7 reasons why Apple’s stock could be the short of a lifetime

“I have a confession to make. I believe Apple stock (AAPL) is going to be world’s first trillion-dollar company yet I want to short the snot out of it,” Keith Fitz-Gerald writes for Money Morning.

“I’m not alone in my thinking,” Fitz-Gerald writes. “Uber investor Doug Kass, general partner of Seabreeze Partners Long/Short LP and Seabreeze Partners Long/Short Offshore LP, tweeted recently that he had covered ‘half his short’ on Apple following the announcement of their dividend and buyback plan.”

Fitz-Gerald writes, “Given that the stock had run up to nearly $608 a share before the announcement, presumably Kass had banked some gains, too.”

Full article with Fitz-Gerald’s “7 Reasons to Short Apple Stock” here.

[Thanks to MacDailyNews Reader “Dave B.” for the heads up.]

27 Comments

  1. … “short” a stock, especially one they believe will be a winner, is a gambler rather than an investor. While this may very well be fine, for them, taking their financial advice is like going to the track and taking the advice of some down-and-outer who has “an in”. Or “a plan”.

    1. … and my opinion has not changed.
      1) Apple “has single-handedly repeated the bubble curve of the Nasdaq run up” … except that Apple has P/E and Cash support the Nasdaq missed.
      2) “Apple is a “fad” or a “hit” company, meaning that its price seems to correlate to new product launches rather than the sustainable development of key product lines.” Let’s see … MacBook, iMac, iPod … all decade+ long “fads”. The iPhone may be a “fad”, if you consider all other “smart phones” to be “fads”.
      3) “When great leaders are gone, their legacies can struggle” … yeah, OK. This is a worry.
      4) Apple’s short … what’s he saying here?
      5) “The analyst community is almost completely positive”. Can’t argue his point, here. The analyst are usually right by accident. Unless they have something up their sleeves.
      6) “Apple’s profit margins are unbelievably high at a time when the rest of the economy lurches along”, and I agree that can be hard to sustain. Good thing Apple is banking so much of it.
      7) “Apple’s fundamentals may soften”DUH! They WILL soften. As Sam said: “The question is when?”.

  2. Sure, his reasons are fairly logical and applicable to almost any stock that has had a run like Apple’s. However, when he starts writing this:

    ‘If the economy worsens just how many people are going to buy “gee-whiz” technology beyond the hard core Apple-heads?’

    That is some real jackassery. I don’t know what “gee-whiz” technology he refers to, but he should know that both the iPhone and iPad have been successes. The iPhone and iPad start at $0 (on contract) and $499 respectively. How bad would the economy have to get?

    Put another way, what will cost conscious non-Apple-heads choose? A PC, be it Mac or PC, or some tablet?

    Right now there is no tablet market. It’s an iPad market. Maybe Windows 8 will be successful or maybe even something else. But that remains to be seen.

    Disclosure: iPhoneIsWorseThanHitler is long Apple (AAPL).

    1. It’s already been established apple does fine with sales in a major economic downturn. Just look at their growth 2008-09.

      The real head scratcher here is that this idiot can’t analyze a stock based on recent information at all and mud thane the memory of a fruit fly.

  3. it’s scary that people like Doug Kass can write blogs and then have associations with funds dealing (in this case shorting) the stock. I know they put ‘disclosures’ on their blogs but people like Kass are often quoted wihtout the ‘disclosure’ info clearly given by sites like CNBC etc as ‘expert analyst’. Kass keeps whacking apple hoping that it will fall so it’s short will work and people quote him as if he has no bias.

  4. I wish him luck covering his position should he be stupid enough to short AAPL. Sure, he could make some money on intraday dips, but that would be the definition of gambling with a stock like this.

    1. Not every short position involves selling the equity. When I determine the time is right, I’ll be purchasing PUT LEAPS on AAPL. A great risk-reward ratio as far as I’m concerned. Should make as much or more on the way down as I made (long position closed) on the way up.

  5. Not sure what the “7 reasons” are but, clueless idiot comes to mind if he wants to “short the snot out of it”.

    • Didn’t Apple set aside about $10 billion to buy back AAPL stock if someone tries to “short the snot out of it” putting it on sale for the day?

    • Didn’t Apple just put RIMM out of the personal iPhone killer market?

    • Didn’t Apple kill the HP tablet OS and HP decided to let Apple have that market. Apple is taking their PC market also. They don’t have a say in that either.

    • Isn’t Apple about to take the educational e-book market with their iBook app on their iOS devices?

    • etc.

    So, based on what stupidity would you short Apple? I would short RIMM, HP, Dell, … any company that ends up in a market that Apple wants to be in.

    It is your money and I love a short squeeze!

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