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No. of Recommendations: 14
Sometimes all I can do is shake my head in disbelief. NOTE: I can't really take credit for being smart about this. My wife put me on to AAPL when she bought an early iMac and said they were flying off the shelves. I checked AAPL out and decided it was a relatively safe value style investment. Were it not for my wife's suggestion, I wouldn't be writing this.

I ran the numbers for the CAGR since first purchasing AAPL in February, 1999. I'll admit I cheated and rounded down Friday's close to 170 instead of 170.15, but don't see that it makes a lot of difference,

The CAGR came up at 28.8%. This does not include dividends.

I have a highly concentrated portfolio. AAPL represents a considerable percentage. So I asked myself, what would happen if AAPL's share price took a 90% nose dive (to 17). That reduced the CAGR to 14.13%. Again, this does not include dividends. The funny thing is, when I bought AAPL in 1999, I looked at AAPL as a value stock with a huge margin of safety. I figured it would be a nice, safe, steady stock that might grow 15%/year at the top end. To say AAPL has been wildly successful is actually a major understatement. Ironically, AAPL is still a value stock.

What about a margin of safety currently? Why not start liquidating and diversifying?

Well, AAPL's current dividend represents a 183% return on original investment. That's simple interest, I'm not reinvesting the dividend and I expect the dividend to be raised 8-10% next year. The total return of dividends alone to date (2012-2017) has repaid the original cost of purchase 7.9 times over.

A 5% increase in AAPL's share price (to 178.50), when compared to cost basis, would represent a 616% increase. An increase in share price to 200 (entirely possible within the next 6 months) would represent a 2173% return when compared to cost basis.

I've heard AAPL criticized for depending so much on iPhone revenues. Ironically, I have yet to hear an analyst criticize Boeing for being too dependent on the sale of airplanes. I have yet to see any rational reason why it would be in our best interests to start liquidating AAPL.

Please don't get the idea I'm recommending that anyone buy AAPL. I'm not. The law of large numbers essentially prohibits the kind of growth that has happened in the last nearly 19 years. It was a value stock that suddenly started growing like it was an invasive species. It's back to being a value stock. The days of super rapid growth are behind it.


Law of large numbers:

https://www.investopedia.com/terms/l/lawoflargenumbers.asp

The day AAPL fell 50% in a single day.

http://money.cnn.com/2000/09/29/markets/techwrap/

Churchy
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