“Legendary investor Bill Miller is killing it again, thanks to a clever bet on Apple,” Jeff Cox reports for CNBC.
“The legendary portfolio manager’s Miller Opportunity Trust mutual fund is up a gaudy 13.9 percent this year, easily beating the S&P 500’s return of 7.8 percent including dividends, according to Morningstar,” Cox reports. “That puts the $1.4 billion security in the rating firm’s top 1 percentile in its category.”
“The big play: Options on Apple that gave the fund the chance to buy and turn a profit if the stock passed $100 a share and were purchased when the shares were just short of that target, or ‘strike’ as it is known,” Cox reports. “Of course, the stock was trading around $153 a share Wednesday afternoon and is up 32 percent in 2017 alone, making the options play a strong move.”
Much more in the full article here.
MacDailyNews Take: Some bets do pay off.
SEE ALSO:
How Apple became the world’s first $800 billion stock – May 9, 2017
Apple shares hit new all-time intraday and closing highs – May 9, 2017
Apple’s record $800+ billion market cap is now bigger than… – May 9, 2017
Analyst sees Apple’s market value at $1 trillion in a year – May 8, 2017
It would be interesting to know how well Carl Icahn is doing after declaring Apple was a waste of his time. I’d like to know where he put his money after taking it out of Apple. He couldn’t go wrong if he moved it to the FANG stocks which will likely outperform Apple for at least the next couple of years.
“Some bets do pay off.”
Intelligent/researched INVESTMENTS pay off big and often.
Investing is only a “bet” if you haven’t done proper research. The problem is that most investors don’t know what constitutes proper research, neither do Financial Planners/Consultants. They are nothing more than sales people of insurance plans, mutual funds or annuities.
For most people (all that have no interest in doing research) mutual funds is where they need to be (stay away from insurance plans and annuities of any kind).
Both my financial adviser and my accountant have warned me against having such a high proportion of my investments in AAPL. They’ve been saying the same thing for well over a decade now and I’ve asked them to specify exactly what alternatives they would suggest.
They have made a number of suggestions and I didn’t follow their advice, but I did make a point of tracking how those other investments worked out subsequently. All but one of them were consistently outperformed by AAPL, even during periods when AAPL wasn’t doing so well. One suggestion did outperform AAPL for a couple of years but then AAPL overtook it again and has kept going ever since. Of the suggestions made by those ‘experts’, was to invest in a company which later went into administration, meaning that I would have lost virtually all that investment. Two other suggestions performed very badly indeed.
It’s impossible for anybody to be certain of what the future holds and if anybody claims to see the future, you should take it with a large pinch of salt, but it’s certainly possible to look at what is happening now and make reasonably informed predictions about what will subsequently happen because of those circumstances. You can make fairly reliable investment decisions based on good knowledge of a company, the way it operates and the way that the market reacts to it’s business cycle.
For most people, a few ETFs is where they want to be… buying the whole market. Mutual funds will suck you dry with high and hidden fees.
AAPL is a great stock to buy, but it IS volatile. You have to fine with that. I had 40% of my portfolio in AAPL and sold most of it when it went up to 130 a few years ago, reduced it down to 10% of my portfolio. Used that money to diversify and the portfolio has been positive every year… AAPL tanked to the 90s… and now I watched it climb to the 150s, but it took several years to do that. I don’t regret for a moment selling my AAPL. I still maintain 8% in AAPL, my other investments in my balanced portfolio kept going up while AAPL was stuck in the 100s.
Sure it’s easy to look now and say Oh… you should have kept it… you’d be up now! But you never know. Investors are fickle. Keeping my investment in AAPL at 8% of my portfolio helps me sleep better and not worry so much.
I agree that AAPL is a very volatile stock and investors should understand that it’s likely to be a bumpy ride, but it’s important to also realise that the fundamentals of the company are in tremendous shape and while there will always be peaks and troughs, there is a high probability that the peaks will continue to get bigger. A vital aspect is to make sure that you have the flexibility to sell AAPL when you choose, rather than having to sell at a time that is not of your choosing.
For somebody who follows Apple closely, that volatility can be turned to your advantage as there are predictable times when the stock is likely to tank or soar. If you buy or sell with those times in mind, you can do very well out of AAPL. I’ve often sold much of my AAPL just before a financial announcement, watched it tank when the results failed to match the unrealistically high targets set by analysts and then used that money to buy more AAPL at the lower price before common sense kicked in and people realised that Apple was actually doing rather well after all and the stock price rose again. I must have done that about twenty times now and only called it wrong once.
i read eddie cue sold all his shares some time ago before the rise….
Eddie Cue seems to sell large numbers of shares every couple of years around November. He sold nearly $9 million worth in 2012, $28 million in 2014 and $37.5 million in 2016. It looks a routine event, but it’s always reported as though it’s something of significance.
It’s often reported as either an indication that he has no faith in the future of Apple, or that he is so stupid that he sold his shares at a lower point than he could have done. If I were him, I wouldn’t be remotely concerned by what people said while I enjoy the $75 million that I have acquired on top of my salary since 2012.
“Following the transaction, Eddy Cue continues to hold 1,464 shares of Apple stock. ”
1460 shares. At 100 bucks that’s only $146,000
That’s not significant?