Why I'm Seriously Thinking of Buying Apple

LONDON -- I'm not an Apple (NASDAQ: AAPL  ) fanboy. I don't like the "closed world" of Apple's technology, and I've never bought one of its products. 

I did have an iPod Shuffle, when it first came out, but that was given to me. It was certainly impressively small and light. (So light, in fact, that I didn't notice it in a pocket, and it went through a complete wash cycle. Small and light it may have been, but waterproof it was not.)

But not liking a company's products is not necessarily a good reason not to buy the shares. I'm not wild about Coke, but I'd be very happy (and rather wealthier) if I'd bought Coca-Cola shares when Warren Buffett did.

I didn't buy Apple shares at the end of the '90s because I didn't think much about the company at all. At worst it seemed washed up -- at best it made niche products for trendy people and graphic designers.

When the iPod came out, I thought it'd also be a niche product for trendy people, and that the mass-market for such things would be seized by more mainstream electronics companies, such as Sony or Philips.

Ditto the iPhone. Surely a big player such as Nokia would easily dominate the smartphone market?

I didn't think that a company such as Apple -- a company that had come close to ceasing to exist, really, toward the end of the '90s -- could possibly become the world-bestriding colossus that it has. 

As the share began its upward trend under Steve Jobs, it always seemed that it just couldn't continue, and so I resisted buying. As Apple's price climbed and climbed, my resistance to buying grew with it, because surely it couldn't go any higher. But it did, and I should be kicking myself. (But that wouldn't change anything and might hurt.)

And then Apple fell.

Plummeted might not be too strong a term. Closing at $450.50 last night, Apple is now a whopping 36% down from its peak of September 2012.

I reckon it's fallen too far for a company of this quality and growth record, and too far for a company with nearly $140 billion -- almost a third of its market cap -- in the bank. Irrational negativity about the company has taken hold and the sell-off has been too big. At its current price, Apple is on forward P/E of under 9. That's just wrong.

And that's why I'm seriously thinking of buying Apple.

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Read/Post Comments (10) | Recommend This Article (7)

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 25, 2013, at 10:34 AM, wilcoworld wrote:

    So what's the thrust here? "I've been wrong about apple all along—from not seeing the promise of its products, to thinking it was done right before it exploded into the best company in the world, to washing an iPod in the laundry. But follow my lead now." Is that your point?

  • Report this Comment On January 25, 2013, at 10:47 AM, pondee619 wrote:

    wilcoworld:

    There is no point. The author is only "seriously thinking of buying Apple". There is no action here. There is no purchase. There is no taking on of risk of actually owning the company. Only thought.

    There is no recommendation that anyone buy, or not buy, sell or hold, Apple. Only thought. No point.

  • Report this Comment On January 25, 2013, at 11:05 AM, techy46 wrote:

    I too am not an Apple lover but at this price $445 PS less $146 Cash PS or $299 I just can't resist investing in the value of the brand and the pricing power of their products. Apple relly needs to follow Nokia's startegy of a broader product line with different models for Asian and other emerging markets.

  • Report this Comment On January 25, 2013, at 11:13 AM, griftsno1capper wrote:

    It is hard to invest in a company who gives no guidance.

    Google is still a better long-term option.

  • Report this Comment On January 25, 2013, at 11:35 AM, Oshawan wrote:

    -A stock often goes up because it has been going up.

    -A stock often goes down because it has been going down.

    -A stock’s valuation matters only when valuations start to matter.

    -Fundamentals are important only when fundamentals become important.

    Everyone Hates this stock - wait for $400/350 and get back on the gravy train.

    This is now a core stock not a growth stock - but that's ok - I welcome that.

  • Report this Comment On January 25, 2013, at 11:48 AM, kickbishopbrenna wrote:

    oshawan, i like your train of thought :-) waiting for 400, and I feel we will see it!

    Brendan

  • Report this Comment On January 25, 2013, at 12:58 PM, JayLowell2 wrote:

    Apple is over priced for the small investor.Its an institutional stock for core holdings.But thats who moves the markets.Follow the wake of the Big boys but try to navigate a course that parallel to the battlewagons.

  • Report this Comment On January 25, 2013, at 3:36 PM, netscorer wrote:

    Might have as well put my name under this article. Word for word. You forgot to mention iPad and how I thought that it was just an oversized iPhone.

    Apple is the best tech stock to own, and at the current valuation it's like someone is giving you 30% off coupon and says, go shopping son.

  • Report this Comment On January 28, 2013, at 9:08 AM, TMFTarantula wrote:

    Hi Pondee619

    "There is no point. The author is only "seriously thinking of buying Apple". There is no action here. There is no purchase. There is no taking on of risk of actually owning the company. Only thought."

    I do tend to think about what I do, before I do it. Don't you? :-)

    Rgds

    Jon

  • Report this Comment On January 28, 2013, at 11:43 AM, pondee619 wrote:

    Jon:

    So, what ARE you doing Re: AAPL? Anything? What was your decision? What is you recommendation re AAPL?

    The point of my comment was not the thought, it was the lack of a decision. No decision, no action, no point. Just talk.

    Yes, I do think about what I plan to do before I do it. BUT, then I act on those thoughts, do you?

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