Mac Musings

Selling AAPL

Daniel Knight - 2001.12.05

A little over a year ago, I put $2,000 into an Ameritrade account and bought 95 shares of Apple stock (AAPL) on October 23, 2000. I talked about the purchase in Owning AAPL. This was the first time I had purchased stocks.

All things considered - like the fact that I only received two weekly paychecks from Low End Mac in October and none in November - I decided it was time to put principles aside and have the money necessary to meet our daily expenses (click here to learn about making a donation to Low End Mac). So this morning I logged onto Ameritrade and placed a sell order. I was very pleased to see that my 95 shares were actually worth more than when I bought them.

Here's the brief rundown:

10/18/2000  Deposit $1,000 in Ameritrade account
10/23/2000  Buy 95 shares of AAPL @ $20.8125/share, $1,977.19 total
12/05/2001  Sell 95 shares of AAPL @ $22.27/share, $2,115.66 total
            Balance of $2,124.07, Net profit: $124.07

And then tell Ameritrade to send me a check, which should arrive in a few days. Over a little over a year I netted a 6.27% profit - better than the bank pays.

Lessons Learned

First, be sure to invest money you can leave invested. That was the plan. I was expecting to earn as much running Low End Mac as I earned doing IS full-time last year. (Last year I had site income in addition to what I earned at my day job.) That was the plan. Instead, I'll be lucky to pull in 60% of last year's salary. Thus the need to convert my long term investment into cash today.

Second, know what you're buying. AAPL dropped a heck of a lot from the $21.81 a share I paid for it. It also has the potential to go back up to the $50 range, in my humble opinion as a Mac advocate. And it's worth a rock bottom price of about $11-12 a share based on cash on hand and other assets. I knew there was little chance of losing a lot and a good chance of making a nice profit. AAPL stock fluctuates a lot - that alone could make it very attractive to day traders.

Third, watch the company, the industry, and the market. For instance, AAPL doesn't necessarily follow the market. I'm guessing the flat panel iMac rumors are what drove it past $23 a share today. Learn how AAPL responds to different kinds of news.

Fourth, keep your priorities in line. I'm working a couple shifts a week in a local camera shop and still putting pretty much full-time hours into Low End Mac. One brings in money; both should. For now, the money from the stock sales means we can buy groceries, pay utilities, put gas in the car, that kind of stuff. I'm sure things will turn around at LEM (if not, I guess I'll make it a hobby site and go back to work outside the home full time), but when it's over a month between "weekly" paychecks, priorities say, "Sell the AAPL. Don't dip into your 401(k)."

Will I buy AAPL again? I'd certainly like to. It's been fascinating watching the daily gyrations, and I believe Apple is a good long-term investment.

But today there are bills to pay.