Wednesday, January 10, 2007

A rising Apple doesn't teach about gravity

== Apple ==

I hope you bought Apple when I called it a buy last year in the fifties, and if so you can think of me as it approaches a hundred and smile!

I wouldn't buy more shares right now until we see more of how the iPhone shapes up. From early inspection I would say almost everyone will want one. Some people say the price is high but I carry an ipod, a cell phone, and a blackberry already. If the iPhone can truly replace all those while also offering GPS services and better usability it's basically free because of all the other gadgets I don't have to buy.

I think the iPhone should be a hit, and it could easily justify the current price spike, but the stock is pricing in a pretty successful future already and an economic downturn would hit the stock hard.

== Guest experts ==

A quick visit from guest experts today, courtesy of WSJ.com

This bit of advice from Henry Blodget
, the former securities analyst for Merrill Lynch and a booster of Internet stocks during the dot-com boom of the late ’90s, might seem a bit odd: Don’t buy over-hyped stocks. Specifically, Mr. Blodget, who now can mostly be found posting entries on his Internet Outsider blog or writing columns for other publications (in this case Slate), is referring to those beginning-of-the-year “10 Stocks To Buy Now” articles found in magazines like Business Week, Fortune and Money.

“Whatever you do, do not buy the 10 Stocks To Buy Now, at least not because you read about them in some magazine,” he wrote on Slate. “If you want to buy the magazine, fine, just don’t buy the stocks.” He notes that magazines are no better at beating the market than anyone else — and in some cases worse.

Nouriel Roubini, who has been bearish for some time, points out the current state of affairs when it comes to riskier mortgages, and doesn’t like what he sees. “Calling this entire system an ‘unregulated scam’ is certainly excessive and exaggerated but the above metaphor captures some of the excesses of the last few years. And now this entire house of cards is coming down crashing,” he writes.

Stephen Vita, writing on Alchemy of Trading, says he probably should have bought shares of Apple, but doesn’t have too many regrets. “It’s ingrained in me to think that you shouldn’t do Breakout Trading in the 5th year of a cyclical bull market and, moreover, that the best time to practice that art is at the beginning of new advances, especially brand new advances coming out of bear markets,” he writes. “So I did quite a bit of that in 2003-2004 and I’m doing almost none of it now.”

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Other blogs worth looking into:

Invest well,

FW
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