Apple News, Analysis and Podcasts

How many times have I heard the statement "If only AAPL were such and such a price, I would have invested... But it's too high now, so I can't." Spare me the details, it's an old and tried diatribe I've been hearing for the past 10+ years. If you are an individual stock investor, invest in the tech industry and have never purchased a lick of Apple, what's been holding you back from investing in Apple, Inc.?

On January 21, 2000, Apple stock took a 2:1 split, trading at $26 per share. Steve Jobs had rebuilt the company's financials, slashed business units and simplified the product line, delivering a focused Think Different campaign. If you were too young at the time or didn't yet understand that Steve Jobs had a successful vision for company, I can grant one mulligan. But for you investors, beyond that point there is simply no excuse.

At any point between 2000 thru 2004 would have been an ideal time to dive into some AAPL goodness. The dot-com boom had crashed and the economy was in turmoil, yet Apple was clearly building a foundation for the future. On May 15, 2001, Steve Jobs took a select group of media on a tour of Apple's first-ever retail store at the Tyson's Corner mall in Virginia. October 23rd 2001, Apple launched the iPod. By 2004, various models of iPods were exploding in sales, to the tune of over 15 million units during the Christmas quarter of 2004. Most importantly, Apple was turing into a highly profitable business and was clearly back in the minds of consumers.

By February of 2005, Apple's earning reports propelled the stock as high as $44.50 a share. I know, I know, many would have bought in, but the price is simply too high, as the company was overvalued. Really? On February 28th the stock split again, offering yet another entry point to buying shares at a "discount" price.

Apple's product success, coupled with its stockpile of cash and profitable business model continued to gain momentum. On January 9, 2007, at what would be Apple's last Macworld, SF event, Steve Jobs launched the iPhone. The stock closed that day at $94.62. How much higher could the stock possibly climb? Was AAPL overpriced? Was the iPhone going to be that big? What else could Apple possibly deliver? The stock is simply too high to invest in, so the tired old story goes.

By the end of December, 2007, AAPL was hovering around $200 a share, but market instability and a faltering economy, coupled with a ripe time for investors to realize profits, pushed AAPL to a low of $82 per share in 2009. Steve Jobs health also came into play, and investor confidence was shaken. Was Apple performing poorly? No. Was their instability? Yes. Based on Apple's track record, would this have represented the best time in years to enter into AAPL?...

In April, 2010, Apple launched the iPad, stunning the industry with a $499 price point, causing competition to skeptically reel at whether the iPad would succeed at selling nothing more than a big iPhone. If you had bought into that pundit skepticism, you've probably bought into it all along. The only question is, why? Apple has defeated it's detractors at virtually every turn, and by January 2011, AAPL had skyrocketed into the mid-$330's.

Today, Apple holds nearly $80 billion in cash with no debt. The company sold 9.3 million iPads and over 20 million iPhones this past June quarter, and the stock now sits at $403.41 per share yesterday. But I know, the stock is far too high to get into now. After all, how much higher could it possibly go?

If you are an individual stock investor and haven't invested in Apple yet, there are likely any number of reasons, but chief among them is you cannot see genius and vision, even when it stares you in the face. Or, perhaps you do not understand or care for Apple as a company (for whatever illogical or emotional reason). Whatever the reasoning, why this should stop you from cashing in on their success I have no idea, but hopefully some day you'll get it, and you'll get Apple – in more ways than one.

Disclaimer: Mark Reschke is not a financial analyst and is merely espousing his own opinions. Mark Reschke owns Apple shares.

4 Comments

1. Gary Gray ~ July 27, 2011 16:08
   Correction: the iPhone and iPad sales numbers should be in the MILLIONS, not in the BILLIONS. If only the sales figures were that high…
2. Mark Reschke ~ July 28, 2011 02:47
   Thanks Gary. Billions is now millions - as it should be... but for how long? Here's to hoping.
3. Said ~ July 28, 2011 19:40
   I jumped in latish as energy was doing well enough and I like the income, but at 160ish I thought I'd diversify. Then Apple fell to 90ish and so I bought more. My bro-in-law said Apple was too expensive at 160ish and still too dear at 90ish. At 300+ he was thinking and went on holiday and it sore to 360ish and then he was satisfied it was definitely too late to purchase. A split might help some procrastinators to join the club. Seems there are too many manipulators holding the cards. But Steve teaches patience, that's his Buddhist side, and in the meantime Apple rules the recent past, the present and the future.
4. Brad ~ July 31, 2011 03:23
   A 2 for 1 split and the resulting lower stock price would definitely attract the smaller investor. At $400/share many are scared off. Friends I speak with about possible investment in Apple raise this particular point first - even with all of Apple's great fundamentals. 80 billion in cash and no debt......... It seems at this stock price the the majority of average investors tends to look elsewhere

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