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."


She's baaaaack...