Mac Musings

Daniel Knight - Tip Jar

Owning AAPL

Oct. 18, 2000 - email Daniel KnightDan Knight

Apple stock fell below $20 a share Wednesday morning, prompting me to finally put my money where my mouth is and invest.

I first tried signing up with E*trade, but they wanted signed forms mailed to them with a check. I wanted AAPL today.

I dug up the email Wes George of Mac Observer sent about online brokerages. He had also suggested Ameritrade, so that was my next stop. They accepted my business on the spot. I moved $2,000 from checking.

Watching AOL Instant Messenger and My Yahoo, I saw AAPL had recently traded at $19.44 per share. I put in an order for 100 shares at $20.00. Too late. Next 95 shares at $20.50 a share. Still too late. Then 95 shares at market rate, which was $20-13/16 when the transaction was completed. (I do look forward to the stock market going decimal!)

I'm not one of the big fish, but today I am an Apple stockholder. (I wonder if that gives me more credibility with Steve Jobs.) I firmly believe AAPL will increase significantly after the Wednesday earnings report. My guess is I could turn a profit on Thursday - or let it ride through the holidays into the $40-50 range.

I'm investing for the short term and the long term. My plan is to sell half my shares (45 or 50) when AAPL gets to about $42 per share. That will recoup my entire investment; I can let the remaining 45-50 shares sit there until the sun burns out and lose nothing (other than taxes on my profit) even if Apple should go out of business.

Regardless of how all that plays out, I believe that Apple stock is very undervalued (see the above chart). Time will tell if I'm right.

UPDATE: Apple announced profits of $170 million or 47¢ per diluted share, far better than anyone had expected. AAPL closed the day at 20-1/8.

Disclaimer: I am not an investment advisor. The opinions expressed here are my own opinions. Don't bet your future without making your own analysis.

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Dan Knight has been using Macs since 1986, sold Macs for several years, supported them for many more years, and has been publishing Low End Mac since April 1997. If you find Dan's articles helpful, please consider making a donation to his tip jar.

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