Alomex,
I have no illusions regarding Apple Computer and I certainly haven't fallen for any spurious arguments. Apple is not a core holding of mine now nor is it likely to be in the near future. As a matter of fact I hold a great deal more stock in PC makers than I do Apple. I have been in Dell for 2 1/2 years as well as CPQ, although CPQ of late has not been a stellar performer. I have watched Apple implode since the 80's and the days when the Pepsi guy (Scully?) was in. The days of arrogance and a zillion models with no rhyme or reason to them. Then Amellio and..... Apple should be, and probably is, a case study on how not to run a business. I believe they could have made the Mac OS the dominant computer operating system years ago - should have, could have. An interesting theoretical discussion.
However, I still am a fan of the Mac. I have NT on my machine at work. My entire company runs on windows. Even with the promises of NT, I'm still not impressed. I've looked for years for a word to describe the OS when comparing it to windows, I guess the best I can come up with is sophisticated. Regardless, I think Apple has a future but I also think that their future needs to be managed very carefully. Management (the new CEO) earnings and sales all play a part. You raise some excellent points here. Jobs either needs to be in or out. Apple can't hire a guy only to have him breathe down the back of his neck. Their product line needs to make sense and they do need to follow through with their winners. Do they have a winner? Absolutely. G3 is an excellent machine that is exceedingly fast. It is truly a pleasure to work with one. They have truly been given a second chance with this one.
When I analyzed my upside potential with Apple and compared it to Dell and my CPQ holdings, especially if earnings are in line and they name a top notch CEO, it seems to me there may be a window of opportunity. I bought in at $25 1/2. If everything lines up, I think I could see this stock moving into the mid 30's by mid year. At $34.00 I have a 33% return. Even at $30.00 I have a 17% return. Conversely, to get 17% in Dell, at the $140.00 level, I have to see it go up by $23.80. To get 33% I have to get a $46.20 per share increase. I suppose it could happen with Dell, I hope it does, but the PE would be more astronomical than it already is. I thought it was expensive 20 points ago.
Apple could wind up being a dog. It bears a close watch with appropriate stops set. BUT this is the first time in quite a while that I have seen their collective act appear that it may be coming together this much. Regardless of the outcome, with Apple, the ride looks like it is always interesting. -Keith-
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