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The Apple Index: A Modest Proposal

"Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it's worth it in the end because once you get there, you can move mountains."

-- Steve Jobs

It is through the ideals of Apple's (Nasdaq: AAPL  ) co-founder and intellectual compass Steve Jobs that I'm proposing to simplify investing.

Apple has simplified so much of our lives already. Its iPhone alone has made everything from cameras to GPS devices to Blackberrys to flashlights to planners to iPods to Scrabble obsolete.

Today, it's finally time for Apple to throw its hat into the financial arena. As with the other markets Apple has entered, others have already tried and failed due to complexity.

We don't even need to delve deeply into the world of credit default swaps and ETFs that seek three times the returns on Malaysian gold futures to find unneeded financial complexity.

We see it in the most basic elements: the S&P 500 (INDEX: ^GSPC  ) and the Dow Jones Industrial Average (INDEX: ^DJI  ) . The former, as its name suggests, tracks a whopping 500 companies. The Dow slims the list down to 30, but manages to keep the unneeded complexity of tracking dozens of companies while still excluding civilization's most important iCompany.

Which brings us to the financial product Apple needs to create: The Apple One Industrial Average. Cutting through the clutter, it will track just one company: Apple.


Careful Apple watchers can see that it's been laying the groundwork for such an all-things-to-all-investors move for quite a while now. It's been busy expanding its empire across platforms, adding safety by adding to its massive cash hoard, and trotting out a dividend for folks who need income alongside the glorious capital gains. It's like having a growth stock, a blue chip, a savings account, and a bond all rolled into one.

But, you may ask, even with all that, don't I still need to diversify? Heck no. Would you diversify the Beatles by adding back that fifth member? Then why would you diworsify the Apple Index by adding in the frail companies whose lunches Apple is eating?

Think about it. After Apple TV conquers the living room, the next logical move is the Apple Home. Then the Apple Car to dock in the garage of the Apple Home. And, of course, Apple Green Energy to power it all.

I haven't figured out how Apple conquers pharmaceuticals, but by that time, Apple will be large enough to acquire any sectors it hasn't already enveloped. Having its own fiat currency will also make acquisitions easier.

Maybe I'm getting a bit carried away with Apple's potential sovereign nation status. Let's rein it back in and think through how Apple serves the current world order. It's in well over 100 countries now, from Mali to Montserrat, Thailand to Deutschland, even Belgium to Brazil.

If you want exposure to the current undisputed superpower, America, Apple is by far its largest publicly traded company. And as the U.S. government itself has scaled back, Apple has stepped in to create 514,000 jobs spanning all 50 states.

How about exposure to the next potential superpower, China? A (massively growing) check mark there.

Domination in the U.S. and China is comforting, but here's the kicker: Projections have China GDP surpassing the U.S.'s GDP by 2020. Good for China. But given Apple's current growth rate near 50%, its sales will surpass China's GDP by 2025!

So on the one hand, you've got Apple destroying entire industries with its palm-sized products, and on the other, you've got it spreading across the globe faster than a "Call Me Maybe" tribute video. Put those two facts together and you see why resistance is futile.

Don't let your investments go the way of Kodak, Alta Vista, and MySpace. Replace your portfolio with an Apple One Industrial Average index fund or ETF as soon as Apple heeds my advice and rolls it out.

One more thing: For those who are still not convinced by my argument and stubbornly want to diversify, Apple has anticipated your needs. Back in May, Apple introduced a hedging instrument that loses roughly as much as Apple gains. It trades on the Nasdaq under the ticker symbol FB.

And one more thing: Yes, this entire article is tongue in cheek. Please diversify. Don't get carried away with any investment -- even one in Saint Apple.

If you want to learn more about Apple, check out our premium Apple report that gives a serious but easy-to-read rundown of Apple's opportunities and threats.

Despite his gentle poking at Cupertino's expense, Anand Chokkavelu happily owns shares of Apple. You can follow Anand on Twitter. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple. Motley Fool newsletter services have also recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Read/Post Comments (11) | Recommend This Article (27)

Comments from our Foolish Readers

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  • Report this Comment On August 30, 2012, at 12:03 PM, TMFTypeoh wrote:

    "One more thing: For those who are still not convinced by my argument and stubbornly want to diversify, Apple has anticipated your needs. Back in May, Apple introduced a hedging instrument that loses roughly as much as Apple gains. It trades on the Nasdaq under the ticker symbol FB."

    Thanks for making me laugh!


  • Report this Comment On August 31, 2012, at 7:55 AM, TMFNewCow wrote:

    Poor Alta Vista.

    -- Evan

  • Report this Comment On August 31, 2012, at 9:32 AM, GrowthMasters wrote:


    It has always been difficult for me to diversify with this one in my portfolio.

  • Report this Comment On August 31, 2012, at 12:51 PM, TMFDarwood11 wrote:

    Wonderful article and it did make me chuckle.

    I can hardly wait for a gleaming, AAPL home of about 1200 square feet which only costs about $800,000 and is obsoleted and replaced by a newer and better model with more features about every 6 months.

    Remember the automotive mantra "longer, lower wider?"

    I'd suggest that the really enterprising will begin figuring out how to profit from the cast-offs of disgruntled AAPL owners. Using current statistics, a refurbished AAPL home should go for about 25 cents on the dollar, if iPhone numbers are indicative.

    I expect the AAPL solution will to bulldoze any used homes to prevent their sale, and to collect a lot of "design" patents for rectangular doors and windows, refrigerators, light switch covers, etc.

  • Report this Comment On August 31, 2012, at 1:01 PM, JimmyZangwow wrote:


    Next time you need to put the part about it being a joke closer to the top, because I imagine lots of Safari browsers firing up to learn more...oh wait, what's this new story about iPhone5 ?

    Takes all kinds.

  • Report this Comment On August 31, 2012, at 1:25 PM, apeyron wrote:


    " haven't figured out how Apple conquers pharmaceuticals,"

    Doesn't an Apple a day keep the doctor away?

  • Report this Comment On August 31, 2012, at 1:58 PM, Mathman6577 wrote:

    I like your proposal. Apple is entirely different than most companies and stocks. I tell people I own stocks in various sectors (industrials, consumer staples, etc.) and types (growth, dividends, etc.) and then I have Apple. It seems to defy logic where to place it.

  • Report this Comment On September 02, 2012, at 10:18 AM, OodieWatcharin wrote:

    This is such a nice take of the monopoly Apple is presenting itself... the entire Apple-ecology!

    Is Apple too expensive to invest in now??

  • Report this Comment On September 02, 2012, at 7:36 PM, TMFBomb wrote:

    Thanks for reading and commenting, all!


    Let's hope Folks read the last line!


    Now why didnt I think of that?


    I am still holding my Apple shares, so I'll say "not necessarily." My intent with the article was to poke some fun at the Apple hype, but there's a heck of a lot of substance to what they're doing, too. Their earnings prove it.

  • Report this Comment On September 02, 2012, at 8:45 PM, NickD wrote:

    Apple who came up with this name

  • Report this Comment On September 03, 2012, at 2:18 PM, kellogg9 wrote:

    They chose Apple because it was ahead of Atari in the phone book -- a time when Atari was king of the world in the 70s.

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