Finally a day this week with movement in the markets as the $SPX500 reaches ATH once again. In our portfolio, we have average returns today with $GME up by nearly 2% and $DGE.L by about 1%. $POLY.L down by 1.25% with lower $GOLD prices. $AAPL reaches ATH.
200% PROFITS on APPLE STOCKS - Should I sell? 📱
The first time I bought Apple $AAPL shares was in April 2016 at 98/share. Apple right now is at all time high and this is the highest valuations the stock ever got in years. The total profits(including dividends) on these investments are about 200%. Is it time to sell? To hold? or to buy more? This year alone Apple doubled in value and next year we can expect 5G iPhones. That's why it is so important to look at Apple today.
The reason why I bought Apple in 2016 and last year was because of the cyclical nature of the stock. The stock is cyclical because iPhone sales are cyclical and around 60% of the sales of Apple come from iPhones. In 2016 or last year, the sales didn't fall that much but the market is always overreacting with Apple and I took the opportunity to buy. This year, nothing big happened with Apple and the stock doubled in price.
If I had to put all my money in only one company and leave it for 30 years without looking at it, I would have invested everything in Apple. That's how good this business is. Apple is a real estate company. The iPhone is one of the best piece of real estate according to Warren Buffett $BRK.B . The smartphone market has saturated and the growth of iPhone sales can only grow by 2% per year but unlike competitors, Apple has found a way to monetize this. It is by keeping the customers in the ecosystem and upselling them. They sell you the real estate and you still have to pay them rent.
Should we buy Apple right now? It is not such a good idea. The problem is with the stock and not the company. The stock price is well above its intrinsic value. The risk is with the stock. We have reached the peak of a cycle. How will the market value Apple? As a tech company? Most tech companies such as Microsoft $MSFT , Amazon $AMZN , Facebook $FB , Google $GOOG have higher PE ratio compared to Apple(even though this is the highest PE ratio of Apple in the last 10 years). Will the market value Apple as a consumer staple company? Then it is expensive. There is no way to know what will happen to Apple stock price but the risk is too big to buy more right now. Another risk with Apple is that it is a big company with high passive ownership and we know that there is a bubble in index funds and ETFs. It makes up 12.4% of the Nasdaq100 $NSDQ100 . Skyworks Solutions $SWKS is a better option than Apple.
Earlier this year 12% of my portfolio was in Apple. Now it's only 2.8% and I won't be selling everything. I am collecting a 3% dividends on the shares I bought in 2016. If the stock price falls, I'll buy more. If it rises, maybe I'll have to sell but Apple is a wonderful company and I will always have some Apple shares in my portfolio.
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