6% Profit, Very Low Risk

Apple is 6% off its recent high due to a connectivity issue with their new watches. Want to make an easy 6% profit (not bad at today's interest rates)? Buy the stock. Want to make a little more? Wait till it goes down further.

The stock market is populated by twitchy short term geniuses. So when there's a problem, the stock price must go down, whether it's an existential problem or a superficial one. With most (perhaps all) other companies, it's hard to distinguish. But not Apple.

If Apple is so rocked by this crappy little problem that it gives up its watch business entirely, and, for that matter, its computer business....and demolishes its brand new $5 billion campus and builds another one from scratch at twice that expense, and becomes a luxury yacht maker, and fails, and becomes a candy company, and fails, it can still buy Boeing and a couple other companies, and apply their superior talent and vision for success, all while maintaining at least a multi-tens-of-billions war chest to lean on for years as they ratchet up to speed.

Apple won't be dominant forever, but this watch issue will not be the death of them. Count on them springing back from this dip. I just can't tell you when. (Unlike the aforementioned twitchy geniuses, you and I have the patience to wait.)

As I noted earlier this year, upon selling most of my shares at $133 after the company had rebounded from its latest drift to the nineties for no substantial reason:

[Their $250 billion] "cash horde alone - which doesn't even do anything! - dwarfs the total market value of all but seven other corporations. Apple could throw their entire mega-successful business in the garbage and buy Starbucks, Boeing, and Goldman Sachs. If customers update their iPads more slowly than expected, or a phone antenna doesn't work properly, or a new product line undersells expectations, that's just not going to cause a death spiral."

I won't buy here, myself. I'm not a day trader. I don't like paying taxes on short term gains, and this seems like a quick blip. But if I'm wrong and this is the start of yet another months-long 30% Apple sell-off, that'd be great. Count me in (though I'll wait for it to drop way more)! I've made a good living with the past three sell-offs. But if you invest here, and it's a blip, you may have some extra Christmas money come December. Or, if it keeps falling, just forget about it until it hits the low hundreds and/or nineties, then buy more and go back to forgetting about it.

Either way, I'm confident you at least won't lose your shirt. Is it 100% certain that Apple will spring back all the way to $165? Nothing's 100% certain. But the company is not going bankrupt any time soon. So every dip, and every sell-off, is a buying opportunity.