar*. Currently, I think they are still excellent, with one of the strongest overall executive management teams in the world for a company of their size, although losing Ron Johnson sucks. Jobs' untimely death weighs on this, of course, but he has done an outstanding job of setting the company up to be successful for the next few years, barring some huge unforeseen event(s).
Enterprise, which you mention, is huge
. I think many people are underestimating the amount of potential growth in AAPL due to new adoption by enterprise. The iPad is making huge gains in those markets, much of it due to heavy iPhone use by executives and other leaders. Many IT leaders are big users of the MacBook/Pro lineups, thanks to the unix core and zillions of geeky open source tools. So because
1) IT is far more accepting of Apple products now, and
2) executives pushing for their own personal use of Apple products at work, and
3) current relatively small market share in enterprise.
there is huge potential here. Imagine if Apple could "just" gain an additional 10% of the enterprise market.
Originally Posted by bill42
I am the opposite of a stock expert,
So a few weeks ago doubled my shares to 300 by selling my other stocks and funds putting all of that IRA money into apple. Every day I sit here as my account gains about $2000 a day, thinking "Holy cow this is FUN!" and yet I know it is dangerous to have my entire IRA in one stock.
This is the other side of the equation, and why I still worry. This attitude is reminiscent of the pre-2000 market. In the late 90s everyone and their brother (and sister and cousin and mom and dad) were putting money into the stock market because all their friends were doing it and making good money. Regardless of the fact they they know nothing of investing.
This is not meant as an insult to bill42 as much as it is a reminder that when everyone has their money in the pot there's no new money to enter the game. We're not there yet, but when I start seeing lots of people who no nothing of investing putting their money in the market I'm going to start reducing my positions.
In the meantime, everyone go buy AAPL!