Apple is one of my ideas for 2013, but I am already dreading it. Last week I wrote:
10. Apple will do something awesome and surpass 2012 highs. It won’t be the TV either as I don’t think there is enough margin or money in that business for 2013. It might just be a state of the art iOS camera. Photos are still the big thing for chronicling life and so I expect more fireworks in the photo and camera space. The iMac will be a monster for the desktop. Man cannot live by tablet alone (long $AAPL).
I feel like the Apple longs are being led to the grave by the belief in their ‘valuation, cash position, vertical integration and stores’.
Today, I can’t get this image out of my head:
— howardlindzon (@howardlindzon) December 30, 2012
It’s supposed to be funny, and it is…but it also has me thinking about new trends that will get us cavemen upright again in 2013 and beyond.
I spend most of my working day on the phone or internet, so it’s hard not to be bombarded with the death of $AAPL analogies these days. There were a few rolling around the internet comparing them to Polaroid just yesterday.
My least favorite coverage of Apple comes from the defenders of it who call the stock cheap. Cheap is a dangerous term in investing. My friend @ThinkingTrades says: ‘Momentum Never Chases Cheap’. I love that. I say, ‘Cheap’ is NOT a catalyst.
Right now, Apple has no catalysts. Analysts are bringing down numbers, momentum funds are locking in gains and I can’t get my hands on my fave product – the 27 inch iMac.
I got the big bounce to $600 that I needed to get out of $AAPL and it is starting to feel like $500 will give way to much lower prices. Apple the Company is by no means broken, but the stock is missing a catalyst.
I have held on to the idea that the stores are the catalyst which has helped me buy and hold the big dips to date.
There was never an argument an analyst could give me that would make me flinch off my thesis. But, this holiday season the stores feel less busy. As I chased down a 27 inch iMac, I noticed just a hint of slower traffic. I did spend more than I have in recent years, but the margins can’t be as good as every computer was well under $2,000. In 2008, everything sexy for the desktop was north of $2,000.
Time will tell here and tell very soon.
Bring on January and don’t forget that being wrong is part of the business of investing. Staying wrong is part of the business of imploding.
Happy New Year.