An Apple a day

Jul 31, 2019 | Jeremy Goldfarb


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Great read on CNBC this morning along with some excellent coverage (Sirius XM 112 if you are interested) on the Apple story, on the heels of its quarterly earnings report last eve. Now, I don't typically focus on individual companies, but in Apple's case, I will make an exception.

 

This company has used buybacks and dividends to increase shareholder value steadily since 2015. If you invested in Apple back in 2015, and held it until today, your ownership component of the company has increased by 25% and you haven't spent an additional nickel.

 

Apple has been the subject of many discussions I have had with clients. Back in 2015, I decided to take a big long position in the stock, and if memory serves, the price point was around $114/share. I remember this, because on the heels of my initial investment, the stock tanked about 20%, and I had a lot of answering to do, and relationships were strained in a couple of cases. I invested in the company because I believed that we would continue to own it for the long term. An investment, not a trade, and we still own it to this day, with some rebalancing happening along the way. I still believe in the company as of this writing. I learned a few things just on this investment alone, and I wanted to share them with you.

 

1- Making a big investment can put a decided dent in you, one way or another. Be right and you are a hero, be wrong and .......

2- Big investments in individual companies are not necessary, but if you have extreme conviction, believe in yourself and commit.

3- Diversification and broad exposure to a number of investments can yield just as much success, with far less volatility

4- Know when you are wrong, and adjust. Don't chase or try to catch a falling knife.

 

Enjoy the sunshine.