Why You Should Sell Apple Inc. (AAPL) Today
Billionaires Portfolio: Apple Inc.’s (NASDAQ:AAPL) stock has topped out for now. If you own the stock, this is the time to take your profits. The stock hit the psychological $100 round number area yesterday. Both retail and institutional tend to trade into round numbers. I suspect they are selling into this one. The stock is up more than 80% from the bottom of April of 2013, a huge move for a $600 billion stock.
Many investors purchased Apple at a split adjusted price of $70 after Carl Icahn tweeted on August 12, 2013 that he had purchased millions of Apple shares and was going to actively push Tim Cook, the CEO of Apple, to buyback more Apple stock. Following that tweet, the volume that week was one of the highest for Apple’s stock for the year. So plenty purchased Apple to capitalize on the Icahn effect. Now it has a 42% return in a little over a year. This 42% return is now treated as a long term capital gain — another reason people will be hitting the sell button.
The last time Apple hit a major psychological round number was in December of 2007 when Apple hit an all time high of $200 a share. One year later the stock dropped more than 50%, down to $80 a share.
Regardless of what you think about the company or its fundamentals, sentiment drives Apple’s stock.
When investors become extremely bullish on Apple, like in 2007, or right now, Apple seems to stall or drop. Everyone who wanted to own the stock already owns it. When Apple is hated by investors, like in April of 2013, that is when you want to buy the stock. No one owns it, and you get a free ride once investors come back into the stock after a positive catalyst (like the Carl Icahn Tweet or Stock Split.)
Remember, the time to buy stocks like Apple or Facebook is when people hate them. The time to sell them is when they are loved and mentioned on the cover of every newspaper on the planet.
The insider behind the Billionaire’s Portfolio is William Meade. William started his career with Wood Asset Management. Wood Asset Management was a $1.5 billion dollar institutional asset management firm and hedge fund, founded by Gary Wood, a former Goldman Sachs Partner and Harvard MBA. At Wood, William helped manage equity and fixed income portfolios for major university endowments, Fortune 500 pension funds and super high net worth clients (including 2 billionaire families).
Next, William was Director of ETF and Mutual Fund Research for Zacks Investment Research in Chicago. At Zacks, he worked with the founder Len Zacks, a PHD from MIT, in developing and maintaining a proprietary model that ranked over 20,000 ETFs and mutual funds. This model was viewed and used by over 150,000 people monthly, and was published in US News and World Report, and featured on CNN, Yahoo Finance, and Fortune.com.
William received a Masters in Economics from Johns Hopkins University, including PhD level coursework in International Economics. At Johns Hopkins, Mr. Meade was taught by Economists from The Federal Reserve and Department of Treasury. While at Johns Hopkins Mr.Meade consulted for a top hedge fund in Washington DC.