After being a bull since 1996, I am officially out of AAPL. Every stock has a "fair" value and I think $34 is enough for me for now. I sold my July options, Jan2000 options and stock yesterday, and hold nothing! I feel naked.
Basically, I can't live with the unbridled optimism. If they only meet estimates that will be viewed negatively, and its a long way down if they disappoint in any way. Unless the numbers are huge and good in all respects, the momentum players will exit. It was only 2 weeks ago we were in the high 20's and MacWorld wasn't very exciting. What has changed?
I *do* believe that AAPL will beat estimates, but my confidence is far less than it was in the 2 previous quarters. My worried negative scenario: $1.4B * 23.5% - $300 = $29 (23 cents eps diluted). And the analysts will find a flaw if there is any.
Here are the Q3 risks; not what I think likely but I do consider each possible:
1) margin drop (not enough PBooks sold to compensate?)
2) G3 sales disappointment (was that 750k retail or wholesale?)
3) expenses up (what delayed the PBooks?)
I still believe that AAPL will reach $40-$50 by the end of 1999. And I will back in spades if we see the 20's again.
Best of luck to all,
** David
PS. I also sold most of my AAPL last July because I feared that Amelio's departure signalled a terrible quarter. I missed the August Microsoft announcement, so obviously I have not timed AAPL perfectly. Feel free to ignore my fretting.
My last word: upside by Friday is $37, downside is $27. |
