Time to freak out about the big Apple move?

I get asked all the time, for years on end now, questions like this one I got today:

AAPL price action scares me—and I’m way long. Don’t like parabolic moves. What do you you think is happening there Cody? Revaluation of PE or machines running wild?

My answer was:

Are those my only two options? Just a stock continuing its slow ascent to $1000 by 2015, would be my answer.

Two important points here. First, you should never read too much into how billions of people and millions of money managers from around the entire world are willing to buy and sell millions of shares of one single stock over a 6.5 hour period.

Second, it’s not about what Apple’s doing today anyway. Having first bought Apple at $7 a share, I’ve certainly seen my share of random 3% up moves in the stock over the last nine years now as an Apple investor. And it’s not like I just suddenly decided that Apple was headed to $1000.  Remember back in 2010 when the stock was half the price it is right now, I was saying the same thing:

Apple’s Going to $1000 by 2015. Here’s why.
1:13 a.m. Sept. 6, 2010 | By Cody Willard

I remember seeing a few random 3% up days back in 2007 when I was writing things like this:

iPhone Can’t Lose RealMoney ($)

By Cody Willard 05:08 PM EDT 06/26/07
The evolution of the phone in the next few years practically guarantees its success.

Here’s something I wrote one day when Apple was in a ugly downtrend and was down a whopping 7% on that particular day….which by the way happened to be almost exactly six years ago today:

Cody Willard

Sometimes I Rhyme Smooth, Sometimes I Rhyme Rough  2/6/2006 2:11 PM EST
Down 7% on the day, down 20% from its recent highs, chart looking terrible, backlashes getting warmed up, inbox overflowing with panic and fear … Well, I’m sure not going to draw a line in the sand in Apple(AAPL:Nasdaq) today, but I am nibbling on some long-dated calls. The Apple story isn’t over, IMHO, but it’s certainly hit a rough patch.Buy when it’s rough, sell when it’s smooth. That’s the idea, at least.

P.S. Here’s the answer to the most oft-heard asked question in my inbox today: Apple will stop going down when that’s no longer the most oft-asked question in my inbox.

Position: Net long AAPL

Back more than seven years ago, here’s what I was saying about Apple:

Apple Continues Its Victory March RealMoney ($)By Cody Willard 01:00 PM EDT 09/08/05

The iTunes phone and Nano extend its stellar brand and digital music dominance.

You guys have also heard me say over and over again that in the grand scheme of things, we should focus on great long-term investments and stick with our analysis. It’s not a new investment theme for me and it obviously has worked out very well over the last eight years since I wrote this about Apple:

Separate Winners From the Bubbly Chaff RealMoney ($)By Cody Willard 04:31 PM EST 11/12/04

Long-side risk is increasing as this rally wears on, but smart investors will stay exposed with great companies, not penny stocks.

Same point, a few months earlier than that, and notice the F5 mention too. It’s up about 500% since then:

Under Calm Surface, Raging Stocks RealMoney ($)By Cody Willard 03:32 PM EDT 10/27/04

The S&P may be range-bound, but stocks such as MicroStrategy, Apple and F5 are anything but.

Another thing that hasn’t changed over the last eight years — my love for Neil Young.

Cody Willard

Of Apples and Trades

3/26/04 10:36 AM ET

I’ve spent a good bit of time and money at iTunes the last week. The other day I made the coolest collection of Neil Young songs and covers ever. And then last night, I got on this country song binge (hey, I hated that stuff growing up in New Mexico, but now I actually miss it, LOL).

Anyway, although Garth isn’t available on iTunes yet (not much Snoop or Dre either, for that matter), I downloaded Billy Joel’s original “Shameless.”All that just to say that so far today, “I’m Tradeless!”Actually, I wanted to touch on Apple’s (AAPL:Nasdaq) iTunes strategy and how unbelievably well it’s working out for them.

I commented here before that Apple was making a big gamble by using a proprietary format, and that they would need to reach a critical mass to be successful with this whole music venture. Well, it’s still very early in the game, but with the millions and millions of iPods they’re selling, they are clearly well on their way to winning. Rock on!


So guys, the point is that Apple is up huge  again today. And it’s up huge since we bought it. And it’ s up huge since we wrote any of the above articles. And it’s up huge since I wrote these words back just a few quarters ago:

The stock’s still cheap, yes, even at $250 per share.  And yes, even though it’s up from $7 just eight short years ago.  I bring this up because I think, if you don’t own it already Apple, you probably want to go ahead and establish your cost basis at these current levels. Because this stock is going higher. Much higher. Probably to at least $350 per share before year end. And Apple’s gonna hit $1000 before 2015. So wouldn’t you like to look back when it does and proudly tell people your own cost basis?

I do think Apple’s probably due for a pullback and maybe even some range-bound trading for a while, now that it’s once again, the focus of so many emails in my inbox. You guys know that it’s been my biggest position for a while now (see: the posts with my positions at http://tradingwithcody.com/category/positions) but even so I’m okay with a pullback or rangebound action for a while in the name if that’s what is indeed ahead in the near-term.  I still think Apple’s headed to $1000 by 2015, which obviously sounds a lot more attainable with the stock bumping up at $500 a share than it did when I first started throwing that price target around when it was at $250 a share.

Point is, ignore the noise.  I’m still sticking with Apple.