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Learning, Sharing, and Teaching => Investor Alley => Topic started by: Allen on August 28, 2014, 10:19:50 AM

Title: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on August 28, 2014, 10:19:50 AM
So, before I knew about index investing, I was SURE Apple was going to do well.  I invested about 10k in Apple and now it's worth about 30k (this is after pulling out 5k to pay off some debt)

It is mixed in a Roth IRA and IRA.  I still think AAPL is going to do extremely well, and from a buy and hold perspective, I think the dividends will be good too.  But, my total portfolio values for everything else (Which is all in index funds) is about $100k.  Total value $130k.

That AAPL is a *huge* portion of my portfolio, which creates risk.

Am I an idiot to just hang on to it?  I know I won't sell if it drops in half or less, but I get tempted to sell and put into index funds when it gets to new all time highs like this.  I'm not going to buy anymore as all future $$ go into index funds.

Keep or sell?  Keep some sell some?  Advice?
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Dicey on August 28, 2014, 10:44:57 AM
If this is all you are invested in then yes, politely, you are an idiot.

Diversification is your best bet for long-term gain. What you're doing is very risky. Since it paid off, why not use it as a jumping off point to make good moves in the future? Repeat to yourself: No individual stocks. No individual stocks. No individual stocks. Once you're set for FI, then go ahead and buy individual stocks if you want to gamble a little, but not before.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: solon on August 28, 2014, 10:49:49 AM
It's probably a little risky. I wouldn't sell, though. Just invest your new contributions in other stuff.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: TrulyStashin on August 28, 2014, 11:09:53 AM
It's probably a little risky. I wouldn't sell, though. Just invest your new contributions in other stuff.

+1   Add:  don't reinvest your AAPL dividends into AAPL.  Instead, use that cash dividend and buy stock in other companies to increase your diversification.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: JetBlast on August 28, 2014, 11:23:13 AM
The fact that you're asking about this makes me think you're at least a little uncomfortable with your current allocation, but at the same time you clearly want to hang on to AAPL. Why not just take your initial $10k off the table?  You make sure AAPL doesn't turn into a money losing venture while keeping enough to significantly profit if you're right about its future. You can use the $10k to increase the diversification of your portfolio.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Kaspian on August 28, 2014, 11:31:45 AM
Am I an idiot to just hang on to it? 

Haha...  Though I have no crystal ball to say where Apple will be in 10 years, tech can be fickle.  You might want to ask people who invested in Pitney-Bowes in the 1990s about it.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: diesel15 on August 28, 2014, 11:32:01 AM
I know I won't sell if it drops in half or less, but I get tempted to sell and put into index funds when it gets to new all time highs like this.  I'm not going to buy anymore as all future $$ go into index funds.

Keep or sell?  Keep some sell some?  Advice?

First off, you've tripled your original investment so congrats on being an "idiot".  If you feel like the risk is too high for you with this large of a percentage of your portfolio in AAPL why not set a stop limit on this to make sure that your profits are locked in at a certain level?  If it declines in value below your threshold it will automatically sell and you can reinvest the proceeds in a more diversified way and if it continues to climb you continue to make money on it.  If you still believe in Apple and think it will do well in the future I see no reason to sell just for the sake of selling.  Don't make the mistake though of riding it into the ground and hoping for a rebound if it tanks.  A wise man once told me "nobody ever went broke taking a profit".  Develop an exit strategy if you are uncomfortable with the weight within your portfolio and then stick to it. 
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: sol on August 28, 2014, 11:33:24 AM
APPL is 3.36% of SPY so I've got about that much too.  Doesn't really worry me, we're all overinvested in big US multinationals.  Par for the course when indexing.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: nordlead on August 28, 2014, 11:35:51 AM
APPL is ~2.7% of total stock (VTSAX for example since you didn't say what index you were following), which means that you are...

25.1% APPL, and 75% everyone else (with the next closest holding of Exxon at only 1.5%, or maybe someone like Google who has various investor classes, but I doubt it is higher).

Do you really believe that APPL is going to outperform significantly outperform the likes of Google, or Facebook, or any of the other highly popular tech company? Since Facebook's IPO, the biggest winners have been Facebook, Google, S&P500, and then Apple, where Facebook's total return is ~100%, and Apple's total return was only ~25% (and the S&P500 ~50%).

It seems to me that you would have done better over the last 1.5 years indexing, and even better if you were a better stock picker. Personally, I'd sell, but if you want to concentrate on high flying technology then maybe diversify a little. Maybe get a basket of tech companies either through the NASDAQ composite (which matched the S&P500 since the FB IPO), or something else.

Oh, and I wish I bought APPL years ago, but hindsight is 20/20.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: kyleaaa on August 28, 2014, 02:02:31 PM
Smart move would be to sell it since there would be no tax consequences for doing so. You got lucky and won the mini-lottery. Cash out!
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Franklin on August 28, 2014, 02:15:53 PM
I'm not going to tell you to sell one of the best companies in America, and the SPY allocation of AAPL is case in point.  But I agree that you must be asking for a reason, so you should probably trim back your initial investment and play with house money.  That would be 5K since you already pulled 5K.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Angie55 on August 28, 2014, 02:22:40 PM
I have 95% (30k) of a previous 401k in ExxonMobil stock. So I have exactly the same feeling! Except mine has not done nearly as well as it was bought during the high time.

I'm just not sure how/what to do about it. I had thought because it was a previous 401k that if I wanted to change the allocation I'd have to rollover to another account somewhere first. That probably makes me more of an idiot.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: billygoat on August 28, 2014, 02:27:37 PM
The general rule of thumb that I've read on many occasions is that you never want more than 5 percent of your portfolio in any one stock. (yes, citation needed, but you won't get one)

Saying that 30k is a lot depends on the overall size of the portfolio. It might be wayyyy too much, or a drop in the bucket. In your case, since you're asking the question, it is likely the former. Sell some.

WP

Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Eric on August 28, 2014, 02:35:17 PM
Smart move would be to sell it since there would be no tax consequences for doing so. You got lucky and won the mini-lottery. Cash out!

Yep!
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: daveydinner on August 28, 2014, 02:48:03 PM
Similar dilemma, I bought some Tesla when it was $30/share, before it was "momentum" stock. Just a little side gamble. But now it's done so well that it's a huge percentage of the portfolio. i KNOW i should rebalance. but i BELIEVE there's nowhere but up for this company...
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Northerly on August 28, 2014, 02:51:19 PM
Remember the irrelevance of sunk costs and past decisions. You might ask yourself: "If I were in an all cash position and wanted to invest, would I allocate over 20% to AAPL?" If the answer is no, reallocate now. A similar way of framing the question is "Will I allocate over 20% to AAPL moving forward?" Again, if the answer is no, correct your current allocation.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: FirePaddle on August 28, 2014, 03:00:42 PM
I think it really does depend on your comfort level with the risk.  I had about 30% our our investments in Apple and Google, where we already made some good cash on, but I was worrying about it too much.  I sold and transferred into index funds (which appl and goog are usually top stocks in those anyway) but kept some to allow me to still take advantage of the future gains, but not be so impacted if they do go down.

tkurk
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on August 28, 2014, 04:01:58 PM
It's funny and purely emotional.  Since I'm already playing with "house money" so to say, if it dropped 50% I'd be OK with that and just keep holding it, but if I sold it and it went up 50% I'd be very upset because my gut says to hang onto it.  My brain says to take my winning and rebalance.

Gut vs head for me.

And yes, Apple is like 30% of my entire holdings, that is too much in one stock, right?  But the only reason it's 30% is because it's done so well.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: CanuckExpat on August 28, 2014, 04:09:56 PM
And yes, Apple is like 30% of my entire holdings, that is too much in one stock, right?  But the only reason it's 30% is because it's done so well.

That is for you to decide. What does your Investment Policy Statement (http://www.bogleheads.org/wiki/Investment_policy_statement) say?
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: fartface on August 28, 2014, 04:30:07 PM
I'd sell half as long as it keeps you in your current tax bracket. Remember, you'll have to pay capital gains. If it bumps you into the next tax bracket then sell less.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on August 28, 2014, 04:48:33 PM
I'd sell half as long as it keeps you in your current tax bracket. Remember, you'll have to pay capital gains. If it bumps you into the next tax bracket then sell less.

It is held about ⅔ in an IRA and ⅓ in a Roth IRA so selling has no tax consequence for me.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on August 28, 2014, 04:49:48 PM
And yes, Apple is like 30% of my entire holdings, that is too much in one stock, right?  But the only reason it's 30% is because it's done so well.

That is for you to decide. What does your Investment Policy Statement (http://www.bogleheads.org/wiki/Investment_policy_statement) say?

My policy is that I'm an index investor.  This is from before that policy for me.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: matchewed on August 28, 2014, 04:54:13 PM
And yes, Apple is like 30% of my entire holdings, that is too much in one stock, right?  But the only reason it's 30% is because it's done so well.

That is for you to decide. What does your Investment Policy Statement (http://www.bogleheads.org/wiki/Investment_policy_statement) say?

My policy is that I'm an index investor.  This is from before that policy for me.

To be fair your policy should incorporate your current assets. For example in mine I do own some individual shares of companies prior to my decision to use index funds as well. Here is how I've approached it.

Quote
Asset Allocation 95/5 Equity/Bond
Current Equity Allocation
Total US Market 30%   
Large Cap 35%       
Mid to Small Cap 15%   
Individual Stock 20%

Equity Allocation Note As time goes on I will increase my percentage of Total US Market as that will be what I choose to invest in going forward. My percentage of the other sections of my equity allocation will reduce over time.

I've basically accepted the portion that is in individual stock and realized that the portion will become a smaller and smaller percentage of my portfolio as I keep investing. There will be many ways to do it but you should incorporate it into your IPS.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: thedayisbrave on August 28, 2014, 05:36:23 PM
I personally would sell... I mean, you've got a nice tax-free gain there that you can throw to index funds and not have to worry about anymore.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: LAWson on August 28, 2014, 05:58:56 PM
You aint the biggest idiot around. I have over $31k in what people call a "penny stock." I also have close to $30k in a small-cap biotech.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: CanuckExpat on August 28, 2014, 06:29:31 PM
My policy is that I'm an index investor.  This is from before that policy for me.

So then why not sell? It sounds like you will have no tax liability, and I'm assuming the transactions costs are minimal.

If you had $30,000 in cash, and no AAPL stock, would you buy AAPL?
If not, why would you hold onto AAPL stock instead of turning it into $30,000 in cash? (which you could then re-invest according to your policy)

The two scenarios are equivalent, minus taxes, transaction costs, sunk cost fallacy and emotions :)
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Rob on August 28, 2014, 06:57:27 PM
My opinion, which will be rejected by the majority, is that you might as well wait a few months until the iPhone 6 numbers get into the earnings. Can't see it not being a huge success. Event is Sept 9th. Any wearable tech they introduce is gravy.

If it makes you uncomfortable, or are uncomfortable with the company's outlook, sell some.

Full disclosure: I am long AAPL and it is about 28% of my portfolio, which I am not uncomfortable with. I reinvest the dividends and they have had fantastic gains over the last 18 months.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: tarheeldan on August 28, 2014, 08:01:43 PM
I second diesel15's idea - put on a sell stop. If it goes up, move the stop up. Let the gains go, and if you get stopped out then your allocation problem is solved and you did quite well on the trade.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: jzb11 on August 29, 2014, 06:07:55 AM
I have:

20k in Apple
10K in TWTR

This is in a taxable brokerage account, I bought these stocks in may and I'm up 22% on apple and 52% on twitter. I'm not feeling like an idiot at all and at the moment both companies have a major upside. I will hold onto both until the end of the year at the earliest.

I made a calculated decision buying both stocks, my only regret is not buying apple in 2013 when it hit a low of 385 ($55 in the current price which is now at $102)!
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: ZiziPB on August 29, 2014, 06:50:23 AM
I recently sold my AAPL stock.  Here is the discussion surrounding my decision:

http://forum.mrmoneymustache.com/investor-alley/apple-sell-now-or-wait-for-the-stock-split/
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Franklin on August 29, 2014, 07:44:31 AM
I second diesel15's idea - put on a sell stop. If it goes up, move the stop up. Let the gains go, and if you get stopped out then your allocation problem is solved and you did quite well on the trade.

+1   This is always the best way to ride a winner.  So basic, but so rarely used.  I'm not sure I understand the rationale to blindly sell, or for tracking the ratio of individual stocks.

Here is another way to look at it.  You have tripled your money.  Using the Rule of 115, an index fund at 7% CAGR will triple in 16 years.  How long have you owned Apple?  A winner is a winner and should be protected.  But it shouldn't be sold irrationally.  There is a big difference between romanticizing a winner and actually having one.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: soccerluvof4 on August 29, 2014, 09:23:31 AM
^+2 using the Stop. Give the stock a chance to give you further gains while protecting yourself.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: ioseftavi on August 29, 2014, 10:27:49 AM
I'd sell, since you've got great gains and it's not a taxable event.  And I'd sell it all, since you describe yourself as an indexer at present.  This is an enormous allocation to a single stock.  Yes, it's worked out well.  But it's still a huge allocation - generally the rule of thumb I follow is is that you can keep up to 10% of your assets in a single stock, if you work there and acquired the position through an ESOP or performance shares, etc.  Unless you're a C-level exec or manager at AAPL (who is being incentivized through his/her holdings), there's no reason to have so much of your portfolio in one stock.  Pat yourself on the back and take some risk off the table.

Alternately, if that didn't convince you, I have (in the spirit of face-punchyness) also written a ruder version of my advice:

Are you fucking kidding me?  You're not a college student day trading shares of of some penny stock involved in medical marijuana because you think the goddamn ticker's hilarious (http://www.bloomberg.com/quote/HEMP:US).  OK - granted, Apple's not a penny stock.  But this is a third of your investable assets.  You are a mustachian, relentlessly focused on optimizing your portfolio, and getting the best return you can for a chosen level of risk, at the minimum possible expense.  This is not a businesslike way to manage your portfolio.  If you're an indexer, then repent your stock-picking ways, sell the damn stock, and move on with your life.  You can tell the story at cocktail parties for the next decade.  If you're NOT an indexer, then fine - but you should not be holding individual stocks if you haven't got some fundamental analysis showing why you think the hassle and risk of this position is worth it.  "I like their products and I think the iPhone 6 is gonna be a hit" is not valid fundamental analysis.  That's bullshit analysis, and a bullshit reason to continue subjecting yourself to this kind of risk.  $30,000 is not only a third of your investments, it's also an objectively large amount of money.  For most people on the MMM boards, that is probably nearly a year - maybe more - of living expenses.  You're telling me that you'd be zen about if if you knew it was cut in half?  COME.  ON.  Sell the stock, re-invest into your normal asset allocation, and consider it walking out of a casino with some of the house's money.

</rant>

OK, I'm not actually butt-hurt, or shouting at you, Allen.  But I toyed with both versions of this response and couldn't pick one.

My actual "do the logical thing" advice would be to sell it all immediately and re-invest into indexes fitting your asset allocation.  My "human beings are not logical automatons, they are illogical bags of meat" advice would be to sell $20k immediately and hold $10,000.  You'll still feel like you're 'playing the game', but you'll reduce your level of risk to a level that's not insanely high. 

Either way - best of luck!  Let us know what you pick.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: hodedofome on August 29, 2014, 11:42:58 AM
If you decide to go with the stop loss route, it's important to objectively define your exact exit point and actually STICK to it. If you make a mental stop in your head to get out below $90, and it trades below $90 but you decide in the moment to not sell, you've done yourself no favors.

I personally prefer a more intelligent trailing stop than just a dollar amount or a %. Using a moving average or volatility-based trailing stop is much better IMO. It is up to YOU however to determine what your timeframe is. Do you want to let AAPL have a lot of room to gyrate back and forth (which is normal) so it doesn't sell you out prematurely, or will you freak out at anything more than a 10% pullback? Giving it more room allows you to possibly participate in the trend longer, however it also gives up the most $$ when the trend actually ends and starts to go down.

Here is a link to a few different ideas for trailing stops. On the chart is the 50 day moving average in blue (a medium-term MA), a 200 day moving average in red (more long-term) and a volatility-based chandelier exit in green. http://stockcharts.com/h-sc/ui?s=AAPL&p=D&b=5&g=0&id=p52644699979

The chandelier exit uses all the prices from throughout the trading day for the past month and then, as I've defined it here, plots that average price 5x away from today's price. You can see how it trails the uptrend pretty nicely but wouldn't give up too much $$ if the trend stopped. The 50 day moving average is also doing a nice job, and the 200 day ma is pretty far away. You would need to decide, beforehand, which one you want to use and if the price CLOSES below that line at the end of the day, sell it at the market open the next day. There's a lot of noise intra-day and you don't want to get caught up in that, just use closing prices at the end of the day.

Yet another way to go about this, is to look at how AAPL is performing RELATIVE to the rest of the market. Is it doing better than the rest of the market? It may be worth hanging on to. Is it doing worse? May not be a bad time to cash it in. You can plot this on a chart pretty easily and use the same trailing stop methodology that I described above. When AAPL is doing worse than the general market and drops below the 50 or 200 day MA, or the chandelier exit, then sell it. http://stockcharts.com/h-sc/ui?s=AAPL:VTI&p=D&b=5&g=0&id=p93184986897

In any case, if you find yourself watching AAPL's price every day wondering what the heck to do, it may not be a bad idea to just sell out and get on with your life.

 
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: KingCoin on August 29, 2014, 12:58:31 PM
There's not a single rational reason to hold this large a position in AAPL besides a a belief that you know better than the market what the fair price for AAPL stock is (hint: you don't). Every justification listed above for holding the position (including using a stop-loss) is simply to scratch an emotional itch.

A lot of commentors have framed this as an issue of risk tolerance. However, that's not really an accurate assessment.  You can achieve the same expected returns with lower volatility (or higher expected returns with the same volatility) in a more diversified portfolio. Diversification is one of the few free lunches in investing; ignore it at your own peril.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on August 29, 2014, 01:33:08 PM
Don't sell it right now. Mobile payments through the phone wearable, Apple Carplay coming to nearly every new car AND Homekit making that "Home of the Future" thing finally a reality... the product pipeline is about to DEVOUR consumer sucka dollars.

Set a Stop on it. Don't reinvest the dividends, put them elsewhere. Done.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: bluecollarmusician on August 29, 2014, 04:41:24 PM
Yep, it is usually a good idea to sell your winners. 
I probably should have sold Apple the first time it tripled.  Or when it split.  Or when it hit 700.  Or when it split 7 for 1.

I see wisdom in a trailing stop, or selling some call options.  I have done that at several points when the stock seemed a little over value, and I wouldn't have minded selling a few shares at those times.

To each their own.  Do your index investing- I have done plenty of that.  But there is nothing wrong with riding a strong winner. 
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Dicey on August 29, 2014, 06:38:59 PM
I'd sell, since you've got great gains and it's not a taxable event.  And I'd sell it all, since you describe yourself as an indexer at present.  This is an enormous allocation to a single stock.  Yes, it's worked out well.  But it's still a huge allocation - generally the rule of thumb I follow is is that you can keep up to 10% of your assets in a single stock, if you work there and acquired the position through an ESOP or performance shares, etc.  Unless you're a C-level exec or manager at AAPL (who is being incentivized through his/her holdings), there's no reason to have so much of your portfolio in one stock.  Pat yourself on the back and take some risk off the table.

Alternately, if that didn't convince you, I have (in the spirit of face-punchyness) also written a ruder version of my advice:

Are you fucking kidding me?  You're not a college student day trading shares of of some penny stock involved in medical marijuana because you think the goddamn ticker's hilarious (http://www.bloomberg.com/quote/HEMP:US).  OK - granted, Apple's not a penny stock.  But this is a third of your investable assets.  You are a mustachian, relentlessly focused on optimizing your portfolio, and getting the best return you can for a chosen level of risk, at the minimum possible expense.  This is not a businesslike way to manage your portfolio.  If you're an indexer, then repent your stock-picking ways, sell the damn stock, and move on with your life.  You can tell the story at cocktail parties for the next decade.  If you're NOT an indexer, then fine - but you should not be holding individual stocks if you haven't got some fundamental analysis showing why you think the hassle and risk of this position is worth it.  "I like their products and I think the iPhone 6 is gonna be a hit" is not valid fundamental analysis.  That's bullshit analysis, and a bullshit reason to continue subjecting yourself to this kind of risk.  $30,000 is not only a third of your investments, it's also an objectively large amount of money.  For most people on the MMM boards, that is probably nearly a year - maybe more - of living expenses.  You're telling me that you'd be zen about if if you knew it was cut in half?  COME.  ON.  Sell the stock, re-invest into your normal asset allocation, and consider it walking out of a casino with some of the house's money.

</rant>

OK, I'm not actually butt-hurt, or shouting at you, Allen.  But I toyed with both versions of this response and couldn't pick one.

My actual "do the logical thing" advice would be to sell it all immediately and re-invest into indexes fitting your asset allocation.  My "human beings are not logical automatons, they are illogical bags of meat" advice would be to sell $20k immediately and hold $10,000.  You'll still feel like you're 'playing the game', but you'll reduce your level of risk to a level that's not insanely high. 

Either way - best of luck!  Let us know what you pick.

Should MMM ever get around to having one, this response is my candidate for the Mustachian Hall of Fame. An instant classic! Brilliant!
Ioseftavi, I hope to read a lot more from you in the future!
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: skyrefuge on August 29, 2014, 10:29:48 PM
wait a few months until the iPhone 6 numbers get into the earnings. Can't see it not being a huge success. Event is Sept 9th. Any wearable tech they introduce is gravy.
I'm not feeling like an idiot at all and at the moment both companies have a major upside.
Don't sell it right now. Mobile payments through the phone wearable, Apple Carplay coming to nearly every new car AND Homekit making that "Home of the Future" thing finally a reality... the product pipeline is about to DEVOUR consumer sucka dollars.

IMO, the simplistic first-order thinking displayed by those who advocate stock-picking is all you need to know to decide which is the smarter route to take!
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Manguy888 on August 30, 2014, 08:36:38 AM
If this were in a taxable account I would say just hold onto it to avoid capital gains taxes on selling.

BUT - you said your AAPL is in roth and regular IRA. Because of this, I would sell and purchase index funds with the money. congrats, you've tripled your money on what was essentially a bet. Now cash in the chips and diversify for a safer long term investment picture.

apple is clearly a stable company, but the law of large numbers practically guarantees that it will never again triple the way it did with your original 10k investment.

I work for a fortune 500 and realized a few yeras ago that my 401k was way overloaded with my company's stock (it's what they matched with). after I moved it into more diverse investments, the stock practically doubled over 6 months and i lost out. Did I make the wrong move? only if i cared about my short term performance.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Cottonswab on August 30, 2014, 11:26:30 PM
Add Apple to your investment policy statement and specify maximum allocation, as a % of your assets. Then make the reality match your policy.   

I personally limit allocation to individual stocks to < 5% of my total investable assets. 
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Rob on August 31, 2014, 04:41:47 PM
wait a few months until the iPhone 6 numbers get into the earnings. Can't see it not being a huge success. Event is Sept 9th. Any wearable tech they introduce is gravy.
I'm not feeling like an idiot at all and at the moment both companies have a major upside.
Don't sell it right now. Mobile payments through the phone wearable, Apple Carplay coming to nearly every new car AND Homekit making that "Home of the Future" thing finally a reality... the product pipeline is about to DEVOUR consumer sucka dollars.

IMO, the simplistic first-order thinking displayed by those who advocate stock-picking is all you need to know to decide which is the smarter route to take!

I can do the same thing. The only reasons presented by the sell side have been "first-order" thinking that's it's impossible to invest money in a stock that will outperform the market and to do so, even if 70% of your stocks in index funds, is a sure path to a lifetime of market-trailing returns.

"Repeat to yourself: No individual stocks. No individual stocks. No individual stocks. Once you're set for FI, then go ahead and buy individual stocks if you want to gamble a little, but not before."

"Smart move would be to sell it since there would be no tax consequences for doing so. You got lucky and won the mini-lottery. Cash out!"

"I personally would sell... I mean, you've got a nice tax-free gain there that you can throw to index funds and not have to worry about anymore."

If anything, the basic "hold" side arguments have more (albeit incredibly minor) analysis. Indexing vs. stocks has been debated ad infinitum. If he wants to be a 100% index investor, sell. If he want to be a 70% index investor and believes AAPL has a good shot at growing more quickly than the average, then hold.

Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: KingCoin on August 31, 2014, 05:10:04 PM
wait a few months until the iPhone 6 numbers get into the earnings. Can't see it not being a huge success. Event is Sept 9th. Any wearable tech they introduce is gravy.
I'm not feeling like an idiot at all and at the moment both companies have a major upside.
Don't sell it right now. Mobile payments through the phone wearable, Apple Carplay coming to nearly every new car AND Homekit making that "Home of the Future" thing finally a reality... the product pipeline is about to DEVOUR consumer sucka dollars.

IMO, the simplistic first-order thinking displayed by those who advocate stock-picking is all you need to know to decide which is the smarter route to take!

I can do the same thing. The only reasons presented by the sell side have been "first-order" thinking that's it's impossible to invest money in a stock that will outperform the market and to do so, even if 70% of your stocks in index funds, is a sure path to a lifetime of market-trailing returns.

"Repeat to yourself: No individual stocks. No individual stocks. No individual stocks. Once you're set for FI, then go ahead and buy individual stocks if you want to gamble a little, but not before."

"Smart move would be to sell it since there would be no tax consequences for doing so. You got lucky and won the mini-lottery. Cash out!"

"I personally would sell... I mean, you've got a nice tax-free gain there that you can throw to index funds and not have to worry about anymore."

If anything, the basic "hold" side arguments have more (albeit incredibly minor) analysis. Indexing vs. stocks has been debated ad infinitum. If he wants to be a 100% index investor, sell. If he want to be a 70% index investor and believes AAPL has a good shot at growing more quickly than the average, then hold.

While the advocates of selling may be doing first-order analysis, it's first-order analysis based on sound theory. A diverse portfolio of stocks has the same expected return as a concentrated portfolio, but with lower volatility. This makes holding a concentrated portfolio a categorical error.

Saying the stock is probably going to go up because the iPhone 6 is going to be cool isn't sound theory, it's hand waving.

Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Rob on September 01, 2014, 08:58:59 PM
wait a few months until the iPhone 6 numbers get into the earnings. Can't see it not being a huge success. Event is Sept 9th. Any wearable tech they introduce is gravy.
I'm not feeling like an idiot at all and at the moment both companies have a major upside.
Don't sell it right now. Mobile payments through the phone wearable, Apple Carplay coming to nearly every new car AND Homekit making that "Home of the Future" thing finally a reality... the product pipeline is about to DEVOUR consumer sucka dollars.

IMO, the simplistic first-order thinking displayed by those who advocate stock-picking is all you need to know to decide which is the smarter route to take!

I can do the same thing. The only reasons presented by the sell side have been "first-order" thinking that's it's impossible to invest money in a stock that will outperform the market and to do so, even if 70% of your stocks in index funds, is a sure path to a lifetime of market-trailing returns.

"Repeat to yourself: No individual stocks. No individual stocks. No individual stocks. Once you're set for FI, then go ahead and buy individual stocks if you want to gamble a little, but not before."

"Smart move would be to sell it since there would be no tax consequences for doing so. You got lucky and won the mini-lottery. Cash out!"

"I personally would sell... I mean, you've got a nice tax-free gain there that you can throw to index funds and not have to worry about anymore."

If anything, the basic "hold" side arguments have more (albeit incredibly minor) analysis. Indexing vs. stocks has been debated ad infinitum. If he wants to be a 100% index investor, sell. If he want to be a 70% index investor and believes AAPL has a good shot at growing more quickly than the average, then hold.

While the advocates of selling may be doing first-order analysis, it's first-order analysis based on sound theory. A diverse portfolio of stocks has the same expected return as a concentrated portfolio, but with lower volatility. This makes holding a concentrated portfolio a categorical error.

Saying the stock is probably going to go up because the iPhone 6 is going to be cool isn't sound theory, it's hand waving.

I didn't interpret the OP's topic as yet another question on individual stocks vs. indexing as it seems they have already come to the conclusion that indexing is what they want to do with the majority of their portfolio. However, they are still bullish on AAPL's long-term prospects and still want to keep a portion of their portfolio in AAPL.

Perhaps 23% is too much, I don't think anyone would argue if the OP wanted to reduce that %, but I don't agree that it is impossible to analyze a company like AAPL and to come to the conclusion that it is more likely to appreciate at a faster rate than the SP500. I don't think keeping something like 10% in the stock is crazy. It's not like it's TSLA. AAPL has billions upon billions of dollars that it will be leveraging and paying to investors for many years to come. I can also say that simply stating it's impossible to allocate a % of your portfolio to an asset that will beat the index is hand-waving. You may not agree with a certain strategy, but that doesn't mean that it will ultimately fail.

As an aside, my post didn't say that I thought the iPhone 6 was cool so buy AAPL. A successful product is a term you can benchmark and forecast, both in terms of revenue and earnings. It's different than saying it will be cool. If you are saying it is unlikely to correctly forecast such things, then I fundamentally disagree. If you want to go to the second level of thought, and believe the stock price is based on others "forecasts of the forecasts" etc., and that it is impossible to know what will be viewed as a success, I again disagree. Which is completely fine, and I think indexing is a fantastic strategy in general and the one I recommend in most cases.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: skyrefuge on September 02, 2014, 10:23:33 AM
The only reasons presented by the sell side have been "first-order" thinking that's it's impossible to invest money in a stock that will outperform the market and to do so, even if 70% of your stocks in index funds, is a sure path to a lifetime of market-trailing returns.

Yeah, I actually agree with you, to the extent that there are surely tons of people out there who index simply because "someone (dad, financial advisor, colleague, MMM) told me it was a good idea". But that's part of the beauty of indexing: smarter people have already figured it out for you, so knowledge of the underlying theories are not actually required to be successful. In contrast, to be a market-beating stock-picker, you personally must be smarter than everyone else and have deep knowledge of the underlying systems.

If coming to a decision to fly somewhere, the first-order-thinking stock-picker might say "birds have feathers on their arms, so if I glue feathers to my arms and jump off a cliff, I'll be able to fly!" While the first-order-thinking indexer, who is equally ignorant about the laws of physics, says "lots of people seem to have success flying in airplanes, so I'll just buy a ticket on United". One is much more likely to have a successful flight than the other. (and of course this is not to say that the cliff-jumping strategy (http://en.wikipedia.org/wiki/Wingsuit_flying) is completely impossible, if the requisite higher-order thinking is actually employed.)

I just cringe whenever I see amateur stock-pickers who seem to think that buying "good, solid companies" is the trick to avoiding risk and beating the market, when it's "companies that are secretly gooder and solider than everyone else thinks they are" that's required.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Northerly on September 02, 2014, 11:25:49 AM
Man, all this irrational exuberance about AAPL has me thinking I should short it ;).
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Rob on September 02, 2014, 05:56:55 PM
The only reasons presented by the sell side have been "first-order" thinking that's it's impossible to invest money in a stock that will outperform the market and to do so, even if 70% of your stocks in index funds, is a sure path to a lifetime of market-trailing returns.

Yeah, I actually agree with you, to the extent that there are surely tons of people out there who index simply because "someone (dad, financial advisor, colleague, MMM) told me it was a good idea". But that's part of the beauty of indexing: smarter people have already figured it out for you, so knowledge of the underlying theories are not actually required to be successful. In contrast, to be a market-beating stock-picker, you personally must be smarter than everyone else and have deep knowledge of the underlying systems.

If coming to a decision to fly somewhere, the first-order-thinking stock-picker might say "birds have feathers on their arms, so if I glue feathers to my arms and jump off a cliff, I'll be able to fly!" While the first-order-thinking indexer, who is equally ignorant about the laws of physics, says "lots of people seem to have success flying in airplanes, so I'll just buy a ticket on United". One is much more likely to have a successful flight than the other. (and of course this is not to say that the cliff-jumping strategy (http://en.wikipedia.org/wiki/Wingsuit_flying) is completely impossible, if the requisite higher-order thinking is actually employed.)

I just cringe whenever I see amateur stock-pickers who seem to think that buying "good, solid companies" is the trick to avoiding risk and beating the market, when it's "companies that are secretly gooder and solider than everyone else thinks they are" that's required.

I've said that I think indexing is a fantastic strategy in general, so I'm mostly in agreement with you. But I don't think that choosing one stock that will beat the market is as impossible or unlikely as most people on this forum make it out to be. Consistently doing so time and time again with hundreds of different stocks over a lifetime of investing is a different debate to me.

I'm also not sure I understand why higher-order thinking applies to a single stock but not to an index. All those stocks in an index are priced based on the supposed higher level thinking. If your answer is diversification, then I would argue that I don't believe a portfolio that has 80-90% or whatever indexed and the remainder in a few stocks that you feel great about as undiversified. I think the higher-order thinking is and over-intellectualization. It's not impossible to get a feeling for the overall sentiment on a stock. If you feel differently than the sentiment, you can invest based on that. Apple is a perfect example of this. About 18 months ago, it was pretty easy to determine the sentiment on AAPL was not great. It's PE was lower than 12. I don't need to think anything besides, hey - that P/E is really low. The market is not feeling to great about AAPLs prospects continue to grow. On the other hand, I feel great about AAPLs growth prospects. So I invest. There is no second-order thought needed there. If AAPL continues to grow, it's going up (from that point in 2012). No doubt about it.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on September 09, 2014, 10:07:30 AM
I had a sell order entered but never actually clicked "place order"

I just couldn't bring myself to do it.

I wanted to publicly go on record prior to the event as having not sold my AAPL shares yet so that I can get either "you idiot" face punches or "you LUCKY idiot" face punches.

Carry on.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Franklin on September 09, 2014, 11:42:58 AM
I had a sell order entered but never actually clicked "place order"

I just couldn't bring myself to do it.

I wanted to publicly go on record prior to the event as having not sold my AAPL shares yet so that I can get either "you idiot" face punches or "you LUCKY idiot" face punches.

Carry on.

Did you at least put in your stop order?  Then let it ride baby!
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: solon on September 09, 2014, 02:04:16 PM
AAPL closed down today!
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: vivophoenix on September 09, 2014, 02:12:42 PM
so did all my spartan index funds....
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on December 01, 2014, 05:13:49 PM
Still haven't sold.

I just can't do it.  I believe too strongly in the company.  So that means I know I've 'fallen in love with the stock' and Jim Cramer's advice of 'bears make money, bulls make money, pigs get slaughtered' puts me squarely in the pigs camp.

But I can't do it.

The thread title is wrong though, now it's $36,000 in AAPL stock.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Cecil on December 01, 2014, 08:11:34 PM
If you didn't have this position, and you came into $36k in cash tomorrow, would you put it all into AAPL?

When deciding on an asset allocation, you should ignore your current positions and treat your entire portfolio as though it were cash (barring tax purposes).

Don't continue to hold stock just because you have held it in the past. Hold stock because you truly believe it's the best place for your money.

What you are doing is gambling, not investing.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: sol on December 01, 2014, 09:52:19 PM
36k is a relatively small amount by financial independence standards. I'd probably be okay with a one time ever gamble of that magnitude.

Except this isn't a one time gamble of $36k, because Apple's enormous market cap makes it a significant percentage of whatever index you're buying.  If you also have a million dollars in VTSAX and Apple goes to zero, you're out your $36k in stock plus another $30k off the top of your million dollars of index, since Apple is about 3% of the entire market right now. 

All of us who buy index funds are already overweighted on AAPL, so buying additional shares outright seems like foolhardy risk concentration to me.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on December 02, 2014, 01:58:21 PM
It IS foolish!  I know it!  I'm being ruled by emotion on this one.

We often ask the question of risk tolerance in terms of 'can you sleep at night'.  For me right now selling AAPL would cause me to sleep worse than not selling AAPL. 

I've held it through multiple 50% drops in value.  It doesn't even phase me, but the amount I sold a few years ago burns my brain because it would be worth so much more than what I did with it. (I took out my initial investment in AAPL which was just over $5k).

In a few years, my yearly dividends may start to pay out my entire initial investment every year.  Or it could go to zero.

I'm torn between head and heart here.  I KNOW what is smart.  Usually that means I do what is smart, but I just can't click sell on this one and it's my face-punch worthy weakness.

Other details:
IRA $73k in VTSAX. 
Roth IRA $12k in AAPL,
IRA#2 $24k in AAPL. 
401k $31k in 75% US low cost index fund and 25% in low cost international index fund
IRA#3 (wife's) $8k 50% VHT (vanguard health care index) and 50% VDE (vanguard energy index)

Total value of portfolio: just under $150k of which AAPL is at least 24% not counting the amounts in the index funds.

So bottom line, I put in money, got VERY LUCKY, already took out most of my initial investment, and now I feel like I should just 'let it ride with the houses money' but I know that is stupid.

Can I just sell a third of it?
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: rmendpara on December 02, 2014, 02:36:31 PM
No reason to sell it all, and I completely understand how it feels to be playing with "house money" at this point since you've seen some seriously stupid returns since buying. You've probably felt like a genius at one point.

Personally, I don't know where I'd see the biggest return. Given you invested 10k originally, I'd sell at least 10k and reinvest elsewhere.

I know I'm giving away a bit of a secret (sarcasm), but no one ever lost money taking a profit.

The fact is that investing isn't about striking the lottery, but it is certainly about finding a strategy that will help you achieve positive returns over the long term. For example, I have included in my personal investment strategy, that I will sell at least 1/3 of a position if I see a 100% price gain. It hasn't happened yet, but I have exceeded 80% on several holdings (AAPL is among the handful of winners in this camp).

My reasoning is that I need to get paid, and if I never sell, then I never get paid.

Holding is not a rational investment decision, but you already admitted that. So... party?
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on December 02, 2014, 03:41:15 PM
I'm selling at 120. I promise. Really I will.

...

Or maybe I should hold it until the capital gains are long term... I don't even know. I just know it's very, very hard to let go of something that has gone up 15% in two months.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: libertarian4321 on December 02, 2014, 03:53:57 PM
It's funny and purely emotional.  Since I'm already playing with "house money" so to say, if it dropped 50% I'd be OK with that and just keep holding it, but if I sold it and it went up 50% I'd be very upset because my gut says to hang onto it.  My brain says to take my winning and rebalance.

Gut vs head for me.

And yes, Apple is like 30% of my entire holdings, that is too much in one stock, right?  But the only reason it's 30% is because it's done so well.

If you had a million dollar+ portfolio, holding $31k in Apple would not be a big deal.

If it's 30% of your portfolio, you are playing with fire.  This ain't the first time Apple stock was "hot."  It has had spectacular rises, and equally spectacular crashes, a number of times in the past. 

If you fall in love with a stock (and it's easy to do when it's hot), you'll probably end up getting burned, because no stock stays hot forever.  I've made the same mistake in the past.  Apple is the rare company that has managed to survive multiple spectacular rises and falls, but it's highly unlikely that it will continue spectacular growth forever.  I can name exactly ZERO companies that have managed to do so decade after decade.

I'm not saying sell it all, but you might want to pare it back a bit.  Take those profits and diversify into some alternative stocks- preferably outside of the tech sector.

Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Rob on December 02, 2014, 08:21:30 PM
I was on board with you holding earlier. Here are my thoughts.

I think AAPL is much closer to a fair valuation at this point. Still plenty of potential upside, but much more downside if numbers disappoint (I don't think they will). I think Q1 is going to be an amazing quarter for AAPL and should easily beat expectations, the problem is where do they go from there--and that's the question that will be on everyone's mind once the iPhone 6 tapers. Until investors know how good Apple Watch is, which won't be clear for a couple quarters, the legitimate fear of how difficult it will be to comp the 6 will probably keep the stock from soaring up to those $140-$150+ price targets.

I have owned Apple since 2006 and have added to my position many times and I am just now starting to get to a point where I am going to consider selling some. I am in a similar situation with about 31% in Apple. I don't think there is much downside before Q1 reports, so I will likely hold until slightly after that (plus getting the gains in the next year) unless I see another opportunity I want the money for. After Q1, if I sell, I don't anticipate selling more than half my shares. Since I am in exactly the same situation, I suppose that is my advice, although if you are less risk tolerant it would be a good idea to sell some. I don't think you can go wrong by selling 1/3 now.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Druid on December 02, 2014, 10:19:45 PM
"I think you should also factor in the tax consequences of selling them.

If you are in the 15% tax bracket you should sell them

If you are in the 25 to 35% tax brackets your will have to pay $3000 in taxes on $20,000 gain.

If you are in the 39.6% bracket you will have to pay $4000 in taxes on your $20,000 gain.

I would start indexing from here on out and look for loss opportunities in your various index funds to offset the capital gains that you will incur while selling them. You will likely have to sell your apple stock in small batches to be tax efficient. On the other hand if you are risk adverse you may just want to sell them. The risk in your "portfolio" is immense."

Is what I would say if they were not in an IRA. I have poor reading comprehension and initially missed the IRA part. You should move the money to an index fund. I don't try to predict stocks, but 90% of unexperienced investors throw money blindly at Apple and that can't be good.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: sol on December 02, 2014, 10:48:50 PM
"I think you should also factor in the tax consequences of selling them.

If you are in the 15% tax bracket you should sell them

If you are in the 25 to 35% tax brackets your will have to pay $3000 in taxes on $20,000 gain.

If you are in the 39.6% bracket you will have to pay $4000 in taxes on your $20,000 gain.

Let's not forget that capital gains are taxed marginally, just like your income is, and you don't pay LTCG on the return of your principal.

If your income is currently below the limit of the 15% tax bracket, you can sell enough stock top out the bracket and still pay zero LTCG.  Any additional LTCG you incur between the top of the 15% bracket and the top of the top of the 25% bracket will be taxed at 15%.  So if you're MFJ and earn $50k/year, you could sell up to $23,800 in gains and pay zero taxes. 

Remember that the price you paid when you bought the stock isn't taxed, only the gain.  So if you bought $10k of stock that had over a 100% run up and is now now worth $23.8k, you would only be incurring LTCG on the $13.8k gain.  Which in the above example of $50k of income would not be taxed at all because you would still be well below the top of the 15% tax bracket.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: josstache on December 03, 2014, 04:17:11 AM
I agree with those asking if you had $36k cash right now, whether you would buy the stock at its current price.  http://en.wikipedia.org/wiki/Endowment_effect

For a different line of argument, as Kahneman himself would point out, the main reason to buy a stock, or hold one when transaction costs are zero, is if it is currently undervalued.  My personal view is that Apple is more likely to be overvalued than undervalued in part due to individual investors who own it for the wrong reasons (e.g., "I think Apple is a good company," or "I missed out on buying it 10 years ago but at least I own it now!")
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: rmendpara on December 03, 2014, 09:20:38 AM
"I think you should also factor in the tax consequences of selling them.

If you are in the 15% tax bracket you should sell them

If you are in the 25 to 35% tax brackets your will have to pay $3000 in taxes on $20,000 gain.

If you are in the 39.6% bracket you will have to pay $4000 in taxes on your $20,000 gain.

Let's not forget that capital gains are taxed marginally, just like your income is, and you don't pay LTCG on the return of your principal.

If your income is currently below the limit of the 15% tax bracket, you can sell enough stock top out the bracket and still pay zero LTCG.  Any additional LTCG you incur between the top of the 15% bracket and the top of the top of the 25% bracket will be taxed at 15%.  So if you're MFJ and earn $50k/year, you could sell up to $23,800 in gains and pay zero taxes. 

Remember that the price you paid when you bought the stock isn't taxed, only the gain.  So if you bought $10k of stock that had over a 100% run up and is now now worth $23.8k, you would only be incurring LTCG on the $13.8k gain.  Which in the above example of $50k of income would not be taxed at all because you would still be well below the top of the 15% tax bracket.

Looks like all of his AAPL stock is within a IRA and a Roth.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Aggie1994 on December 03, 2014, 09:57:39 AM
I own 140 shares of AAPL (originally 20 shares thank you 7 for 1)

We have ridden out the waves with Apple for almost 2 years because we are in a taxable account and we believe in the company.

$150 is our sell point. (keep in mind we bought at $72 & 90 on our two different traunches) (which would be $1,050 fyi pre-split)

We also hold Facebook in that account and plan to hold it for at least a year. We sold SBUX at 75 on a stop limit because we saw it get up to $82 and then fall back down. Original cost was $42/share.

I would hold AAPL until after Christmas and reports come out because their Iphone 6 sales are targetted to be 71 Million.

This account for me is a "fun account" if you will and I have a very diversified 401k account.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: ZiziPB on December 03, 2014, 10:40:27 AM
I own 140 shares of AAPL (originally 20 shares thank you 7 for 1)

We have ridden out the waves with Apple for almost 2 years because we are in a taxable account and we believe in the company.

$150 is our sell point. (keep in mind we bought at $72 & 90 on our two different traunches) (which would be $1,050 fyi pre-split)

We also hold Facebook in that account and plan to hold it for at least a year. We sold SBUX at 75 on a stop limit because we saw it get up to $82 and then fall back down. Original cost was $42/share.

I would hold AAPL until after Christmas and reports come out because their Iphone 6 sales are targetted to be 71 Million.

This account for me is a "fun account" if you will and I have a very diversified 401k account.

I sold  ~$86K worth of AAPL stock a few months ago and bought Total Stock Market Mutual Fund instead.  Now I don't have to worry about the ups and downs of the Iphone sales, Ipad sales, Itunes lawsuits, etc...  It was definitely the right decision.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on December 03, 2014, 12:18:24 PM
I own 140 shares of AAPL (originally 20 shares thank you 7 for 1)

We have ridden out the waves with Apple for almost 2 years because we are in a taxable account and we believe in the company.

$150 is our sell point. (keep in mind we bought at $72 & 90 on our two different traunches) (which would be $1,050 fyi pre-split)

We also hold Facebook in that account and plan to hold it for at least a year. We sold SBUX at 75 on a stop limit because we saw it get up to $82 and then fall back down. Original cost was $42/share.

I would hold AAPL until after Christmas and reports come out because their Iphone 6 sales are targetted to be 71 Million.

This account for me is a "fun account" if you will and I have a very diversified 401k account.

I sold  ~$86K worth of AAPL stock a few months ago and bought Total Stock Market Mutual Fund instead.  Now I don't have to worry about the ups and downs of the Iphone sales, Ipad sales, Itunes lawsuits, etc...  It was definitely the right decision.
It was the responsible decision, but it was not the right decision- if making money is your goal.

APPL is up over 15% in the last 60 days. The broader market is not.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: josstache on December 04, 2014, 04:13:24 AM
Determining the right decision with the benefit of hindsight is not really fair.  If ZiziPB knew or should have known that Apple would outperform and sold Apple anyway, that would be the wrong decision. 

Otherwise the "right" decision is to go to a casino and bet on whatever number the roulette wheel is about to reward (but not before loading up on tickets with the winning Powerball number).
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: FIRE4Science on December 04, 2014, 06:12:54 AM
@Dianne C

Index funds are full of stocks, and managed by a person who is gambling with their clients money and putting the risk on to the clients.

Why not take charge and make your own diversified portfolio? That why you determine the gains/losses, when to buy low or sell high; and if you can keep emotions out of it and observe the economics of all industries occasionally and passively, you can make money from a lot of individual stocks.

Anyone can also start up a "Fund" and get clients to invest in it for 0.50% fees/yr. Then show them historic numbers, so the clients build trust in your fund more and more and invest more and more. As the fund accounts grow toward $1Trillion, your 0.50% pays you nicely ($5 Billion per year), while all the risk is on your clients' money. This is the Art of Hedge Fund Management.

On top of it, the clients have proxyed their voting power for the stocks to your fund management. This entices CEO's of the 500 or so companies your fund invests in to bribe you with free meals, invitations to their mansions and companies, board positions, and so forth for you to not vote against their board policies. Number One Policy always showing up is the increase to CEO pay. If you have ever owned an individual stock (outside of a fund), you will get an invite to vote. This vote is always set to the "for" position to increase CEO pay, as well as many other things for the benefit of the board members acting on behalf of the company only on occasion. As a fund manager with a lot of shares giving power to you to vote, all you have to do is not vote "against" their wishes in return for all the rewards they bestow upon you. (as you continue to collect 0.50% on the dollar in your fund per year.) You have become a modern King of the realm.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: matchewed on December 04, 2014, 07:59:38 AM
@Dianne C

Index funds are full of stocks, and managed by a person who is gambling with their clients money and putting the risk on to the clients.

All investing has the risk on the person investing. When you invest in individual stocks you're the one taking on the risk. When you invest in index funds you're the one taking on the risk. What's your point?

Why not take charge and make your own diversified portfolio? That why you determine the gains/losses, when to buy low or sell high; and if you can keep emotions out of it and observe the economics of all industries occasionally and passively, you can make money from a lot of individual stocks.

Because apparently people with way more resources and time than you do what you're saying and fail against a market comparison with alarming regularity. You actually don't get to determine the gains or the losses oddly enough. You get to determine only what has happened in the past as an acceptable event, you're just reacting to events rather than making a solid plan for wealth growth. You can make a great deal of money from individual stocks, you can also lose a great deal of money from individual stocks, and much like I said in the beginning of this paragraph what makes you think that your resources in determining the "economics of all industries occasionally and passively" is going to be greater than someone with actual greater resources?

Anyone can also start up a "Fund" and get clients to invest in it for 0.50% fees/yr. Then show them historic numbers, so the clients build trust in your fund more and more and invest more and more. As the fund accounts grow toward $1Trillion, your 0.50% pays you nicely ($5 Billion per year), while all the risk is on your clients' money. This is the Art of Hedge Fund Management.

There is a distinct difference between a hedge fund and an index fund. Hedge funds are proven to be (primarily) a losing option. Index funds so far beat hedge funds most of the time. You're conflating two different things. There are more differences but I don't think I need to get into all of them. The point is you're trying to advocate individual stock ownership as a magic cure-all to the risks associated with hedge/index funds. But everything you've brought up is inherent in picking individual stocks. The risk that is mitigated by index investing vs. individual stock ownership is that you're more diversified with index fund investing than with individual stocks. If an individual stock fails it won't affect the index greatly (even Apple), but if a large percentage of your portfolio is Apple because you observed the economics of that industry and missed something on your analysis then you lose that large percentage. There is greater risk in losing a large percent of your portfolio when you focus on individual stocks.

On top of it, the clients have proxyed their voting power for the stocks to your fund management. This entices CEO's of the 500 or so companies your fund invests in to bribe you with free meals, invitations to their mansions and companies, board positions, and so forth for you to not vote against their board policies. Number One Policy always showing up is the increase to CEO pay. If you have ever owned an individual stock (outside of a fund), you will get an invite to vote. This vote is always set to the "for" position to increase CEO pay, as well as many other things for the benefit of the board members acting on behalf of the company only on occasion. As a fund manager with a lot of shares giving power to you to vote, all you have to do is not vote "against" their wishes in return for all the rewards they bestow upon you. (as you continue to collect 0.50% on the dollar in your fund per year.) You have become a modern King of the realm.

Actually if you're the owner of an individual stock it would make rational sense for you to vote on the increase of CEO pay as well, this is not something isolated to fund management. If things benefit the company, then the company increases shareholder value.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: MooseOutFront on December 04, 2014, 08:07:02 AM
@Dianne C

Index funds are full of stocks, and managed by a person who is gambling with their clients money and putting the risk on to the clients.

You're talking about actively managed mutual funds, but calling them index funds.  Big difference. 
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on December 04, 2014, 08:54:23 AM
I appreciate all the advice on this thread.

I finally did it, although I feel nearly sick to my stomach. 

"it" is only selling 100 out of my 310 shares.  But I did it.

I believe I'll live to regret the decision, but if I use my brain, it was a rational, conservative move.  The funds freed up have gone to vanguard international etf's because I'm light international in my allocation.

Ugh.  Sometimes you just have to take some profits.  I'll be looking at trimming a second third sometime after the new year.  I will probably never sell the third third just because I love the stock the so much and love watching all the news and volatility.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on December 04, 2014, 08:56:20 AM
Determining the right decision with the benefit of hindsight is not really fair.
Of course it isn't. The majority of the time, indexing the market will result in higher returns. The longer the period of time, the more true this is.

However, we DO have the benefit of hindsight in this case, and this particular example reveals indexings tradeoff: Successful growth stocks will often outperform the market index by large margins. The trick is successfully picking those stocks, which mostly comes down to luck and not science.

But when you pick a winner, you win big. APPL in this case is one such winner, and it doesn't appear to be losing steam any time soon. The iPhone 6 was way bigger than anyone thought it would be.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: ZiziPB on December 04, 2014, 09:14:39 AM
Determining the right decision with the benefit of hindsight is not really fair.
Of course it isn't. The majority of the time, indexing the market will result in higher returns. The longer the period of time, the more true this is.

However, we DO have the benefit of hindsight in this case, and this particular example reveals indexings tradeoff: Successful growth stocks will often outperform the market index by large margins. The trick is successfully picking those stocks, which mostly comes down to luck and not science.

But when you pick a winner, you win big. APPL in this case is one such winner, and it doesn't appear to be losing steam any time soon. The iPhone 6 was way bigger than anyone thought it would be.
I held the stock since 2000 and it went from ~$5K to $86K so I think I did OK with it ;-)  For me it was the right decision to sell and to invest in index funds in accordance with my AA.  Continuing to hold a large position in one company started to feel like gambling.  I have no regrets about selling and reinvesting the proceeds because it reduced the risk of my portfolio to a level that works for me.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: matchewed on December 04, 2014, 09:18:47 AM
I appreciate all the advice on this thread.

I finally did it, although I feel nearly sick to my stomach. 

"it" is only selling 100 out of my 310 shares.  But I did it.

I believe I'll live to regret the decision, but if I use my brain, it was a rational, conservative move.  The funds freed up have gone to vanguard international etf's because I'm light international in my allocation.

Ugh.  Sometimes you just have to take some profits.  I'll be looking at trimming a second third sometime after the new year.  I will probably never sell the third third just because I love the stock the so much and love watching all the news and volatility.

Bolded for emphasis.

Regrets are funny things. Usually not worthwhile to engage in unless there is some lesson to be learned. So learn whatever lesson can be taught and move on. Like other basic investing advice stick with diversification, low fees, and a high savings rate. This will protect you from most risks out there that your portfolio can encounter. It is entirely possible to pick an outlier strategy and hit it big. But stepping back and looking at the situation rationally may lead you to realize that this time the regret is just some weird attachment to money (or the accumulation of it).

It seems odd that I seem to be advocating that the accumulation of wealth is not the point of all this (I do advocate that). It is just a means to an end. That end is what you should be comparing your choices to. Does owning Apple stock aid towards that end? Does it have any possible risks which may harm that end? Any sort of regret that you may feel if Apple goes up another 10% is not necessarily a learning scenario as it is a human flaw in our brains weighing importance of money and the gaining of it being related to some "success". You'll be successful regardless of what Apple stock does or the indices you've selected as long as you focus on your goal and the actions that you control which can get you there. The rest of it is all learning about risks and mitigating them. IMO you mitigated a huge risk today by increasing your diversification in spite of your emotional attachment to Apple stock.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Franklin on December 04, 2014, 09:24:09 AM
I appreciate all the advice on this thread.

I finally did it, although I feel nearly sick to my stomach. 

"it" is only selling 100 out of my 310 shares.  But I did it.

I believe I'll live to regret the decision, but if I use my brain, it was a rational, conservative move.  The funds freed up have gone to vanguard international etf's because I'm light international in my allocation.

Ugh.  Sometimes you just have to take some profits.  I'll be looking at trimming a second third sometime after the new year.  I will probably never sell the third third just because I love the stock the so much and love watching all the news and volatility.

Impressed on many levels.  You held onto part of a wonderful company, you took some winnings, you bought into a down sector.  Good job.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on December 04, 2014, 09:43:24 AM
Thanks again everyone.  Just making a note here that I sold for $116.62/share x 100 shares, so I can come and either be relieved or kick myself later :)
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: rmendpara on December 04, 2014, 10:07:47 AM
I appreciate all the advice on this thread.

I finally did it, although I feel nearly sick to my stomach. 

"it" is only selling 100 out of my 310 shares.  But I did it.

I believe I'll live to regret the decision, but if I use my brain, it was a rational, conservative move.  The funds freed up have gone to vanguard international etf's because I'm light international in my allocation.

Ugh.  Sometimes you just have to take some profits.  I'll be looking at trimming a second third sometime after the new year.  I will probably never sell the third third just because I love the stock the so much and love watching all the news and volatility.

Do you expect the 20k-ish remaining position to be less than 10% of your portfolio within 5-10 years? I personally see no reason not to take concentrated and calculated risks.

In a portfolio, you don't necessarily have to be "perfectly" diversified at every single point in time. When I first started investing, I was about 50% in REITs, but that was also because my portfolio was barely 20k at the time. Now, it's less than 5%, and I didn't sell any of those. I'm actually looking to add.

ANyway, my point is that there's no rush to sell ALL of your stock, but just be sure that you see a more reasonable allocation within a few years.

Just be careful about falling in love with or irrationally hating a stock or company. It clouds your judgment.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on December 04, 2014, 01:46:31 PM
Unless it grows dramatically, I expect the remaining 200 shares to be worth less than 10% of my total portfolio in less than 2 years (adding about $41k/yr+ to investments)
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: ZiziPB on December 04, 2014, 02:12:21 PM
If you had $23K in hand today (in addition to your other funds that you invest anyway), would you buy AAPL with it?
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: rubybeth on December 04, 2014, 02:32:47 PM
If you had $23K in hand today (in addition to your other funds that you invest anyway), would you buy AAPL with it?

I feel like this is not the right question, because he didn't pay $116/share when he originally bought the stock, so he probably wouldn't buy it at that price, but if, say, right now you could buy the stock at $50/share and then turn around and sell it for $116/share, then yes, he probably would do the same thing again.

Full disclosure, I'm holding some AAPL that was a gift, and it's kind of my 'fun money' and I don't plan on selling it, but am also not banking on it being there when I retire, which is quite a way off anyway. Also, I'm getting some dividends from it.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: ZiziPB on December 04, 2014, 02:37:24 PM
I think that is absolutely the right question.  He can take the gains from it today (sell at 116).  So it only matters how the stock will perform in the future (116 is the starting point). 
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on December 04, 2014, 03:22:35 PM
If you had $23K in hand today (in addition to your other funds that you invest anyway), would you buy AAPL with it?

I actually might.  It has been difficult not to continue buying AAPL even at these prices, not because I believe in future massive growth but instead continued massive profits and increased dividends and stock repurchases making a long term continued source of value.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: ZiziPB on December 04, 2014, 03:31:26 PM
If you had $23K in hand today (in addition to your other funds that you invest anyway), would you buy AAPL with it?

I actually might.  It has been difficult not to continue buying AAPL even at these prices, not because I believe in future massive growth but instead continued massive profits and increased dividends and stock repurchases making a long term continued source of value.
If that is the case, it sounds like you really believe that the stock will go up from today's levels and are willing to take the associated risk.  So I think you should hold on to it.  When I asked myself that question back in August, my answer was "definitely not", so I sold and invested the proceeds in accordance with my desired asset allocation.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Dicey on December 04, 2014, 09:30:20 PM
@Dianne C

Index funds are full of stocks, and managed by a person who is gambling with their clients money and putting the risk on to the clients.

Why not take charge and make your own diversified portfolio? That why you determine the gains/losses, when to buy low or sell high; and if you can keep emotions out of it and observe the economics of all industries occasionally and passively, you can make money from a lot of individual stocks.

Anyone can also start up a "Fund" and get clients to invest in it for 0.50% fees/yr. Then show them historic numbers, so the clients build trust in your fund more and more and invest more and more. As the fund accounts grow toward $1Trillion, your 0.50% pays you nicely ($5 Billion per year), while all the risk is on your clients' money. This is the Art of Hedge Fund Management.

On top of it, the clients have proxyed their voting power for the stocks to your fund management. This entices CEO's of the 500 or so companies your fund invests in to bribe you with free meals, invitations to their mansions and companies, board positions, and so forth for you to not vote against their board policies. Number One Policy always showing up is the increase to CEO pay. If you have ever owned an individual stock (outside of a fund), you will get an invite to vote. This vote is always set to the "for" position to increase CEO pay, as well as many other things for the benefit of the board members acting on behalf of the company only on occasion. As a fund manager with a lot of shares giving power to you to vote, all you have to do is not vote "against" their wishes in return for all the rewards they bestow upon you. (as you continue to collect 0.50% on the dollar in your fund per year.) You have become a modern King of the realm.

FIRE4Science, Diane C here. Based on the way you wrote your comment, it is being quoted by others and looks as if it's something I said, which I do not believe it is. Are you responding to something I wrote earlier in this thread? If so, can you include a specific quote? I'd like to respond, but I don't know how/where to start. Thanks!
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Rob on December 05, 2014, 07:32:27 PM
I appreciate all the advice on this thread.

I finally did it, although I feel nearly sick to my stomach. 

"it" is only selling 100 out of my 310 shares.  But I did it.

I believe I'll live to regret the decision, but if I use my brain, it was a rational, conservative move.  The funds freed up have gone to vanguard international etf's because I'm light international in my allocation.

Ugh.  Sometimes you just have to take some profits.  I'll be looking at trimming a second third sometime after the new year.  I will probably never sell the third third just because I love the stock the so much and love watching all the news and volatility.

Congrats on your gains. I think you made a good decision and have a good plan going forward.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: aspiringnomad on December 07, 2014, 10:02:50 AM
I agree that you made a prudent decision to sell some of your shares, but I'm in similar shoes with my AAPL investment and have no plans to sell. Instead, I don't allow myself to accumulate more AAPL and direct all dividends and newly invested funds to diversified ETFs. Like you, I also believe in the direction the company is headed. I think it is continuing to build the best high-end ecosystem for consumers of tech and there's still plenty of room for growth and new revenue. If I'm wrong, the current product line will still continue as a cash cow for several years, while the current cash hoard buffers against missteps along the way. And even if the stock does go to zero while I'm still holding, it won't do so before returning significant equity to long-term shareholders: http://www.joshuakennon.com/eastman-kodak-example/
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Dicey on December 16, 2014, 12:23:41 PM
I appreciate all the advice on this thread.

I finally did it, although I feel nearly sick to my stomach. 

"it" is only selling 100 out of my 310 shares.  But I did it.

I believe I'll live to regret the decision, but if I use my brain, it was a rational, conservative move.  The funds freed up have gone to vanguard international etf's because I'm light international in my allocation.

Ugh.  Sometimes you just have to take some profits.  I'll be looking at trimming a second third sometime after the new year.  I will probably never sell the third third just because I love the stock the so much and love watching all the news and volatility.
Hey Allen, I let myself get distracted by FIRE4science's fake quote (and lack of response)...

I'm sorry for that, as the real issue is your OP. Congratulations on taking such a big step. Another way to look at this is: how much of the Vanguard International ETF would you have been able to buy had you not sold the AAPL stock? Seems to me like the cold, hard facts show this step is a win, but you're stll feeling a sense of loss. Try reframing this so you see it as the victory is surely is. Apple is hot now, but it's always fun to look at the leading blue chips from past decades and see how many former giants are gone or merely shadows of their former superstar status. In time, I believe you will come to embrace how smart you are to use the AAPL stock to diversify your portfolio. Please do keep us posted.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: CCCA on December 18, 2014, 04:47:37 PM
I too have a higher than prudent allocation % in AAPL.  One problem is that the gains are also high (nearly $80k) so I want to sell it in chunks over time so as not to generate too much capital gains and thus taxes.  We are close to the 15%/25% marginal tax rate boundary and so selling too much stock and locking in the gains would also push us into the 25% rate which also carries a non-zero long-term capital gains rate.  So I am trying to reduce our exposure to AAPL given the recent run-up but at a rate that doesn't incur too much tax liability.  If I do it slowly, it may take several years or I might just bite the bullet at some point and pay the 15% tax.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Fallenour on December 18, 2014, 08:22:21 PM
Drop it.

Apple is about to see a loss in their stock value.

They are currently in the middle of a slugfest lawsuit that even they themselves admit and recognize they will lose. The total amounts being pursued is in excess of 2 Billion USD. Even with a stock buyback, they wotn be able to make up those losses without depleting cash pools, which will be highly noticeable, and will decrease the value of their stock.

Id say decrease your apple stock, and pick up iron mountain and palto alto. They are the two highest steady gainers over the past 10 years, and show trends for continual increase for at least the next 3-5 years.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on December 18, 2014, 09:35:51 PM
Fallenour,

The stock may go up or down but I'm literally willing to bet $20k that the outcome of that lawsuit doesn't mean squat compared to the juggernaut. AAPL likes to take BIG dives on bad news but it doesn't matter the profits are just stunning for now. Can they keep coming up with hits? I believe they have more in them but maybe I'm wrong.

I still will sell $10k more at some point to further diversify into international. Maybe after the 1Q results. Or the apple watch release. Or ios9. Or who knows...
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Fallenour on December 19, 2014, 06:44:47 AM
Drop it.

Apple is about to see a loss in their stock value.

They are currently in the middle of a slugfest lawsuit that even they themselves admit and recognize they will lose. The total amounts being pursued is in excess of 2 Billion USD. Even with a stock buyback, they wotn be able to make up those losses without depleting cash pools, which will be highly noticeable, and will decrease the value of their stock.

Id say decrease your apple stock, and pick up iron mountain and palto alto. They are the two highest steady gainers over the past 10 years, and show trends for continual increase for at least the next 3-5 years.

Wow, excellent analysis.

The only problem is that all that information (which is highly visible well-known information and/or wrong) would already be built into the stock prices, and so won't affect future valuation.

Your comments are a bit like the person who says "I'm investing in Walmart before Christmas because people always buy a lot of stuff for the holidays!"

What you're failing to realize, is in all reality, its absolutely not.

In fact, its quite the opposite. People are mostly betting on three things, that very poorly judged concept of "its already configured in" which its not, and the fact that apple will win the lawsuit, which they wont, and the "kicking of the can" so to speak, as the legal battle has been waging between the two giants for over a decade now.

What will end up happening to apple is the same they did to samsung, their flagship phone, the Iphone 6, will most likely be banned from sales in the US due to massive copyright infringements on the Nexus 4.

When this occurs, outside of the 2.7 oddish Billion dollars in reparations, the iphone 6 will additionally be banned from sales in the US, and most likely have pursued bans in other countries, likeness for likeness, as they did to samsung. Its exactly why apple made the move to try and settle the murky waters with samsung recently, trying to "wave off" some 40ish lawsuits between the two, to make amends.

They did this specifically because the iphone 6 is their flagship, and a primary breadwinner for Apple. If it becomes banned, it will be a devastating blow to Apple, as compared to their ding they tossed at samsung, owned by the mammoth Google.

What many people fail to realize here, is Ive called the tech increases for Ionic security (doubled recently), Palo Alto, Cisco, EMC, RSA (and the buyout), Iron Mountain, check point, sourcefire, and Threatgrid.

I work in the industry, I follow the industry, and I have personal relationships with many of their major distributors, as well as the companies themselves. I know when they are doing well, and when they are not. So trust me when I say, Apple is absolutely going to see a % based drop in their stock value pending verdicts on both their case with Samsung, and their Class action against their Ipod.

Collectively the Ipod and Iphone make the majority of their sales. Dont try to feed me some half cocked "They are calculated losses" crap. Noone, regardless of who they are, can adjust their stock value for an unprecedented catastrophic loss like that. Nobody. Not even berkshire. You're gonna see points lost. Get ready for it.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: aspiringnomad on December 19, 2014, 08:42:04 AM
Drop it.

Apple is about to see a loss in their stock value.

They are currently in the middle of a slugfest lawsuit that even they themselves admit and recognize they will lose. The total amounts being pursued is in excess of 2 Billion USD. Even with a stock buyback, they wotn be able to make up those losses without depleting cash pools, which will be highly noticeable, and will decrease the value of their stock.

Id say decrease your apple stock, and pick up iron mountain and palto alto. They are the two highest steady gainers over the past 10 years, and show trends for continual increase for at least the next 3-5 years.

Wow, excellent analysis.

The only problem is that all that information (which is highly visible well-known information and/or wrong) would already be built into the stock prices, and so won't affect future valuation.

Your comments are a bit like the person who says "I'm investing in Walmart before Christmas because people always buy a lot of stuff for the holidays!"

What you're failing to realize, is in all reality, its absolutely not.

In fact, its quite the opposite. People are mostly betting on three things, that very poorly judged concept of "its already configured in" which its not, and the fact that apple will win the lawsuit, which they wont, and the "kicking of the can" so to speak, as the legal battle has been waging between the two giants for over a decade now.

What will end up happening to apple is the same they did to samsung, their flagship phone, the Iphone 6, will most likely be banned from sales in the US due to massive copyright infringements on the Nexus 4.

When this occurs, outside of the 2.7 oddish Billion dollars in reparations, the iphone 6 will additionally be banned from sales in the US, and most likely have pursued bans in other countries, likeness for likeness, as they did to samsung. Its exactly why apple made the move to try and settle the murky waters with samsung recently, trying to "wave off" some 40ish lawsuits between the two, to make amends.

They did this specifically because the iphone 6 is their flagship, and a primary breadwinner for Apple. If it becomes banned, it will be a devastating blow to Apple, as compared to their ding they tossed at samsung, owned by the mammoth Google.

What many people fail to realize here, is Ive called the tech increases for Ionic security (doubled recently), Palo Alto, Cisco, EMC, RSA (and the buyout), Iron Mountain, check point, sourcefire, and Threatgrid.

I work in the industry, I follow the industry, and I have personal relationships with many of their major distributors, as well as the companies themselves. I know when they are doing well, and when they are not. So trust me when I say, Apple is absolutely going to see a % based drop in their stock value pending verdicts on both their case with Samsung, and their Class action against their Ipod.

Collectively the Ipod and Iphone make the majority of their sales. Dont try to feed me some half cocked "They are calculated losses" crap. Noone, regardless of who they are, can adjust their stock value for an unprecedented catastrophic loss like that. Nobody. Not even berkshire. You're gonna see points lost. Get ready for it.

Apple was just cleared in the class action iPod suit. No damages awarded to the plaintiffs, no skin off Apple's back. As far as I can tell in the ongoing Samsung v. Apple patent wars, Apple is the one that stands to win a verdict in their favor to the tune of $930m.

Also, you do know the iPod now generates just 1% of Apple's revenues, so while your statement that it along with the iPhone make up the majority of Apple sales is technically correct, it's only because the iPhone is such a cash cow for the company. I agree that if Apple were forced to stop selling the iPhone it would have a devastating effect on share price, but there's absolutely no indication beyond your soothsaying that it will happen.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on December 19, 2014, 05:49:54 PM
Fallenour, I can't imagine a universe in which any of that prediction comes true. Certainly not THIS universe.

Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: sol on December 19, 2014, 07:07:06 PM
trust me when I say, Apple is absolutely going to see a % based drop in their stock value pending verdicts on both their case with Samsung, and their Class action against their Ipod.

Collectively the Ipod and Iphone make the majority of their sales. Dont try to feed me some half cocked "They are calculated losses" crap. Noone, regardless of who they are, can adjust their stock value for an unprecedented catastrophic loss like that. Nobody. Not even berkshire. You're gonna see points lost. Get ready for it.

So how much of your personal fortune is personally tied up in Apple shorts right now?

Like are you 90% sure of your prediction so 90% of your net worth is tied to shorting Apple?  Are you only 10% sure and 10% tied to shorting Apple?

Are you not shorting Apple at all?
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: CCCA on December 19, 2014, 07:41:20 PM

Fallenour, I can't imagine a universe in which any of that prediction comes true. Certainly not THIS universe.

That's what I was thinking. I'm not in the industry but do follow most AAPL news and fallenours "analysis" seems somewhat suspect.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: josstache on December 19, 2014, 09:36:45 PM
While one remedy for patent infringement is a ban on the sale of the infringing products, Apple should currently be trading at a discount based on the market consensus on the probability and impact of any such ban.  It follows that Apple is overvalued from the perspective of someone with the material, non-public (i.e. "insider") information that the iPhone 6 and 6 Plus are about to be banned in the US. Depending on how a person came to such information, and their motivations for posting it on a public message board, they could be prosecuted for violating federal securities law.

Fortunately or unfortunately, I don't think we have received any material, non-public information here.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: sol on December 19, 2014, 10:05:25 PM
Fortunately or unfortunately, I don't think we have received any material, non-public information here.

Was that a slightly more diplomatic way of saying he's blowing smoke out of his ass?
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: iamlindoro on December 19, 2014, 11:18:13 PM
Fortunately or unfortunately, I don't think we have received any material, non-public information here.

Was that a slightly more diplomatic way of saying he's blowing smoke out of his ass?

Impossible.  He's our resident Tech stock investment guru.  He started a thread that said so.  You guys are gonna feel pretty silly that you didn't short apple and go long Russian Rubles in a few months...
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: LordSquidworth on December 22, 2014, 08:58:19 PM
While one remedy for patent infringement is a ban on the sale of the infringing products, Apple should currently be trading at a discount based on the market consensus on the probability and impact of any such ban.  It follows that Apple is overvalued from the perspective of someone with the material, non-public (i.e. "insider") information that the iPhone 6 and 6 Plus are about to be banned in the US. Depending on how a person came to such information, and their motivations for posting it on a public message board, they could be prosecuted for violating federal securities law.

Fortunately or unfortunately, I don't think we have received any material, non-public information here.

Appl is/has been trading at a discount compared to many of it's competitors and other tech companies.

When someone resorts to "I work in the industry/I know the people in the industry" it's often best to look the other way.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: LuckyMe on December 23, 2014, 08:00:35 AM
I'm in a similar position with Apple stock I bought 5 years ago that has now increased over 5x in value.  This was back before I started indexing.  However I can't sell because it would incur a big capital gains tax.  If you have shares or Apple or another stock in a tax-advantaged account, you're in an enviable position.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on December 23, 2014, 11:32:56 PM
It's a good move to at least divert the dividends though. You're making almost 10% on your original investment each quarter with just the dividends alone. Just make sure that money train isn't going right back into APPL.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: LordSquidworth on December 24, 2014, 07:57:55 AM
^^

Direct the dividends elsewhere and that position should shrink, compared to others.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on January 27, 2015, 03:17:51 PM
Arrrgghhhh.  This earnings call is like a hot poker in my eye.

<deep breath>

I made a smart choice to sell 1/3rd of my AAPL and put the rest in International.

Ugh. 

/cry
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on January 27, 2015, 05:05:59 PM
You did make the smart choice. Frankly, selling it all would have been an even SMARTER choice.

But it's better to be lucky than good. ;)
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: starguru on January 27, 2015, 05:36:39 PM

You did make the smart choice. Frankly, selling it all would have been an even SMARTER choice.

But it's better to be lucky than good. ;)

I don't get it.  Why?
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on January 27, 2015, 05:39:13 PM

You did make the smart choice. Frankly, selling it all would have been an even SMARTER choice.

But it's better to be lucky than good. ;)

I don't get it.  Why?
Why what? Why is he upset that he sold part of his AAPL position, or why is it better to be lucky than good?
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: starguru on January 27, 2015, 05:56:49 PM


You did make the smart choice. Frankly, selling it all would have been an even SMARTER choice.

But it's better to be lucky than good. ;)

I don't get it.  Why?
Why what? Why is he upset that he sold part of his AAPL position, or why is it better to be lucky than good?

Oh I thought he was happy he sold.  And was asking why.  I would hope this is the push the stock needs to get to a more reasonable value.  Isn't it very undervalued right now?
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on January 27, 2015, 05:58:04 PM


You did make the smart choice. Frankly, selling it all would have been an even SMARTER choice.

But it's better to be lucky than good. ;)

I don't get it.  Why?
Why what? Why is he upset that he sold part of his AAPL position, or why is it better to be lucky than good?

Oh I thought he was happy he sold.  And was asking why.  I would hope this is the push the stock needs to get to a more reasonable value.  Isn't it very undervalued right now?
Considering that over 50% of sales were in China, and only 16% of sales were current customer upgrades? Yes. Yes it is underpriced.

Possibly by quite a lot.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: jzb11 on January 28, 2015, 04:39:04 AM
I'm up 35% since last may. I will keep it until until the end of 2015.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on January 28, 2015, 12:28:18 PM
I'm up 35% since last may. I will keep it until until the end of 2015.
I'm up 20% since September, not counting the dividend payout (and the next one inbound).

I plan to hold until I go long term capital gains in September. Unless the 6s and it's upgrade potential lures me into early 2016.

I hope I'll have the willpower to sell this September.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: richschmidt on January 29, 2015, 10:15:31 AM
For all of you wondering what to do with your appreciated stock sitting in taxable accounts, don't forget that you can donate it to the charity/church of your choice and skip the capital gains tax. (Transfer it to them. Don't sell it and give them the money.) If it's long-term cap gains, you get credit on your federal taxes for the current value when you donate it.

Just a side note. I didn't read this whole thread, so forgive me if this has come up before. My wife and I are giving to our church that way this year, using AAPL stock that's appreciated quite a bit.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on January 29, 2015, 01:58:41 PM
Well.  I still have $25k in Apple stock after my previous sale (which was for $11,000 in December). 

"Fearful when others are greedy"...DESPITE the company being undervalued in my opinion and the capital return increases likely to continue to be huge, I think it is probably a good time to trim another $12.5k from my holdings and finish diversifying into International wouldn't you say?  Keeping $12.5k is still a huge allocation for an investor my size (total investments $181k).

Smart consensus, yes?
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: ioseftavi on January 29, 2015, 03:41:59 PM
Seems like a great time to make another trim.

Side note:  This next sale of 12.5 will put you below 10% of your PF in AAPL.  I'd say once you've done that - you can rest a bit easier.  If it's killing you to sell this stock (psychologically), you can leave the remaining 12.5k in there and let it go for a bit.

Optimal portfolio management?  No.  Ideally, you'd index 100%.  But if the idea of having an "untouchable chunk" of apple for a while helps you sell some of it to get it down to a manageable size, then go for it.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on January 30, 2015, 10:35:38 AM
Barbara Boxer and Rand Paul (lol howdafuck they team up?) just unveiled a capital repatriation bill. 6.5% tax rate, with stipulations that the money can't be used for exec comp, buybacks and dividends for 8 years.

APPL has nearly 175 Billion in cash sitting idle. Oh man oh man if they were able to bring that money home.... 
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Jon_Snow on January 30, 2015, 10:48:06 AM
I own A LOT of Apple. Thankfully so. Between AAPL and my REIT's they have helped offset the gigantic crater in my energy stock holdings.

I think AAPL is a slam dunk to go to $150 relatively soon. Was thinking of buying more, but I am one of those people who doesn't like to put all of my eggs in one basket - even if Apple is one of the best "baskets" out there.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: LordSquidworth on January 31, 2015, 07:02:47 AM
I own A LOT of Apple. Thankfully so. Between AAPL and my REIT's they have helped offset the gigantic crater in my energy stock holdings.

I think AAPL is a slam dunk to go to $150 relatively soon. Was thinking of buying more, but I am one of those people who doesn't like to put all of my eggs in one basket - even if Apple is one of the best "baskets" out there.

I'm tempted to add to my AAPL position. Though might wait a couple months/depends if it breaks above $120. It's been somewhat range bound.

Barbara Boxer and Rand Paul (lol howdafuck they team up?) just unveiled a capital repatriation bill. 6.5% tax rate, with stipulations that the money can't be used for exec comp, buybacks and dividends for 8 years.

APPL has nearly 175 Billion in cash sitting idle. Oh man oh man if they were able to bring that money home....

It'd sit in a bank account for 8 years.

Seriously.

Apple bringing that cash back wouldn't create jobs. They have more than enough cash here at home to do whatever they want to do. The cash overseas, quite frankly, it's uses are exclusively for dividends/share buy backs.

Apple has too much cash.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on February 11, 2015, 08:42:38 AM
The money it's self wouldn't be distributable for 8 years, but it could be put to other purposes. Payroll, refresh of Apple Stores, Solar investment...

In the meantime, stateside revenues would be available for payment to investors.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: CCCA on February 21, 2015, 10:41:46 AM
AAPL has been on a tear recently (that was some earning's report!) and there's a lot of optimism around the company now, apple watch, apple car, etc. . . 
One part of me says, "well maybe they'll be valued as a company that can continue growing, and have a higher P/E ratio, rather than a company that is always about to be outcompeted by companies X, Y, or Z".  The other part of me says "I'm getting nervous partly because the share of AAPL as a % of my entire portfolio keeps growing, and it would be nice to lock in some more of the gains, (remembering back to 2012/2013 when the share price cratered)". 

I will sell some shares this year, but in terms of taxes and such a larger chunk that will make a significant dent in my asset allocation will probably have to wait until the beginning of next year. 
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on February 22, 2015, 05:59:38 PM
AAPL has been on a tear recently (that was some earning's report!) and there's a lot of optimism around the company now, apple watch, apple car, etc. . . 
One part of me says, "well maybe they'll be valued as a company that can continue growing, and have a higher P/E ratio, rather than a company that is always about to be outcompeted by companies X, Y, or Z".  The other part of me says "I'm getting nervous partly because the share of AAPL as a % of my entire portfolio keeps growing, and it would be nice to lock in some more of the gains, (remembering back to 2012/2013 when the share price cratered)". 

I will sell some shares this year, but in terms of taxes and such a larger chunk that will make a significant dent in my asset allocation will probably have to wait until the beginning of next year.

I'm selling in September when my position goes LTCG. If I can sell while maintaining my 0% Capital gains tax rate I will sell the whole position. If not, I'll sell as much as I can.

That's what I tell myself, anyway.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: CCCA on February 22, 2015, 09:38:28 PM
AAPL has been on a tear recently (that was some earning's report!) and there's a lot of optimism around the company now, apple watch, apple car, etc. . . 
One part of me says, "well maybe they'll be valued as a company that can continue growing, and have a higher P/E ratio, rather than a company that is always about to be outcompeted by companies X, Y, or Z".  The other part of me says "I'm getting nervous partly because the share of AAPL as a % of my entire portfolio keeps growing, and it would be nice to lock in some more of the gains, (remembering back to 2012/2013 when the share price cratered)". 

I will sell some shares this year, but in terms of taxes and such a larger chunk that will make a significant dent in my asset allocation will probably have to wait until the beginning of next year.

I'm selling in September when my position goes LTCG. If I can sell while maintaining my 0% Capital gains tax rate I will sell the whole position. If not, I'll sell as much as I can.

That's what I tell myself, anyway.
I have a bunch that goes LT in Sept as well.  But as i mentioned, I may not be able to sell much until after the new year, because I will be very close to that 25% tax bracket even without selling.

I'm feeling pretty good about the next few months and that maybe the market is finally understanding that AAPL is not about to be beaten by Android or Samsung or whoever.  Plus they may be announcing some additional dividends or share repurchase in a few months which can help boost their share price.  I believe they earned about 5% of their current market cap in profit last year and have $170 B in cash. 
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Allen on February 23, 2015, 07:32:03 AM
I never did sell my second third. Almost back up to $31k in AAPL again!! (actually $27.3k)
Glad I followed my gut instead of brain this time but it's a short term lucky break. I really need to take profits and get back to my proper AA.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Retire-Canada on February 23, 2015, 08:26:49 AM
It's probably a little risky. I wouldn't sell, though. Just invest your new contributions in other stuff.

+1 - just start adding money to diversify your investments. If that's not fast enough for you sell as much of Apple as you feel is needed to reduce the risk.

-- Vik
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on February 23, 2015, 08:43:25 AM

I have a bunch that goes LT in Sept as well.  But as i mentioned, I may not be able to sell much until after the new year, because I will be very close to that 25% tax bracket even without selling.

I'm feeling pretty good about the next few months and that maybe the market is finally understanding that AAPL is not about to be beaten by Android or Samsung or whoever.  Plus they may be announcing some additional dividends or share repurchase in a few months which can help boost their share price.  I believe they earned about 5% of their current market cap in profit last year and have $170 B in cash.
At a bare minimum you can get your principle out. That can be sold at any time without taxation. If the capital gains have to stay there for another year, worst case there's no money lost.

I never did sell my second third. Almost back up to $31k in AAPL again!! (actually $27.3k)
Glad I followed my gut instead of brain this time but it's a short term lucky break. I really need to take profits and get back to my proper AA.
Yeah, I'm right there with you. Frankly I never should have purchased my position in the first place. I bought at $98.00 in September, after the stock was already waaaay up on the year. Worst kind of herd purchase.

But it has appreciated nearly 33% since then, so it worked out. I just tell myself every day that it's dumb luck and not any personal insight or skill. And I will exit the position as soon as it's tax advantaged.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: josstache on February 23, 2015, 08:53:29 AM
At a bare minimum you can get your principle out. That can be sold at any time without taxation. If the capital gains have to stay there for another year, worst case there's no money lost.


Is CCCA holding Apple in a Roth IRA? Otherwise I don't think this is true.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Chuck on February 23, 2015, 11:32:43 AM
At a bare minimum you can get your principle out. That can be sold at any time without taxation. If the capital gains have to stay there for another year, worst case there's no money lost.


Is CCCA holding Apple in a Roth IRA? Otherwise I don't think this is true.
Good point. How the stock is held presently is very important.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: Bicycle_B on February 23, 2015, 02:03:14 PM
Smart move would be to sell it since there would be no tax consequences for doing so. You got lucky and won the mini-lottery. Cash out!

+1 for sure!!
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: ValueIsWhatYouGet on February 23, 2015, 04:29:13 PM
I know it isn't very popular here, since it goes against indexing and diversification, but if you know what you're doing in the stock market, having a high concentration in a few stocks isn't the worst thing.

I've had AAPL since 2004, and bought more during the dip when everyone felt they were dead in the water. Yet they still churned more and more cash flow. If you're not comfortable reading financial statements, 10-Ks, and doing fundamental analysis, then yes, you should probably get out and not hold individual stocks. Index funds are also very likely weighted heavily with AAPL as it is, with it being the largest company and all.

If you think that there is still room to grow, that the discounted rate of future cash flows exceeds what the market is currently valuing the company at by a HUGE margin, have a long-term timeline and do not get trigger happy, then yes, being in AAPL (or any other stock for that matter) is good. But if you aren't really sure what you're doing, and are merely investing because you think "the iPhone will sell well" without any understanding of how that will impact future financial performance, then sell now and index 100%.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: KingCoin on February 23, 2015, 04:43:10 PM
I know it isn't very popular here, since it goes against indexing and diversification, but if you know what you're doing in the stock market, having a high concentration in a few stocks isn't the worst thing.

I've had AAPL since 2004, and bought more during the dip when everyone felt they were dead in the water. Yet they still churned more and more cash flow. If you're not comfortable reading financial statements, 10-Ks, and doing fundamental analysis, then yes, you should probably get out and not hold individual stocks. Index funds are also very likely weighted heavily with AAPL as it is, with it being the largest company and all.

If you think that there is still room to grow, that the discounted rate of future cash flows exceeds what the market is currently valuing the company at by a HUGE margin, have a long-term timeline and do not get trigger happy, then yes, being in AAPL (or any other stock for that matter) is good. But if you aren't really sure what you're doing, and are merely investing because you think "the iPhone will sell well" without any understanding of how that will impact future financial performance, then sell now and index 100%.

Even the professionals can't beat the market. Reading 10-Ks isn't going to help you divine the future, no matter how skilled you think you are. There's nothing in that 10-k that every institutional invetor doesn't already know. AAPL is and was one of the most analyzed stocks in the world. What you're really betting on is AAPL's continued popularity down the road. That's ultimately unknowable. One period's tech darling is the next's also-ran. Holding onto AAPL and buying the dip worked, but AAPL could have gone the way of HTC or Blackberry in the post-Jobs era (and it still might). Hindsight is 20/20.

Yes, it's possible to understand the risk of a concentrated position and plan your portfolio and life around it. However, a concentrated portfolio increases risk without increasing expected return. It smacks of hubris to ignore the value of diversification and take a pass on one of the only free lunches in investing. 
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: ValueIsWhatYouGet on February 23, 2015, 05:24:18 PM
I know it isn't very popular here, since it goes against indexing and diversification, but if you know what you're doing in the stock market, having a high concentration in a few stocks isn't the worst thing.

I've had AAPL since 2004, and bought more during the dip when everyone felt they were dead in the water. Yet they still churned more and more cash flow. If you're not comfortable reading financial statements, 10-Ks, and doing fundamental analysis, then yes, you should probably get out and not hold individual stocks. Index funds are also very likely weighted heavily with AAPL as it is, with it being the largest company and all.

If you think that there is still room to grow, that the discounted rate of future cash flows exceeds what the market is currently valuing the company at by a HUGE margin, have a long-term timeline and do not get trigger happy, then yes, being in AAPL (or any other stock for that matter) is good. But if you aren't really sure what you're doing, and are merely investing because you think "the iPhone will sell well" without any understanding of how that will impact future financial performance, then sell now and index 100%.

Even the professionals can't beat the market. Reading 10-Ks isn't going to help you divine the future, no matter how skilled you think you are. There's nothing in that 10-k that every institutional invetor doesn't already know. AAPL is and was one of the most analyzed stocks in the world. What you're really betting on is AAPL's continued popularity down the road. That's ultimately unknowable. One period's tech darling is the next's also-ran. Holding onto AAPL and buying the dip worked, but AAPL could have gone the way of HTC or Blackberry in the post-Jobs era (and it still might). Hindsight is 20/20.

Yes, it's possible to understand the risk of a concentrated position and plan your portfolio and life around it. However, a concentrated portfolio increases risk without increasing expected return. It smacks of hubris to ignore the value of diversification and take a pass on one of the only free lunches in investing.

For the vast majority of people, indexing is the way to go. But the numbers very clearly stated that Apple was not selling fewer iPhones and that they weren't dropping in popularity. But the market had this narrative it felt was true, and people traded on it. So while the numbers were in the 10-K that everyone read, it didn't translate into correct behavior.

Most of the time the market is right and efficient, but it does lose it's head from time to time so if you're smart about it, I do think you can stand to profit. Warren Buffett had his entire net worth invested in GEICO at one point.
Title: Re: I have $31k in AAPL stock, am I an idiot?
Post by: CCCA on February 23, 2015, 11:50:13 PM
At a bare minimum you can get your principle out. That can be sold at any time without taxation. If the capital gains have to stay there for another year, worst case there's no money lost.


Is CCCA holding Apple in a Roth IRA? Otherwise I don't think this is true.
Good point. How the stock is held presently is very important.


Not sure I understand how you can sell only the principal.  That doesn't make sense.  If it was in a Roth IRA (it is not), then I could sell anytime without any tax (long-term or short-term).  I just can't get the money out of the account unless it is the initial contribution.