Sunday, October 29, 2023

Nth Spiel About Apple Stock

Apple's stock is at $168. And I'd imagine there's hardly an investor in the world who'd deny they'll eventually reach $200 and beyond. If/when it does, that's a 20% profit from current price. So why aren't people buying?

1. Trees/Forest
Sales of this or that may be sluggish this quarter. Chinese uncertainty. Supply chain constraints. Exchange rates. Whine-whine-whine "THE ANTENNAS!!!!!" or whatever. All the petty trivial burps and coughs that temporarily, incrementally tilt the weather vane make people who stare at their Bloomberg terminals all day gulp another 30 antacid pills and scream SELL into their phones, but mean absolutely nothing in the long run for a company this big, successful, and profitable. Apple's not going to die the death of three cuts.

2. Conformity
Humans have false confidence in the wisdom of the crowd. If the price is low, someone must KNOW something. If the market isn't buying, it's SCARY, and we don't like to be SCARED.

Me, I know for certain that the best food is not covered in the local newspaper food section or blogger survey of The Best Food. I know how shallow and irrational conventional wisdom often is. Consider all the shallow irrationality listed right here!

I'm not nonconformist on this because I feel shrewder than the smart guys (like I said up top, the smart guys would all concede that Apple's destined for $200!) It's that I enjoy a towering advantage over them: patience. I don't know when I'll get my 20%, but it suffices to know I'll most likely get it. Pressured professionals and twitchy day traders don't/can't think that way. I wield my superpower!

3. Buy High/Sell Low
Bargain-priced goods seem less attractive. This means lulls persist irrationally. If the stock were to meteorically soar - making it a horrible buy with far less than 20% potential return - people would buy hysterically, with both fists. Shit's crazy!

4. Greed
I.e. "I want more than 20% profit (or I want it faster)".

Ok, groovy. Me, I’m just a little guy. 20% in a year or two sounds great. As for speed, I don’t want to pay short term gains tax, anyway. And if $200 does arrive too soon, so I miss it, and even if it subsequently drops again, all these same tenets will apply then, too. Apple's not a startup awaiting some singular revenue event, e.g. drug approval.

5. Doubt.
I.e. "What if it DOESN'T go to $200?"

Ok, say this prediction, which very few people would poo-poo, is wrong. This turns out to be the moment where Apple begins its inevitable decline, and it never reaches $200, staying more or less where it is for a while before slowly drifting downward. Or maybe even starts slowly drifting downward now. (I doubt it. Personally, I thinkVision Pro will be a smash once they eventually perfect price, headset weight, and supply chain issues...but of course that's just speculation.) Those unlikely prospects fail to terrify me with their ludicrously assymetrical risk. But what about a death spiral?

Apple sits on a cash hoard of $166 billion. They can buy literally any gigantically successful company in the world - or two or three or four big, prosperous ones, or innumerable large-ish successful ones - and begin working some angle that's more profitable than the current one gracing them with hundreds of billions of dollars annually....and still have cash leftover to take a year off to retool.

So: Apple presents a terrific opportunity for 20%+ profit for those with patience. There's an unlikely chance you'll fail to gain (or will gain less), but you also won't lose much. And unforeseen disaster's always possible, but in this case it would most likely mean macro conditions had degraded to a point were money's imperiled in most any vehicle.

IMO, it would be irrational not to buy here. It may go lower before it goes higher, but it's a mistake to equate "buy low/sell high" (which is possible) with "buy bottom/sell top" (which isn't possible). 20% sounds good to me!

Note: Yeah, $168 -> $200 is 19% (god, I love But Apple dipped to $166 yesterday, which does translate to 20%.

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