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Now that we are in April, there was only one remaining position from our 2008 picks and it is actually the last time that we did a more traditional “long only” pick, going long Apple(AAPL) on valuations purposes. The trade turned out to be quite an adventure because of one factor we had not seen in advance, the health problems of then CEO Steve Jobs, the man seen as responsible for the turnaround of the company. When rumors of problems surface, the stock suffered and then it only got worse when it was confirmed that he would be stepping down.
But we felt more comfortable than we had in the past, the stock still almost reached our stop loss which would have forced us to get out of the position. We fortunately were able to stick with our pick and the recent turnaround by both Apple and the whole market (especially in technology) proved to be of great help. The pick now stands at 23% of profit and we will be closing it out this morning at the open!
Apple remains a stock we have great interest in and will probably trade again in the near future. The biggest problem we currently see in it is its diversification. It is quite difficult to know what the company is facing given the diversity of its produts. While it has hardware such as its Ipod line, its Iphone line and even its computers, it also has a growing market in the digital markets of songs, videos and applications that are all being sold on Itunes. This makes it very difficult to get an overall view on the company. But still, we have a feeling we’ll be getting involved very soon in the company!
I think you made the right move in getting out of AAPL today. With a 23% profit it’s hard not to think you made the right move.
I charted it and placed a bear biased option trade on AAPL based on what I saw – http://mytradersjournal.com/stock-options/2009/04/13/bearish-apple-aapl-option-trade/
Let’s hope we’re both right in the near term and made out moves near the top.
@Alex – Yes and yet, the stock seems to keep going up, it’ll be interesting to see their upcoming earnings!
It’s a great pick! For your next trade with APPL, would you tend toward a Long-only position or a Long-Short strategy?
Some rumours go for Steve Jobs coming back for the Apple Worldwide Developers Conference in June. Recalled last year when the iPhone 3G made its appearance… Will Mr. Jobs be healthy enough to make a huge come back this summer? Would Apple benefit for his return? Should he come back to Apple as CEO? What do you think?
@Zavi – Actually, not even sure I’d go long, I’ll really have to re-evaluate because it has gone up so much and is starting to get hyped again, will see:)
And yes, NO doubt, Apple would benefit from Steve Jobs’ return!:)