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Technology Stocks : Apple Inc.
AAPL 284.15-0.7%Dec 3 3:59 PM EST
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To: Robert Byron Nichol who wrote (1213)2/6/1997 12:35:00 AM
From: soup   of 213173
 
Robert,

Thanks for the compliment. I think I've been on hyperdrive over AAPL since the NeXT announcement and I'm due to taper off.

On AAPL's future for the next 12 month's. Don't know.

For what it's worth. A stock's lower level is often determined by book value or some percentage of the price that an acquirer might pay for the company (value investing.) The price will go lower if the market thinks the business's position is untenable and/or the management's intent on squandering it assets. That seems to be the case with AAPL.

The upper end of the range is responsible set by current earnings multiplied by the projected growth rate of those earnings (momentum investing.) Other factors, such as favorable publicity, mutual fund cash inflows gravitating towards large cap growth stocks (as we have seen for the last two years) can propel stocks to trade at levels far above (double) their projected growth rate (MSFT.)

I once read this: Successful stock picking is like trying to guess who'll win the Miss America pageant. The goal is not to determine who is the prettiest and most talented entrant -- but to determine who the *judges* will think is the most prettiest and talented entrant. The point is that there are multiple layers of subjectivity involved.

AAPL is clearly a value/turnaround play. No analyst who values their job would give it more than the most speculative odds for success. (For the record, AAPL's my only stock, the rest is in mutual funds.) Timing - Amelio said AAPL's remaking was a three year effort.

I guarantee one thing, if AAPL breaks through, the same analysts who hated it at 15 will love it at 60.

soup
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