How do you take such a hard line against my reasoning outside of the fact it's not conventional? How can you be so certain that by october 1 2013, apple will have underperformed for the year?

I spent a ton of time reading about the 2013 price target for the stock and everything I've read places a price target for apple between 850-1100. If it goes up just 5% I will have made 1k on my money. Thats much better than any other short term investment. Hell, a 2% increase will outperform every other short-term investment.

the thing is you are taking cash out of a mm account , invest it in aapl and think your risk level has not changed . (btw i think even mm money will go through a purchasing power risk soon, but that is another animal ) . you are
about to invest in a company that has appreciated 400% in the last 4 years .
your volatility compared to MM is going to skyrocket. if you are ok with your 20k being possibly 16k by next year, then go and buy it , but if you need the cash by 2013 , aapl is not the smart move as a cash alternative.

Don't put your whole investment bankroll in one stock as a noob. That's just dumb. .1% and capital preservation is better than having a negative expectation gambling on stocks you don't understand.

Best case scenario: you lose 10%, cut your losses and never make the same mistake again.

Worst case scenario: you luckbox a tidy profit and mistakenly think you know wtf you're doing and become a giant stock market whale for the rest of your life.

You haven't given any reasoning and nobody itt is sure apple will underperform going forward. The point is you are taking on alot of risk with no real gain over an index fund.

And I would say your thinking is very "conventional".....Apple is an awesome company lets invest in it!!!!!

Apple TV isn't priced in or anything else they might do. The iPad didn't get priced in until after it actually launched and sales figures started coming in.

The way Apple is valued is pretty absurd. They only value it on the basis of the products they are currently producing, no premium whatsoever on future potential, the brand, the team or anything else.

The very real chance that OS X or iOS or whatever they merge them into ends up killing Windows and everybody is using Apple computers/devices/whatever in 10 years? Not $1 of the share price on that possibility. The market completely ignores it.

If there was the typical tech market hype around this stock they'd be a $2 Trillion company right now. That's probably not going to change though, so any value you are getting will only be realized if and when future products and innovations are actually hits and actually bring in cash and if they maintain their current revenue, profit and profit margin growth with existing products.

You guys talked sense into me. I'm definitely going to do it.

It's disposable income

I'd spend the money on stupid **** anyway like clothing, electronics, baseball cards, higher car payment, basically all kinds of things that offer zero ROI.

wish i could fade you . gl though.

thanks

Well fine....buy apple, play blackjack etc. Either way there is no need to start a BFI thread about it. There are pretty obvious reasons why doing this is less than optimal....but at the end of the day, given this is a site of gambling enthusiasts, I'm sure 90%+ of us have done riskier and more stupid things with money.

Look what happened to Apple the last time Steve jobs left.

Big, big difference. They got rid of him because they thought he was the problem and purposely did things differently with a bunch of people Jobs thought were idiots.

Now it's a board of directors and management team hand picked and groomed by him to take over because he knew he was going to die.

This thread is baffling me. You have nothing but $20k, and just arbitrarily decided to use it entirely on Apple stock and figured one year sounds good?

The stock price has ranged from $354.24 to $674.88 in the last year alone and is at about it's peak all-time price so far. Since 2009 it's done extraordinary well (I think it could use a stock split to do even better), and maybe they can continue. But like every other company in that industry you really have to continually innovate and move new product just to hold market position, never mind grow it at a sick rate like they have.

iPhones, iPads and MBAs/MBPs are all somewhat trendy and very desirable products right now, but that can change pretty quickly with just a couple failed product launches and bad management decisions. That's how tech goes, ask RIM about it. It's not the breakfast cereal industry where you can milk the same product forever (lol, "milk"). Apple has to come up with a new Froot Loops and Cheerios type hit year after year and that's hard to do.

Apple's successful right now because of the good decisions they made looking beyond iPods and the iTouch. Now they have to keep figuring out how to maintain interest in their current stuff with more Andriod competition from everybody to including even Amazon now, and then Windows 8 tablets. Then make new stuff we haven't heard of yet.

But all of that aside, dumping all of your money into one stock just assuming it will grow in a year based on a hunch is a good way to lose money. There are funds you can get that contain a few percent Apple.

You're honestly going to call Apple products trendy and compare them to RIM products? For god sake they're about to transition to TV and streaming cable, not to mention an iPad that will directly compete with the Kindle Fire and Google Nexus.

I never once said I only had 20k. I said I had it sitting in a money market account earning .01% a year. Then I said that the risk compared to potential value with respects to the value accrued from my money market account makes it intriguing.

Never said it's a sound way of investing in stocks, just a potential new way to earn interest on money sitting around. If I can invest 20k and potentially earn a range of $800 to 10k+ with what I consider a slight amount of risk compared to reward, I think it's a good idea regardless of the stigma associated with investing this way.

What hunch? The stock has outperformed estimates for years now, not to mention Apple is releasing a new IOS, a new iPhone with an upgrade by next year, and potentially entering into the cable and TV market.

Everything I've read, and I've been reading a lot, estimates the projected conservative price to be at $850 and ranging all the way up to $1100 a share.

So I can buy 30 shares with 20k, potentially earn 6k to 13.5k, based on multiple stock forecasts, or leave it in my money market account and earn pennies.

lol

I feel like this entire thread is a level.

OP investing your entire wad of cash into one company is extremely risky, even if it is apple. Its much less risky to invest in the sp500 etf SPY, so id recommend that instead, but tbh neither is comparable to a saving account. one is secure, the other is a very volatile investment.

a) even if your baseless theory which you support with no #s is correct, what makes you think a much more educated and savvy institutional investor hasn't already seen this and exploited it?

b) i'd like to hear on how you "know" that their valuation methods exclude future product performance. and moreover, if you could apply that to other manufacturers, device suppliers, etc that would be outstanding (seeing as i guess that would pretty much make me rich)

c) again, i'd love to see some sort of numbers based analysis that drives this. or a launch date for os/osx, or how that would drive share performance in the very near, near, intermediate, and late term.

d) so you're saying you can guarantee with certainty (assuming your model of growth being if|applesproductsneverdecreaseinmargins than stock price increases) that apple products will never decrease in margin? not due to price inputs? global economy demand? and unforseen macro event? sociopolitical factors?

do you see where i'm going with this? you're basically telling a guy who has never played poker before with 20k to sit at 2000NL, and play taggy, because "it's a sure thing!"

many securities have outperformed estimates, just as many fish have gone on heaters. the whole reason people put out estimate, and people use bankroll management, is because in a vacuum, where you value rational/optimal decision making (and therefore money), what you're doing is net unprofitable. even if apple is a guaranteed bet (because if they are, why can't you apply your analysis to other tech stocks whose cursory glance might persuade you of the same sort of a bet with a lower beta).

do you see why this is the case?

exactly.

and i'll go one step further and say, you should not be exposing your portfolio (which i'm assuming will be sensitive to your needs as a student or for something in the near term) to the volatility of equity indices.

i think an optimal portfolio for you might be something like: 50% money market/or near term tbills, 30% corporate investment grade fixed income securities exposure, 15% equity index exposure, 2.5% short tech equity index (PSQ) exposure, 2.5% APL. i included the tech equity index as a very simple hedge for you. but really, you shouldn't be making these sorts of decisions without a strong educational background in finance, and you'd have a much better chance at capital preservation (assuming inflation) given a MM complete allocation. depending on your risk preference for exposure on the short tech end or apple end you can change that 2.5% number to 5[n]apple, 5[1-n]PSQ) where n is the amount of exposure you want to apple.

that gives you something close to 50cash/30fi/20eq. and even that is aggressive. i would say if your only real goal is capital preservation with slight growth.

google the term volatility. it will hopefully open your eyes to the downside risk you haven't really interpreted in APL in factoring your decision. you might want to also want to look into recency bias and cognitive biases.

anyway you seem totally innocent in all of this, so just keep your mind open and challenge assumptions; and if you're truly interested in actively managing your money, get educated. especially commonly held ones. and that includes assumptions i made (because i'll make a ton of wrong ones all the time). otherwise, passive management is always +EV (sometimes even vs investing in an actively managed fund.)

If you are planning on selling within a year I would not consider that "investing"

Diversification for the point of diversification is stupid. You need to understand all of your investments very well before you make them. The more different things you pick the likelihood you understand each one gets smaller. With 20k you should concentrate on less than an handful of stocks if you want to get started. There are risks and you should be prepared for the possibility you have less money than what you started with if you invest in any stock.

Personally I have most of my money in Apple and think it's a good pick for the future. However I'm following the market everyday and reading anything I can get my hands on so hopefully I can stay in the loop. It's clearly risky and speculation but I'm comfortable with the analysis I've done.

lol.

how can you be comfortable with your analysis if in the end you're speculating.

that's like saying, in the end i'm comfortable with my decision to play roulette because i like gambling. which is fine. if you like gambling.

I don't have a crystal ball to predict the future so I'm going to be speculating on any investment I make. I'm a professional poker player so I'm comfortable with a little bit of gambling if I feel like I have an edge.

Cool article about Apple and thinking small instead of big

http://www.asymco.com/2012/08/22/think-small/