Monday, September 8, 2014

An Apple A Day

The world’s largest corporation - based on market cap today - is worth about $600B. That’s 600 billion, with a B. 

B... more or less also the grade one could assign to the corporation’s new product-launch-performance, over the last few years.

But now, with less than 24 hours to go until their major media event, Apple has begun redirecting its U.S. home web page to, where they are displaying a countdown clock to tomorrow's big event.

The buzz created by Apple, and spread by a loyal chorus of fan boys and girls, is deafening!

Everyone suggests that Apple has something major in the works for tomorrow. Their media events are always major, well-scripted and choreographed events, and this one promises to be even bigger, greater, with more substance than other, recent ones.

You were able to buy $AAPL stock around the end of 2004 for about $5. If you did, your investment would have returned a staggering 20-fold increase based on the stock price alone. That's including the recent 7:1 split, but excluding reinvested dividends.

Not a bad return on investment in a company named after one of its vegetarian founders’ favorite fruits - Apple - and his preferred variety of that fruit, the McIntosh.

Today, with the stock trading at around $100, it’s almost inconceivable that over the next decade one share may grow, once more, from $100 to $2,000. But, that is what transpired over the last decade.

And, people will keep asking: "Can the relatively new front man finally step out of the large shadow and footprints left by the genius predecessor?" 

About 7,500 apple varieties are grown throughout the world, and there are about 7.5 billion people on the planet. And Apple is making almost $7,500 per second in revenue. That’s already a mouth-full of 7.5-somethings. Given more time... I could probably source more useless 7.5-something trivia…

If the world’s population also grew 20-fold over the next decade, that would probably be really scary! For now, I'd rather put my faith in the behemoth known as Apple, as a predictable and sound - albeit sometimes consumer boring and frustrating - investment opportunity.

Heck… in the 10 minutes it took to write this post, Apple collected another $4,000,000+ in revenue! With a price/earnings (P/E) ratio in the mid-teens, and a dividend yield of 2.35%, it’s almost surprising that Apple is only 62% institutionally owned. Just these high-level indicators alone already make Apple stock a good investment prospect for your own portfolio, assuming you don't already own it.

And chances are, you already own the stock anyway, via some ETF or mutual fund that you have invested retirement money into. You are saving for your retirement, right?

The next time you think of buying some Apple gizmo, and balk at the high price, consider that the ever-increasing, higher price for their quality products on offer, will also drive the ever-increasing return on your investment, longer term. 

It's kinda like the gas price at the pump… paying too much? Well then, consider investing in some energy stocks! The latter are all good longer-term investments as well, paying handsome quarterly dividends to their shareholders, available for reinvestment.

Many investors consider Apple to be more a value play than a growth investment, but the history of the stock's performance demonstrates the opposite. Either way, I'll hold my long $AAPL position regardless of what analysts, TV hosts and investment bankers may say as they flip-flop through their boring existences.

I’m no Warren Buffett, that's for sure... but I still know a good buffet with shiny apples, when I see one…

Disclosure: long $AAPL