I'll start with the fact that I am not an investment advisor. Anything I write here is strictly my opinion and should not be construed as advice. It's simply the way I invest and see the market.
Well, I was met with much joy today. Apple stock down $15.50, just a bit over 10%. I've been investing since 1991. I even remember the my first investment, in a little mutual fund called Monetta Funds. I liquidated that in the late 90's for a 30% gain so I could wildly invest in anything with "Tech" or "Silicon" or ".com" in the name. And those I did pretty well in, probably average 20% gains, although mostly short-term, so I paid through the nose in taxes. I would have done better, but I waited until I was sure the tech boom bottomed out before bailing.
Back to Apple. The first shares I bought about 3 years ago are at a cost basis of about $15/share. So I have a 10x + gain as of the current market value about $150/share. Today's drop is in part because Apple is only predicting a Q4 earnings per share of $1, when analyst's had previously forecasted $1.23/share. This reminds me of CVS Caremark (back then just CVS Corp) in around 2004 when they announced a penny difference in EPS and their stock dropped 15 or 20 percent.
What's wrong is that both Apple and CVS in their respective big drops are that they are still profitable companies. Investors panic. I am not saying Phil Gramm was right that the economic problems are mental, but these two instances and the tech boom are instances that the market is not for the faint of heart.
Long Term is the way to go. I said I bought my first shares of Apple around $15? I worked for CVS and started in their Dividend Reinvestment Program in 1992. They started an Employee Stock Purchase Plan in 1994 or so. My shares cost me between $6 and $20 per share in that timeframe. Current market price? About $40/share. How's that for growth?
My point? The market is all one big mental pot with millions of brains in it. But clearer minds prevail in the long run.
Again, I am not an investment advisor, however I do still own shares of Apple and CVS Caremark. Do not take this information as advice without seriously researching the equities you plan to purchase.
