Shedding Some Apple and Crazy Investment Facts

Wouter snapped this photo of me writing this morning’s blog post from the fireplace at Casetta in Tuscany.

I love writing in Tuscany because of the time difference. I can have a morning espresso, go for a bike ride and sit down to write while America is asleep.

My bike ride this morning was just 20 miles but it had two good climbs with a bunch of 9 and 10 percent grades:

To the markets…

Apple closed this week at $185.

When I last checked in here on my oversized Apple position, the stock crossed $165 to the upside and I wrote ‘Apple Survived‘. A month earlier I was buying the Apple crash too early and it looked like Apple would never stop going down.

This week I sold some Apple. There are many other technology stocks I could have bought last November and December that have done better that Apple in the rally from the December bottom.

That is just the nature of picking stocks.

Now, it is time to take my oversized position back to normal.

The market strength in technology is pretty broad and I want to spread the profits from the Apple trade into some emerging leaders.

In Tuscany, the $VIX (measure of volatility) is always 4, but in the United States a $VIX reading of 12 is one of the reasons I feel like selling some Apple stock right now feels prudent. In December the $VIX exploded past 30 as Apple crashed to $150. This chart really captures how bad December got.

All in all, this week was a much better time to panic and sell some stock.

Finally, Michael Batnick has a great post up this week titled ‘The Twenty Craziest Investment Facts Ever‘. These three were my favorites:

1. Since 1916, the Dow has made new all-time highs less than 5% of all days, but over that time it’s up 25,568%.
95% of the time you are underwater. The less you look the better off you’ll be.

2. The Dow has compounded at less than 3 basis points a day since 1970. Since then its up more than 3,000%.
Compounding really is magic.

18. 96% of U.S. stocks generated a life-time return that match one-month treasury bills.
The reason why so many mutual funds fail to beat the market is because so many stocks fail to beat the market.

Investing is really easy and really hard.

Have a great weekend.