Apple, buy when others are fearful

“Apple is in its own private bear territory, down more than 20% from its recent high above $700 per share,” Erick Santos, M.D., Ph.D. writes for The Motley Fool.

“Apple over the last few years has benefited from very inept competition,” Santos writes. “Now, companies like Google, Amazon and Samsung really get it. These companies are providing real competition to Apple, and as such the market is reacting to Apple not being the absolute dominant player it has been for the last 5 years. Android is set to dominate the low end of the smart phone market, and Amazon wants to ride the tablet trend in order to sell content. Samsung and Apple are really the only profitable handset makers for smart phones.”

Santos writes, “Apple is poised to deliver a blow out Christmas season. The only thing holding it back are supply constraints for some key components. I have confidence in Tim Cook, and know the management of Apple is working hard to resolve these issues. Apple tends to predictably drop around this time of year, but then deliver huge upside in January when the numbers are tallied. The talk of the fiscal cliff affecting Apple is mostly noise… Overall, Apple to me is a screaming buy. In the short term it may go down more in share price, but its valuation is very attractive at these levels. Buy when others are fearful is an excellent axiom, and one I follow for my long term holdings!”

Read more in the full article here.

16 Comments

  1. I’m still thinking about it. It’s either buy Apple shares in a Roth IRA or pay down the mortgage. At this point the mortgage is winning but if I had spare cash I would buy without hesitation.

    At some point the positive vibes from the street will drown out the FUD and the stock will take off again. Apple bounced around $300-400 for all of 2011 only to take off in 2012. It was a frustrating year for us shareholders but patience was rewarded this year.

  2. Picked up 9 shares yesterday. All I could afford but now I have a total of 39 shares. Wish I had bought them all at $39 when I bought my first few shares of stock.

  3. It’s a nice $400 stock. Forget the charts, down $156.14 from high only $148.93 more to go. Over half way there.

    Wake me @ $425 so I can set up my buy order for $400.

      1. I have been very consistent about $400. I stopped buying in the +/- $320 range and sold some just above $400. I think the run up above that was blind speculation and a bunch of QE cash looking for a home.

        Years ago Apple was not so widely held by institutional holders as it is now and that has changed the way it behaves as a stock.

        Apple has a lot of issues- not he least of which is a real question about Tim Cook & Co’s ability to take care of business. Right now the jury is out.

    1. Hmm…let me see if I understand what you’re saying here: You’re currently out of the equities market because you’ve found it to be too risky but if you do go back in, you’ll go back in the riskiest possible way, i.e. options. Er, right…

  4. I got out of AAPL when it hit my price target. At this point I have no intention of getting back in a market, that in my opinion, is getting ready to fall apart.

    The options are actually Put LEAPS. And they are not on AAPL, but other instruments tied to the overall market. The risk-reward ratio, based on my belief that the worst is yet to come for the stock market and our economy was worth the risk in my opinion.

    Just because I don’t like the equity market doesn’t mean I’m not trading. So, no. You don’t understand what I’m saying.

  5. What? The Fool gives aapl a realistic AND positive outlook. I’m old now but at least I lived long enough to see it happen. There was a day not so long ago when The Fool could not, under any circumstances, bring itself to say one single positive thing about the stock, even as Apple’s jet engines were in full thrust and it was very clear to the most investually illiterate that we were seeing the meteoric rise of a rare-gem of a unusually well run company.

    Apple has an interesting way of doing thing’s the right way (as a corporation), and I think that’s why Tim was chosen, because he understands how to run Apple. No he’s not the illuminated design visionary that SJ was, but think about it, who is? Really, look around, who is or even could be, and be an amazing entrepenuer too? Yes, there are and have been people at Apple who are extraordinary at specific things, but no one is going to be a SJ, not at Apple or anywhere else. Does that mean the end of Apple? Of course not. It just means that in true Apple fashion, things will be different, and for Apple that has always been and always will be a good thing.

    For those of us who’ve bought into Apple for high risk short term gains it may well be time to see Apple as well-settled into the market place, which may be a sign that we need to shift gears and begin to see Apple more as a good solid component of a well rounded portfolio and less as a get-rich-quick venue.

    Whatever the case… My opinion is that we need to all stop being Wall Street Sheep, and we all need to stop being the sheep of the current politico. Let’s get our individual heads screwed back on straight, and stop buying into this self purpetuating panic about everything so that we can more clearly see where we should be going.

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