Agoracom Blog

Apple ($AAPL) Longs Breaking Cardinal Rule “Don’t Fall In Love With A Stock”

Posted by AGORACOM at 9:27 AM on Saturday, October 25th, 2008

It is no secret that I have been an Apple ($AAPL) bear since June of this year – and I took a lot of heat for my June call.  However, the fact of the matter is that anybody who listened to that call made a bundle of cash today:

Today, though the easy money is done, I continue to remain bearish on Apple over the next 6 months.  Yes, it will fluctuate and probably be a good trader but I would sell into each one of those rallies and buy more puts into each one of them.

Why? We haven’t even begun to see the consumer crisis hit the markets. Consumer’s are up to their eyeballs in debt and have no way to pull out now that their portfolio and home values have been crushed.  As a result, they are making serious cutbacks in spending.  Everything is on the table and the cheaper price wins. Period.

Apple will feel this the hardest because every one of their products is priced at the high-end.  There is no better example of this than the iPhone.  Don’t be fooled by this initial flush of sales that were made to early adopters and vanity purchasers.  It will definitely be harder in the coming months to convince price-conscious consumers to pony up $175 or more just to get Facebook on the go.

Make no mistake about it, I love this company for its vision and innovation and I’m sure many of you do as well … but don’t make the mistake of falling in love with the stock.  It will break your heart by Valentine’s Day 2009.


Comments are closed.