AAPL stock - long term opinions

[JustVisitingThisPlanet]

^I used to be a Mac developer (owned the very first Mac model) but drifted away from Apple due to being proprietary and the nanny management. They're also becoming exactly what they chastised in the 1984 Mac commercial. Am mainly Linux/Android but do have an iPad. Apple is great for average jane/joe consumers though who need the white glove management. Given how wide they've been going (and deeper into services) they have better chance for strong longevity than what happened to Blackberry and Nokia.

Though I got to FIRE thanks to direct private equity investments that came through, never held AAPL.

 

[copyright1997reloaded]

Apple is becoming "problematic" for me. It has been my largest single stock holding, and with the huge run up is especially so (a good problem to have, but still an issue). Two years ago Apple was at $215.05. It is up 131% since then. It was $293.65 on 12/31/19, so up 69% YTD. On 2/19/20, the previous market peak, it was at $323.62, so we are up 53.7% with the SPY essentially flat.

The stock now represents over 13% of my net worth, thus the problem. Of note is that it is in a taxable account so I am subject to LT CG as well as potentially Net Investment Income Tax (NIIT).

Over the last month or so, I've come close to writing calls on some of it with the thought of letting some of it go if called away. For some reason, I've stopped myself from doing so - thankfully - because the stock keeps moving up and those 450's that looked so far away when the stock was at 405 are now far far under water.

I will again look at these, perhaps write calls w/expiration in 2020. I am thinking of waiting for the split to see how the premiums look post split - with the stock at a lower price the % premiums might (or might not) be higher. My thought process is to sell a bit of a stock I never hoped to sell. (I made the mistake of selling some of my Apple after the 2:1 split long ago in Feb of 2005. My initial position in Apple was acquire in Dec 2001.)

Honestly, I am frozen like a deer in the headlights on this one. Everyday I do nothing has (so far) been a good decision.

 

[r3saving]

Wish I never would have done the rebalancing, but other than that consider myself very happy and lucky.

That is the trick, isn't it? We're encouraged to rebalance and rebalance. I was not an investor in the 90's ... just had a 401k to which I blindly contributed and didn't know anything other than receiving a statement now and then.

Having the courage to hold through extreme ups and downs and allow a portfolio to get absolutely lopsided could be life changing - but in either direction, I suppose. Ugh.

A stock picking service to which I subscribe once put out a monthly letter stating something to the effect of; if the Internet were turned off for the next 10 years, would you be comfortable with your holdings? I took that to heart and restructured my holdings in the next few weeks. Got rid of some and added to others. I've had very little churn since then and it's actually working out nicely...for now.

I'm not an AAPL buyer at this time but I'll hold onto what I have.

 

[tenant13]

I see it going up to $500 in the not so distant future if they keep running the company the way they do.

I'm quoting myself from June, lol. And this is Goldman Sachs analyst's warning from July: https://www.barrons.com/articles/apple-stock-rally-isnt-sustainable-goldman-sachs-warns-51595517954

Why does anyone pay attention to these people instead of a random nobody like myself Better question: why is this clown allowed to express his misguided opinions disguised as "analysis" and then get paid for it?

https://macdailynews.com/2020/08/06/goldman-sachs-analyst-rod-hall-is-an-awful-apple-analyst/#

 

[r3saving]

Why does anyone pay attention to these people instead of a random nobody like myself Better question: why is this clown allowed to express his misguided opinions disguised as "analysis" and then get paid for it?

Seriously! It seems that when a Wall Street analyst has a strong opinion, it's likely best to do the opposite

Looks at Michael Pachter's long and very, very wrong history with Netflix.

 

[kcowan]

We accumulated AAPL stock in the 90s as a speculative play. DW had the idea even though we had no Apple products. Ended up with 1400 shares in 2005 and got scared because of portfolio concentration.

So we sold it all for a net CG of $70k ($82.8k gross) and waited for it to drop. We bought back 300 shares at $51. So we reduced our exposure from $82,800 to $30,600 and decided to let it ride.

In 2011, we actually bought an iPad. Then an iPhone 4S. Eventually an iPad 2, an iPhone 8 Plus and now an iPhone SE 2020. So now we are seriously in violation of portfolio concentration rules. But we are Apple lovers.

Google caught up functionally a couple of years ago. So I think there is little reason to stay other than ease of use. But I was the one who upgraded from the 4S to the SE 2020 and I am in shock. iOS 9 to iOS 13 all at once!

We have come to expect volatilty but had we been confident in 2005, we would have been sitting on 1400 rather than 300 shares...

We are in for the long haul. Asset allocation be damned. Gates and Buffet made their fortunes through concentration. But we are watching it closely and ready to bail if it ever goes south. Capital gains be damned. But volatility is to be expected after these outsized gains.

 

[RobLJ]

I sold it in February after an almost 100% appreciation in a little over 2 years. Grateful.
But it was approaching 100% over it's normal PE, so I couldn't justify holding it. Usually I sell to get back the initial investment and let the rest ride, but it just seemed valued unjustifiably high, even though it is a great company.


That Shows you what I know (I know nutting like Sgt. Schultz); I just can't see it as a growth stock anymore, although it is valued as one. I'm probably wrong.

 

[ProspectiveBum]

The stock now represents over 13% of my net worth, thus the problem. Of note is that it is in a taxable account so I am subject to LT CG as well as potentially Net Investment Income Tax (NIIT).

...

Honestly, I am frozen like a deer in the headlights on this one. Everyday I do nothing has (so far) been a good decision.

I’m in a very similar position to you, with AAPL now representing an outsized percentage of my NW after the recent run-up. Thanks for pointing out the NIIT, I hadn’t been factoring that in at all, and would have been surprised at tax time if I ended up selling a big whack of it.

Like you, I don’t know when & how much to sell this of this asset. I believe in the long-term prospects of the company, but am starting to wonder if it’s time to take some profits. If their dividend were more generous, it’d be more of a no-brainer to just hang onto it.

 

[tenant13]

We accumulated AAPL stock in the 90s as a speculative play. DW had the idea even though we had no Apple products. Ended up with 1400 shares in 2005 and got scared because of portfolio concentration.

So we sold it all for a net CG of $70k ($82.8k gross) and waited for it to drop. We bought back 300 shares at $51. So we reduced our exposure from $82,800 to $30,600 and decided to let it ride.

In 2011, we actually bought an iPad. Then an iPhone 4S. Eventually an iPad 2, an iPhone 8 Plus and now an iPhone SE 2020. So now we are seriously in violation of portfolio concentration rules. But we are Apple lovers.

Google caught up functionally a couple of years ago. So I think there is little reason to stay other than ease of use. But I was the one who upgraded from the 4S to the SE 2020 and I am in shock. iOS 9 to iOS 13 all at once!

We have come to expect volatilty but had we been confident in 2005, we would have been sitting on 1400 rather than 300 shares...

We are in for the long haul. Asset allocation be damned. Gates and Buffet made their fortunes through concentration. But we are watching it closely and ready to bail if it ever goes south. Capital gains be damned. But volatility is to be expected after these outsized gains.

You would have been sitting on 9,800 shares (or 39,200 in another month). Apple split 1:7 in 2014 and is about to split again 1:4

 

[explanade]

I've sold a bunch of Apple and kept some when I FIRE'd almost 6 years ago.

The value of that position has almost quintupled.

Goal was to diversify but still keep some. But as AAPL is driving the major indices, especially the last 3 years or so, it's fair to say APPL has pushed the increase in my net worth, approximately 50% since my FIRE'd date.

It's provided a nice dividend during these years, so diminishing need to sell assets to fund retirement.

I've upgraded my iPhone four times since retiring, iPad a couple of times, iMac once.

Could upgrade my MacBook Pro but barely use it.

Will upgrade iPhone and maybe iPad and Apple Watch in the next 6 months or so.

 

[dadu007]

I bought AAPL around 2000, right when they introduced the iMac. (The big blue bulbous version...) I knew it would take off...unfortunately I had to sell it shortly thereafter to make a down payment on a house...new child was on the way...also my brother said it was a lousy stock and I listened to him and sold it. Doh!...Of course it soared (relatively speaking) a few years later.
Years later I bought an iPhone 4S, my first iPhone. I just had to see what the fuss was about. It absolutely changed my life, more so than my first personal PC. Fantastic and easy user experience. All my family now has iPhones and now a Mac and two iPads, even though most of my photo/video stuff is done on my Windows machine. At about the time I bought that first iPhone, the financial press was just bashing Apple to no end (fashionable then)...which was a huge disconnect with my experience as a user. If ever there was a time to jump in, it was then! Fortunately, I happened to have a decent chunk of change in my Roth IRA, so I used it buy AAPL while the price was being pushed near a long time low (I remember I placed the order on my iPhone using the Schwab app while waiting for my wife at the dentist's office.) That was around 2013, I think...? I was nervous but took the plunge. And...I still have it all...saw the 1 to 7 split later...
As of Friday, its value has gone up 552% since I bought it, and it's an outsized portion of my portfolio, more than is recommended! I can't bring my self to sell it...plus it's in my Roth, which I could potentially pass on to my sons with fewer tax consequences...
I don't see Apple failing soon...if anything, in my opinion, people are just now getting a clue as to what the company is really worth and how intertwined it is in many many lives. They're pushing into healthcare now. Oh yeah, I also have an Apple Watch (not called iWatch, btw). I love it; it's a notification extension of my phone and a biometric measuring device. It is peerless. Can you name a competing Android version?
It's a tough call, but I think the resulting "lower price" after the stock split will entice even more "investors" (gamblers?). There is more short-term upside left IMHO, so I'm not selling yet...
It was fun watching all the commentary on Stocktwits for AAPL before the closing bell on Friday!

 

[BeachOrCity]

I tend to be numbers focused. As a 2t company it is about 40x current annual earnings rate. Not outrageous. But there is one big problem.

How much can a 2t company grow?

Assuming the company holds the same margins it has to double sales to get to 20x PE

They are a premium product. So people without smartphones today are not really their focus at their current margins.

I will say that when they had low double digit PE after Great Recession I did consider it but I was indexing and always got burnt trying to buy what I know.

I think momentum and new hot thing investors can do well. They can also get burned. Like I said. I am a numbers guy.

the same logic applies to amzn.

 

[RetireBy90]

I put in a stop loss order at $497 last week and it got hit, but APPL turned around and now is back shooting for the stars. Maybe Monday when split happens it will drop a bit ? I plan on buying some back if we get a drop, perhaps to $110 after split. Interesting posts about how much I own in my main account ETFs. Next one to look at is Microsoft. It is also has been such a winner every day. I also have stop loss for them. Time will tell.

What is the saying ? pigs get slaughtered ? Made double my investment, good enough.


Quick Edit: If I sold on 24th, and split is for shareholders as of 24th, anyone know how that works ?

 

[RobLJ]

Funny; I was just talking to my son last night that I was thinking of putting a trailing stop on MSFT (and advised him to think about it for Tesla since he's up about 50% on it in a couple months).
After MSFT went up more than 2x, I sold half the position; now I'm looking at a 700% return on the original investment. It's hard to justify a close to 40 P/E on AAPL or a 35 P/E for MSFT (although I could make a feeble case for MSFT, I suppose).

I put in a stop loss order at $497 last week and it got hit Next one to look at is Microsoft. It is also has been such a winner every day. I also have stop loss for them. Time will tell.

What is the saying ? pigs get slaughtered ? Made double my investment, good enough.


Quick Edit: If I sold on 24th, and split is for shareholders as of 24th, anyone know how that works ?

 

[kcowan]

Quick Edit: If I sold on 24th, and split is for shareholders as of 24th, anyone know how that works ?

As the shareholder of record, they will issue you the 3 shares, and the buyer will retain the shares you sold. But the value per share would drop. Why would anyone buy?

 

[cargetter100]

I tend to be numbers focused. As a 2t company it is about 40x current annual earnings rate. Not outrageous. But there is one big problem.

How much can a 2t company grow?

Assuming the company holds the same margins it has to double sales to get to 20x PE

They are a premium product. So people without smartphones today are not really their focus at their current margins.

I will say that when they had low double digit PE after Great Recession I did consider it but I was indexing and always got burnt trying to buy what I know.

I think momentum and new hot thing investors can do well. They can also get burned. Like I said. I am a numbers guy.

the same logic applies to amzn.

Index investor here. When I fantasize, one of the things I fantasize is going back in time to buy Apple in 1997 or 2003 or something like that.

However, at some point, some other new comer may eat Apple's lunch. That phone business will still exist, but will go to another company or companys. Figuring out which one is always the hardest part. Indexing relieves a lot of the mental stress so at this point, at least for now, it's good enough for me.

 

[explanade]

There are a lot of people coming after Apple, as it's stock price pushed it to record valuations.

Epic has made billions selling the game Fortnite but now decided they no longer want to pay the 30% fee that Apple charges every app. developer.

Now FaceTime is complaining about the 30% fee too.

The EU is supposedly studying some antitrust case against Apple, mainly brought on by Spotify, a European music streaming company which says it's unfair that Apple offers Apple Music on Apple devices.

So no complaints for years by these third party developers but now, they want their piece of the $2 trillion pie.

They figure the political climate is good for trying to take shots at such a rich company.

 

[RetireBy90]

If I sold on 24th, and split is for shareholders as of 24th, anyone know how that works ?

Seems that it is trading on a "when split" basis, that is the shares I sold, the new split shares will go to the new owner. Strange.

 

[kgtest]

I've done well with AAPL bought and sold on the way up/down a few times in broker, as well as some buy and hold at 96 a share a while back...before the last split.

 

[The Cosmic Avenger]

Anyone else seeing weird stuff on their Fidelity dashboard? It's telling me I have about $300K more than I do...and I only own...wow, $100K worth of AAPL! I bought at $70 in 2008, but it's still just kind of "fun money" to me. Just curious if it's that far off for others, too.

Fidelity did say:

Apple and Tesla Holders: please note that while these stocks go through their stock splits this weekend, some parts of the experience are still in the midst of updating. Please visit our website, www.Fidelity.com and the Positions tab for the most up to date and accurate information. Your Todays Gain/Loss, Total Gain/Loss and Cost Basis information on the Positions tab will be fully up to date by Tuesday at market open.

But still, it was amusing to see that it looked like I blew past a major 7-digit milestone!

 

[MRG]

Anyone else seeing weird stuff on their Fidelity dashboard? It's telling me I have about $300K more than I do...and I only own...wow, $100K worth of AAPL! I bought at $70 in 2008, but it's still just kind of "fun money" to me. Just curious if it's that far off for others, too.

Fidelity did say:

But still, it was amusing to see that it looked like I blew past a major 7-digit milestone!

Yes the split appears to be a mult-step process. They want to multiply the shares by 4 and divide the price by 4. This morning my shares were multiplied but the price was not divided! Same with my Tesla.

 

[audreyh1]

I guess they are waiting for the Monday morning opening price.

 

[MRG]

I guess they are waiting for the Monday morning opening price.

It will straighten out, Fidelity did put up a message suggesting updates until Tuesday morning. The market will quickly determine the price.

 

[SecondCor521]

Same thing in Vanguard's accounts. My Dad received his additional AAPL shares but it's still multiplying by yesterday's closing price, so his portfolio value is way too high compared to what it will be on Tuesday.

 

[copyright1997reloaded]

Now FaceTime is complaining about the 30% fee too.

FaceTime is part of Apple, so I'm confused about what you are saying here.

If Apple holds at the current level, my YTD gain on Apple will be more than my entire 2020 income. I've been looking at writing calls on some of it every day...but every day hold off (I would be having a lot of it called had I acted).