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Sun, Nov 08, 2009 - 04:18 AM EST  —  AAPL: 194.34 (+0.3099, +0.16%)  |  NASDAQ: 2112.44 (+7.12, +0.34%)

Laura Goldman: Owning Apple stock is a spiritual experience devoid of logic
Wednesday, February 06, 2008 - 11:58 AM EST

"After the introduction of the iPhone Macworld 2007, I recommended to sell Apple. My sell recommendation was based on the old Wall Street axiom, 'Buy on rumor, sell on news,'" Laura Goldman writes for Globes Online.

"Dead right is the best way to characterize that advice. It was one of the worst stock recommendations of my career," Goldman writes.

MacDailyNews Take: She's confusing already. We assume she means that the axiom is sound as opposed to her AAPL "sell" recommendation.

Goldman continues, "At the time that I suggested selling it, the price of Apple stock was $111. After my sell recommendation, the stock zoomed to $200 a share. With the recent 20% correction on Nasdaq, Apple’s stock has plummeted 34%."

MacDailyNews Take: Apple is currently up 16.2% over Goldman's "sell" recommendation at $111. How's that for logic?

Goldman continues, "I have been tearing out my hair about the meteoric rise of Apple’s stock because my reasons for selling the stock were correct but the market just shrugged its shoulders at my concerns. The biggest flaw in my thinking was forgetting that owning Apple stock is a spiritual experience devoid of logic. Steve Jobs is the Dali Lama of technology. It is impossible to quantify the valuation of Apple strictly by the numbers. Hype is a legitimate ingredient in a stock price so I was wrong to exclude it."

Full article here.

[Thanks to MacDailyNews Readers too numerous to mention for the heads up.]

MacDailyNews Take: Goldman was wrong. It has nothing to do with her trumped up "spiritual experience devoid of logic" excuse. In fact, logic abounds. After her recommendation in May 2007, Apple went on to sell 20,000 iPhone units per day for 200 days.

I am putting a sell on Apple, the company that created the iPhone... One of the oldest axioms on Wall Street is "Buy on rumor, sell on news." Steve Jobs’ Svengali-like performances and the take-your-breath-away beauty of the iPhone has deflected the hard questions until now. I would rather sell before the questions are asked or, even worse, answered. - Laura Goldman, May 21, 2007

Apple makes a profit on each unit and derives significant ongoing revenues from each "locked" iPhone which, regardless of the copious amount of moronic reports floating around, constitutes the majority of iPhones sold. Anyone who looks at iPhone's deferred revenue can see that Apple is primed to basically print money for the foreseeable future. After Goldman's recommendation, Apple iPhone's went on to grab 28% of U.S. smartphone market share just months after its release. iPhone has been an unqualified success. It has disrupted the entire mobile phone industry. Goldman's advice was stupid and completely wrong and cost anyone who listened to her at least 16.2% profit.

Even with the market's irrational, over-punishment of Apple shares over the past month, If you bought when Goldman said "sell" and sold right now, you've made 16.2% on your investment. On that fact alone, Goldman has forfeited any realistic chance of her Apple-related financial advice being taken seriously. If anything, take what she says and do the opposite. It's telling that in her article Goldman fails to make a recommendation as to what to do regarding AAPL now.

Apple's latest quarter set records for revenue ($9.6 billion) and net quarterly profit ($1.58 billion). Apple blew away expectations with record Mac shipments (2.319 million), and also achieved record iPhone sales (2.315 million) along with record iPod sales (22.121 million). The Street punished Apple because they fear a recession and because Apple didn't promise them what they wanted for the upcoming quarter. Apple merely promised Q2 08 revenue of "about $6.8 billion," which would be 29.3% over Apple's Q2 07 posted revenue of $5.26 billion. In other words, the ever-conservative Apple expects their business to grow 29.3% year-over-year in Q2 08. Sell, sell, sell!!!

With iTunes Movie rentals, the new Apple TV "Take 2" software update coming, larger capacity iPhone and iPod touch devices, booming Mac sales, the iPhone/iPod touch SDK looming, 3G iPhone, the world's best OS, and more - Apple continues to fire on all cylinders. We agree more with those who think that AAPL at these prices represents a buying opportunity than with those who think that people own AAPL because it's a "spiritual experience devoid of logic."

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Feb 06, 08 - 12:01 pm Comment from: rsbell

She's baaaaack...

Feb 06, 08 - 12:02 pm Comment from: macromancer

Well if we needed a stimulus to get the stock rising again, opening her fat yap and dissing the stock should do the trick.

Feb 06, 08 - 12:03 pm Comment from: G4Dualie

Jane you ignorant slut.

Feb 06, 08 - 12:04 pm Comment from: Whatever

And they come crawling out of the woodwork now....

Feb 06, 08 - 12:06 pm Comment from: Ouate de Phoque

As a spiritual being having a human experience, let's hope my mortal side suffers additional profits from AAPL. smile

Feb 06, 08 - 12:08 pm Comment from: Buster

A spiritual experience devoid of logic? Having gobs of cash reserves and new, desirable and ultracool-well engineered quality products continually coming out and of course the added illogic of general dissatisfaction with VISTA, she is probably right....there is no logic here why Apple shares went up to $200.

What a waste of good DNA.

Feb 06, 08 - 12:10 pm Comment from: Steves Job

Actually, the expression is "buy on bad news, sell on good". Imagine of you bought Apple purely based on rumour - there is so much wishful thinking out there that it clearly has no correlation with the performance of Apple stock.

Feb 06, 08 - 12:16 pm Comment from: viktor

heheheh, she was waiting for all this time for the stock prices to fall, but since the price did not drop lower that $111.00, she could not wait more. Any way, she get it all wrong.. again....

Did any one noted that "HOUSE MD" changed all their DELL equipment for Apple Macs? (in season 4), also, that Dr. Amber Valasky is using a iphone (in the CIA chapter).

Feb 06, 08 - 12:17 pm Comment from: Ampar

I wonder how many of us submitted this story?

Feb 06, 08 - 12:21 pm Comment from: It's About Time

This lady is a legend in her own mind. smile

Feb 06, 08 - 12:21 pm Comment from: Ampar

" . . . changed all their DELL equipment for Apple Macs?"

I'm still reeling over Fox News using MBPs with the glowing Apple logo in plain sight. Although, it could be a paid for product placement.

Feb 06, 08 - 12:24 pm Comment from: Rich Apple person

Why should this surprise anyone? Wall Street is not concerned about long term health they want instant gratification. Yes Apple had a record quarter but to the street that means that now their business will go down. Yes they introduced the Mac Book Air but to the street there are no new products like there were in 2007. I am sticking with Apple Stock it may take a beating now but if anyone has doubts about this company then they don't know it very well.

Feb 06, 08 - 12:24 pm Comment from: crawford

inane.

Feb 06, 08 - 12:28 pm Comment from: CheekyGit

Speaking of House MD, the "Cut-throat bitch" (Amber) is back and dating Wilson (eeww) and number "Thirteen" is bi-sexual. YESSSSSS!!!!

This show gets better and better.

Feb 06, 08 - 12:34 pm Comment from: DLMeyer

I should point out, in her defense, that
a) she wasn't alone in that opinion - actually in the majority
b) based on leading P/E, "sell" is still the "common wisdom"
c) owning AAPL is most certainly an act of faith, not logic
So ... how come I just bought several thousand$ at $133? Because a) I'm a believer and b) I'm not of that opinion.
Sure ... I should have followed good advice and bought in four batches - a batch each week until it settled - but I was half expecting it to "bounce". I was only half wrong, eh?
Dave

Feb 06, 08 - 12:43 pm Comment from: DLMeyer

CheekyGit ... we may well be wrong on both counts. "Amber" acted like a stressed-out "cut-throat bitch" while she was going for the job, but that may well be just her stressed-out persona. She seems much calmer now, and a bit less 'cunning'. Hmmm ... even more like House? And "Thirteen" has neither confirmed nor denied any of the crap thrown at her by House or the other Fellows. "What makes you think that?" was her previous answer. She is exceedingly NOT forth-coming on such personal matters.
The first appearance of an MBP on the show was borrowed from a patient, the latest is obviously House's. Yeah ... gets better and better.
On Topic: Unlike traditional analysts' takes on the price of AAPL.

Feb 06, 08 - 12:50 pm Comment from: Think before you Click

So she made a moronic suggestion, and she's following up with an even more moronic rationalization.

But hey - you know her name, and she's getting page views.

Feb 06, 08 - 12:53 pm Comment from: Ampar

"This is a cover-your-ass article."

There isn't nearly enough article to achieve such a monumental undertaking. I doubt Christo could do it even with unlimited time and funds.

Feb 06, 08 - 12:56 pm Comment from: Zune Tang®

I did a little research. Laura Goldman is actually the daughter of Oscar Goldman who headed the top-secret bionic program for the Office of Scientific Intelligence (OSI). I would say that gives her quite a bit of credibility when it comes to technology matters in the market.

She talks circles around your MAC lemmings' "oohh, my I-Phone is so expensive and pretty" arguments with clear, concise well researched data. You MAC sheep are out of your league on this one.

Your potential. Our passion.™

Feb 06, 08 - 12:57 pm Comment from: K_Shaw

"I have been tearing out my hair about the meteoric rise of Apple’s stock because my reasons for selling the stock were correct but the market just shrugged its shoulders at my concerns. "

Like her concerns matter or that the market "hears" them...

Feb 06, 08 - 01:00 pm Comment from: sean

...and Hillary complains that women don't make enough----how about taking salary away from some of these idiots...

Feb 06, 08 - 01:01 pm Comment from: KingMel

iCal for future enjoyment

Feb 06, 08 - 01:04 pm Comment from: anthony007

I don't know, with each passing day that the stock tanks she looks more and more like a genius.

Feb 06, 08 - 01:09 pm Comment from: Demon

Spiritual? Well I guess you could say the cash in my pocket is a type of spiritual feeling.
Buy any stock at less then $20.00/share (and make an investment of over $20,000.00 on it hold it through 3 splits) and how it's over $100.00/share on it's way back to the road of over $200.00/share I'd call that a religious experience.
It's even better when you sold a small % of the stock at $201.87 made a huge chuck of change and then plan on reinvested in the same number of shares you sold with a buy at $125.00.

Feb 06, 08 - 01:21 pm Comment from: dddd

yes... It has returned over 1500% since I bought it... spiritual? that is nirvana

Feb 06, 08 - 01:24 pm Comment from: KenC

Well, if she's giving investment advice, then she's an idiot, because the "buy on rumor, sell on news" is a trading strategy, not an investment strategy.

Feb 06, 08 - 01:26 pm Comment from: A Friend at Apple

Don't confuse the quality of Apple's products
with the value of Apple stock at today's prices.

Just like home prices can't go up forever;
no stock price can go up forever.

What is the earnings yield on Apple stock?

Do you consider a low single digits yield a great value?

If AAPL was US$ 500.00 a share would you still be
saying the same things about how it's a great time to
buy AAPL and it's never a good time to sell?

At least she had the wisdom to know that sometimes
selling a stock is the right investment decision.

She was wrong on the timing of her recommendation,
but people who can't imagine the possibility of ever
selling AAPL are not serious nor wise investors.

Feb 06, 08 - 01:27 pm Comment from: KenC

And, is she now spinning that the rumor of the iPhone was better than the reality/news about the iPhone? What rumor sites had anything about multitouch?

Feb 06, 08 - 01:32 pm Comment from: mAc-warrior

@ Ampar

"I'm still reeling over Fox News using MBPs with the glowing Apple logo in plain sight. Although, it could be a paid for product placement."

Apple doesn't pay for any product placement, be it movies, TV, print ads, whatever. They merely ask that the context surrounding the placement be approved by Apple in advance. None of the placement of Apple products in the media is ever paid for by Apple.

--mAc

Feb 06, 08 - 01:46 pm Comment from: PorradaVFR

"I have been tearing out my hair about the meteoric rise"

Odd, since meteors tend to fall.

Feb 06, 08 - 02:08 pm Comment from: Thisson

Who cares what she thinks? She's a nobody.

Feb 06, 08 - 02:21 pm Comment from: pete

"buy on rumor, sell on news" is considered a reason?
Ok. Let's apply that this time around. I mean pre-Macworld and pre-earnings. Her reason would have compelled to buy around 200 and sell around 160 during Macworld. Followed by another drop after earnings.
How about flipping a coin for a reason?

Feb 06, 08 - 02:32 pm Comment from: Hoot

Lots of you folks are lucky. I did not buy at 10 or whatever. I bought 1000 shares at 170. Had I sold at 200 would have made 30K, but of course I still have them. 125 today and each day it goes further south--so I am out 45K if I was to sell. Actually down 75K from the top. I am starting to think $111 is the ultimate price it will settle at. I bought on emotions, in my mind I sort of knew it was way overpriced.

Feb 06, 08 - 02:39 pm Comment from: en

MDN,
Excellent post. Laura is just WRONG again. You got it right.

And as far as the stock price, I am so glad it came down. I finally got a chance to buy a share or two at a price I could afford. It will bounce around here for a while while the market settles, then someone will notice that Apple has been making money hand over fist for years. Suddenly there will be this rush to get back on board as it rises (which will make it rise even faster grin ).

I am just taking a breath and thinking, "Is there a way I can find a few more bucks to put on Apple before it starts its rise. If it hits 250 by years end, that will be over 100% growth. Try that on a money market fund. grin

en

Apple, Like the Wild Toad ride for kids at Disney.... one fun wild ride. grin

Feb 06, 08 - 02:54 pm Comment from: Uh Oh

Anyone know why the stock is falling faster than Britney's panties after an all night bender?

Feb 06, 08 - 03:02 pm Comment from: Ampar

mAc-warrior: Good point. You're right.

Feb 06, 08 - 03:12 pm Comment from: Whatever...

Who cares what Laura Goldman says/said... the stock is in the crapper with no signs of a turn upward or a bottom, for that matter.

Feb 06, 08 - 03:40 pm Comment from: Majikthize

Ah, so Laura foresaw a general stock market meltdown in the U.S. a full year in advance? Because AAPL's tumble has little to do with Apple's performance and much to do with subprime lending.

Whatta ditz!

Feb 06, 08 - 03:43 pm Comment from: Jake

AAPL is now below $125--this is complete horses**t, therefore it can't last. If I had some extra cash on hand to buy more shares in AAPL, I would do it. I already bought more a couple of weeks ago.

Feb 06, 08 - 03:59 pm Comment from: leon Gelernter

stupid chick

Feb 06, 08 - 04:12 pm Comment from: Connor MacBook

Since when has ANY trading been based on logic?

Feb 06, 08 - 04:13 pm Comment from: iDon't

Laura Goldman is a goddess.

Feb 06, 08 - 04:30 pm Comment from: Ampar

"Anyone know why the stock is falling faster than Britney's panties after an all night bender?"


Because they are both bipolar?

Feb 06, 08 - 04:33 pm Comment from: Laura Goldman

I think after today, you will acknowledge that I am fucking brilliant. Welcome me, your stock goddess overlord, you freakin' peons.

Feb 06, 08 - 04:34 pm Comment from: Uh Oh

@Jake
So what is it now that's 122?

Feb 06, 08 - 04:50 pm Comment from: Okanagan Apple

This Lady probably had a sell on Google at $85, on Bidu at $90, On ISRG at $30. Value investors don't understand growth, they only understand existing earnings. Even Karen Finerman thinks Apple is in her Value Wheelhouse at this price. No Kidding! For such a mature company to continually bring on awesome products is truly remarkable. Let this lady go value the oil companies...she doesn't know how growth is valued, nor does she realize that growth stocks also hold more volatility. So when it falls harder, that isn't news, that's stamped in history with every other growth company.
Duh!

Feb 06, 08 - 04:58 pm Comment from: An Aussie with some spare change

Forget about just looking at the AAPL stock, what's the overall vibe in the U.S. right now. Are things starting to climb, still dropping, hovering. Are you out of the woods.

Feb 06, 08 - 05:46 pm Comment from: Prediction is difficult

Here's another one:
Apple shares to hit $300 in 2008?
http://www.macdailynews.com/index.php/weblog/comments/apple_shares_to_hit_300_in_2008/
MacDailyNews Note: On September 19, 2007 (with Apple shares closing that day at $140.77), Georges Yared wrote, "This may be your last chance to buy [AAPL] here under $150." On September 25, 2007, four trading days later, Apple shares closed at $153.18. Apple shares have not been below $150 since. On November 24, 2007, Yared wrote, "Currently Apple is at $171 and this may be your last chance to buy it below $175." On November 28, 2007, three trading days later, Apple shares closed at $180.22. Apple shares have not been below $175 since.

Today, Goldman advice is more sound than Yared/MDN advice, but tomorrow it may be the opposite. You'll know tomorrow.

Feb 06, 08 - 06:39 pm Comment from: Hm...

Laura Goldman epitomizes the phrase Delusions of adequacy!

Feb 06, 08 - 08:24 pm Comment from: MacSmiley

Aww, give the woman a little credit. She did make one statement that made perfect sense:

"It is impossible to quantify the valuation of Apple strictly by the numbers."

Whatever the price of Apple's stock, we all know there's a little something extra that's hard to put a price on, which comes with every Apple product.

Feb 06, 08 - 10:12 pm Comment from: Unemployed drifter

Laura is only $11 away from being vindicated. Apple's stock is really tanking.

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