Will This Apple Bear Ever Be Right?

Jeff Gundlach is a man with a mission. In this case, it's taking another opportunity to rain on Apple's (NASDAQ: AAPL  ) parade. Gundlach is the CEO of Doubleline Capital and has casually been called the "King of Fixed Income." He's also a staunch Apple bear.

Gundlach was recently on CNBC (starting around the 5:08 mark) reiterating his strong belief that there's more downside in store for Apple. More specifically, he thinks shares are headed to $425 -- over 20% lower than current levels. He notes that Apple went "vertical" around that price and since he's "been around for a long time" he figures that shares will go back from whence they came after "the bubble pops."

While he's typically known as a bond guru, Gundlach says his belief isn't because he's a "bond guy or a stock guy," but instead because he's a "market guy." That's some hard-hitting analysis right there, Fools.

Last year, Gundlach made his case a number of times throughout the year. In May at the Ira Sohn Conference in New York, he and Greenlight Capital's David Einhorn took opposing views on the Mac maker. Gundlach expressed some doubt that consumers would continue lining up for Apple's latest and greatest eventually. Einhorn, on the other hand, said that there's no reason why Apple's market cap can't reach $1 trillion, since it captures customers in its ecosystem.

At the time, shares were in the midst of a relative pullback that lasted just over a month between April and May. After all was said and done, Apple gave back 19% of its gains before resuming its upward course and tapping new all-time highs four months later.

In November, Gundlach said that Apple lost its innovative touch now that Steve Jobs is gone. He also joked that Apple may soon introduce new "tooty-fruity" colored iPads and call it innovation while mentioning the same $425 price target. It turns out that some analysts think future iDevices are indeed in store for a dash of color. BGR ran a poll and 35% of over 2,000 respondents said they'd be interested in a blue, pink, or yellow iPhone with another 28% open to it but wanted to see how they look first. Say what you will, but there might be some demand for what would inevitably be marketed as "the most colorful iPhone we've ever made."

As luck would have it, Apple shares rallied again after Gundlach's comments, although at this point they've given back some of those gains, but appear to be stabilizing. Will Gundlach ever be right?

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Read/Post Comments (12) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 03, 2013, at 7:48 PM, JokerJoey wrote:

    In a word, "no". Somewhere along the line Mr. Gundlach must have gotten really REALLY pissed off about something to do with Apple. Maybe Steve told him off or something. I don't know. Why not go pick on Google or better yet, the champion of phantom valuations, Amazon? Jeez Louise, enough already.

  • Report this Comment On January 03, 2013, at 10:22 PM, JaanS wrote:

    Thanks for the history here. Any idea if he has older quotes?

    I recently posted a series on Apple: Fire sale ends Dec 31 - the latest is here:

    http://seekingalpha.com/article/1083911-apple-fire-sale-part...

  • Report this Comment On January 04, 2013, at 10:44 AM, seans887 wrote:

    @happypoordays I can see what you mean about the AAPL cheerleading, but where are you getting this business about the technicals being horrible? Current P/E of 12.28, forward P/E under 10, ZERO debt, over $120 BILLION in the bank, and that's after share buybacks and a dividend. Innovation in the post-Jobs era remains to be seen, but even if they simply continued releasing marginally better iPhones and iPads every 6 months, they'd still be the top dog in personal computing and cellphones.

    Apple is dead? Really? Would you care to make it interesting?

  • Report this Comment On January 04, 2013, at 11:18 AM, StopPrintinMoney wrote:

    Here's something Wall Street Drummers won't tell you ...

    http://www.zerohedge.com/news/2013-01-02/why-does-someone-ke...

  • Report this Comment On January 04, 2013, at 11:42 AM, AMDG4 wrote:

    Gundlach must not have any kids....My daughter and all of the kids that I surveyed in her 4th grade class got an IPOD or IPAD for Christmas this year, I think Apple is here to stay for a very very long time.

  • Report this Comment On January 04, 2013, at 12:47 PM, Sketch71 wrote:

    Apple is dead, huh? Articles about any company widely popular amongst Fools predictably receives comments charging bias and cheerleading, but they are invariably short on details/evidence. One of the valuable things I've learned from TMF is to actively look for bearish opinions on any company I am bullish on. But as I have been entirely unable to dig up coherently bearish arguments against Apple, I remain bullish.

  • Report this Comment On January 04, 2013, at 1:01 PM, Mathman6577 wrote:

    @JokerJoey made a great point about Amazon.

    My recommendation is that if you don't like a company don't say it -- just don't buy the stock. One day someone will come after you or your company (and you may not like it).

  • Report this Comment On January 05, 2013, at 12:16 PM, dwilh51183 wrote:

    I WENT TO A PARTY LAST NIGHT AND I COULDN'T BELIEVE HOW MANY PEOPLE HAD NEW APPLE PRODUCTS. I READ A GREAT ARTICLE TODAY , WHICH ALSO SAID THAT APPLE IS TRADING SO CHEAP THAT IT MAY STAY AROUND 515 FOR A LITTLE WHILE BUT THE PRICE AND VALUE IS WAY TOO COMPELLING FOR INVESTORS NOT TO BUY ! APPLE IS GOING TO START PUTTING ALL THEIR TECHNOLOGY IN NEW CARS. BY THE WAY, APPLE HAS 170 BILLION IN CASH,AND ADMINISTRATIVE LEAKS FROM CUPERTINO INDICATE AAPL IS GOING TO UNLEASH 10 BILLION OF BUY ORDERS AFTER THEY REPORT EARNINGS. TIM COOK SAYS STOCK IS UNDERVALUED." SHORT-SELLERS" BETTER COVER THEIR SHORT POSITIONS OR THEY WILL BE BURIED

  • Report this Comment On January 05, 2013, at 12:26 PM, dwilh51183 wrote:

    I went to a party last night and I couldn't believe how many people had new Apple products. I read a great article today stating that AAPL is trading at the most compelling valuations,and investors should buy the stock! Apple is going to start putting all their technology in new cars. By the way, Apple has 170 billion in cash, and administrative leaks from Cupertino California indicate Apple is going to unleash $10 billion worth of "BUY ORDERS" after they report earnings. CEO TIM COOK says Apple stock is undervalued. "Short-sellers" better cover their short positions or they will be buried

  • Report this Comment On January 06, 2013, at 11:40 PM, xblick wrote:

    Since the revelation of sweatshop production to capture large profits on hardware, as a responsible American we are off Apple products. Sampson appears to be the "tech Ferrari" this round.

  • Report this Comment On January 10, 2013, at 1:25 PM, Lazarill0 wrote:

    @JokerJoey,

    I'm afraid you're wrong about Amazon. If anything, Amazon is likely undervalued... not because of how great its store is, but how great its infrastructure is.

    SO MANY businesses use Amazon's cloud services, it's ridiculous. Netflix uses Amazon's business services to deliver streaming videos (talk about sleeping with the enemy). I used to work for a genomics company that delivered genome data via Amazon's cloud. Amazon is a HUGE player behind the scenes. In fact, almost a monopoly in its sheer gargantuan stature. I would venture that more ripples would be felt in the tech world if Amazon fell apart than if Apple did.

  • Report this Comment On January 21, 2013, at 4:48 PM, ddepperman wrote:

    Well, Bulls: There is reason to be cautious about Aapl. Actually more than 1.

    SJ is dead.

    There is reason to be concerned about the direction of electronic innovation. Handhelds--like Kansas City--have gone "about as fur as they can go".

    The future may lie in other places. Goog is coming out with phone glasses. Fine, but not the best solution.

    Then there is the idea of implanting circuitry in the skin.

    And then there is more biotech.

    Apple might move in this latter direction. This may be the brave new world of innovation.

    Handhelds are so, so, old stone age.

    And I love my iphone, except when it screws up.

    Appl's a great company, but the next 6-12 months willl be important.

    Adding colors isn't my idea of innovation.

    Where is Appl's leadership now that SJ done went and died?

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