Apple -- AAPL -- Thoughts -- Complete -- Minor Tweaking Going Forward -- March 22, 2024

Locator: 46829AAPL.

Tag: AAPL Apple extended family member advisor

Updates

July 15, 2024: AAPL has surged over the past few weeks, not trading at new 52-week highs, trading at $235.

March 24, 2024: why Apple will prevail.

Original Post 

This is for an extended family member who has asked me about AAPL.

I had planned to send the family member a personal e-mail but then thought it would be easier to "do it" this way and then update it as necessary.

Background:

• the extended family member and his/her spouse inherited a fair amount of AAPL stock some years ago; they have no money of their own in AAPL;
• they have used some of their AAPL inheritance as an ATM to remodel their home;
• one of the spouses wants to hold on to AAPL for sentimental reasons; the other spouse is more pragmatic and much more concerned
• they invest through a Schwab financial advisor
• for several years now, the Schwab advisor has recommended "better" diversification which this couple has not done with AAPL; they have not sold any AAPL except for cash for home renovation (which was an incredible use of that money)
• earlier this year, they were again advised to diversify their AAPL holdings (into what, I do not know):
• they did not diversify and with the lawsuit announced yesterday and the loss of $7+ / share, the couple was once again concerned and asked for my advice

My comment (but not advice) yesterday: I bought more shares of AAPL.

My response to them:

• none of us should be doing our own investing; we need to leave it up to professionals:
• I don't service my own car; professionals maintain the car; the same should hold true for investing

Having said that, some folks just can't resist, including me.

Three questions:

• investment horizon (how many years do you plan to hold the stock)? A trading portfolio? An investment portfolio?
• do you want "tech" in your portfolio?
• how risk averse are you? On a scale of 1 to 10, would a 20% drop in your portfolio push you to suicide or would you look at it as a buying opportunity?

Initial comments:

• I can't advise regarding a trading portfolio;
• my comments are relevant only for a several-year investment that will be held in the estate of one's heirs (in other words, you don't plan ever seeing the money)

With regard to AAPL for the extended family member who asked:

• short term, less than two years, AAPL is "dead money." As an investment, expect it to go nowhere;
• at five years, it might look better;
• at thirty years, your heirs will be thrilled that AAPL is in their portfolio (comments on this later)
• Apple will be greatly distracted by the DOJ lawsuit for the next several years which will have an unknown effect on its financial returns and on the sentiment of AAPL investors, current and potential investors;
• it's unlikely that AAPL will benefit from this suit;
  
• "everyone" loves to hate AAPL; "everyone."
• AAPL will not benefit from:
• YOLO: you only live one
• MOJO: momentum 
• FOMO: fear of missing out
  
• any short squeeze
  
• all-in-all, I don't see AAPL as a great investment stock for the next few years; one might be better off to simply exchange all of one's AAPL for BRK -- 
• BRK has a lot of AAPL; 
• one won't be giving up much dividend divesting of AAPL and switching to BRK, but you will get better peace of mind and better sleep
• if you decide to go that route, follow AAPL very closely and try to sell as AAPL trends toward $180

With regard to AAPL for me:

• I have a rolling 30-year horizon
• I want a fair amount of tech in that part of the portfolio I personally manage
• as well as NVDA, AMD, and so many others are performing, I still prefer AAPL
• AAPL for me is unique for many reasons

I have to pick up Sophia. I will come back to this later. 

Reminder: I am inappropriately exuberant about the US economy and the US market, I am also inappropriately exuberant about all things Apple.

See disclaimer. This is not an investment site.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.

Reminder: I am inappropriately exuberant about the US economy and the US market, I am also inappropriately exuberant about all things Apple. 

With regard to this comment, at thirty years, your heirs will be thrilled that AAPL is in their portfolio (comments on this later)

• at least once every year, evaluate your entire portfolio and how AAPL fits into that portfolio

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More

Up until now, AAPL was considered by this extended family member and spouse to be a long term holding. Over five years, regardless of the loss yesterday, a paper loss:

• in 2019: it was a $50-stock
• today, a $180-stock

• people talk about doubling one's money in seven to eight years
• these investors more than doubled their money in less than five years
• even though they did not sell earlier, they really haven't lost anything in the last couple of years; if nothing else, they broke even and whether they sold in 2022 or today, the results would not have been much different in the big scheme of things (unless they would have sold AAPL and bought NVDA, but that would have been very unlikely)
• so, they should look at AAPL as a clean slate
• this is the question:
• looking out five years from now, if they hold their AAPL now and re-evaluate every six months, is that an awful choice, or a reasonable choice? It's probably not a great choice.
  
• one option: on a monthly basis, make a decision to sell no AAPL or sell 10% of their AAPL; if they choose the latter:
  
• 10% of their AAPL position into one of two sectors:
• a nice-dividend paying stock with some potential to appreciate in share price; or,
• give up the dividend and start building a position in BRK
• every month, during the monthly evaluation, three choices
• hold, sell no AAPL that month
• sell 10% as planned
• accelerate divestment

So, bottom, line, my advice:

• sell 10% of their existing AAPL position each month
• re-evaluate each month: hold, sell 10%, accelerate divestment of their AAPL position
  
• with AAPL cash after the sale, put 50% into BRK and 50% into a high-dividend energy stock (like ENB) if they have "no" energy in their portfolio