Nate Pile: Apple should among the three largest positions in your portfolio

“After taking a hit as part of the large-cap tech sell-off that swept Wall Street earlier this month, Apple’s stock seems to have found some traction,” Nate Pile writes.

The editor of Nate’s Notes explains, “the stock was long overdue for some serious profit-taking, but as painful as the tumble was, I believe that it has helped set the stage for future advances in the stock.”

Pile compares Apple’s fourth quarter 2007 and 2006 earnings numbers — Apple reported revenues of $6.22 billion, and net income of $904 million, or $1.01 per share, as compared to revenues of $4.84 billion and net income of $542 million, or $0.62 per share, in the same period a year ago.

Pile writes, “I continue to believe Apple should among the three largest positions in your portfolio. AAPL is considered a strong buy under $150 and a buy under $175.”

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  1. The color of the font?

    Just kidding. Things may slow… they WILL slow… at some point. In relation to other companies, though, Apple can still do pretty well. Its economic upturn these past years occurred largely during and after the bubble tech bubble bursting. It makes its money by enticing people into newer and newer tech. I’ll stay with AAPL for a while and ignore the relatively short term ups and downs.

  2. No guts, no glory.

    I have in the past invested in the “safe” sort of mode, which The Luke up above suggests. But the slowly growing diversified stocks in mutual funds have attracted the Wall Street sharks with their “fees” and other devices to plunder your accounts. They make the money, while you get shafted. And since those bozo fund managers make their bonuses based on the gains they actually book, they have to sell and re-buy often. Guess who pays the high tax rate inflicted by the IRS — you do, sucker. Screw that.

    Some rules are made to be broken and big money is made and lost that way. AAPL comprises the bulk of my investments, close to 90%. I have studied Apple and its competitors for many years — hours per day. I have never seen a stock with such prospects and such low long term risk in my life. I bet the farm many years ago on AAPL when I saw the aborning juggernaut. Then, with my last available funds, I shifted all my 401k and IRA holdings into a self managed roll over IRA before the iPhone went on sale last June. I’m AAPL all the way, baby!

    I would like to find another stocks with such a combination of huge upside and small downside, but I can’t. Not even Google can match Apple’s future prospects. Apple is a singularity, so like James Bond in Casino Royale, I pushed all of my chips to the middle of the board.

  3. Linux Guy, I couldn’t agree more. With computer growth, continued iPod and iPhone sales, iTunes, cash pile. There seems to be no risk. All growth. I’m about 60% AAPL right now. Which isn’t much as a 22 year old, but it is 60%.

  4. @Scott

    There is no question that having one stock (aapl) be the majority position in your portfolio IS risky.

    In the risk vs reward analysis, I believe that owning a large percentage of aapl is a good idea (My portfolio is ~58% aapl) but don’t fool yourself into thinking this is a risk free strategy.

  5. I know that it isn’t risk free. But as far as a single stock, and potential and risk, this is probably the best there has been in a long time. I know it’s risky, but at the same time, the reward is much better than an average stock being at 60% of total holdings. Although I guess everyone at Enron thought the same thing…

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