Apple (AAPL)

I became really bearish on the market when in late 2007 the leadership groups began to fail such as technology and emerging markets.  One of the leaders that accounted for most of the gains in 2007 on the Nasdaq was Apple (AAPL).  This stock basically doubled in 2007 going up over 133%.  But, it’s down 36% just in 2008 going back to $120.  Ipod sales came in a little bit less than most had hoped.  The negativism is high on Apple right now.  But, remember that it’s the computer sales that are really driving growth.  Their computers make up a very small percentage of overall desktops and laptops out there.  That percentage is going up every month.  Many people are buying Apples for their personal use and keeping their PCs for their business use. 

I think based on the fundamentals going forward (growth at 33%) and the stock down to $120, it’s compelling now.  Also, some of my technical analysis shows that the stock may be bottoming.  It may move sideways a little longer.  But, there’s been a lot of volume at this price level showing a lot of commitment.  The stock’s been moving sideways really since early February.  Keep an eye on this one.

As I’ve mentioned in previous posts, buying good companies that can outperform while still hedging by shorting the overall market is still a good strategy.  As I write the post, the Dow is down 119 but Apple (AAPL) is up almost $2.

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