Not about the quality of the phones dude, its the fundamentals of the stock.

I'll take Samsung S3 over Nokia Lumia 900 anyday. And yet NOK has made me 50% profit over the last 2 weeks.

S is another stock trending well. Was late to the party so only made 50 cents on the share oh well.

Disposed of S and holding NOK.

No need to be rude pinkdevil. You buy when the price is high, some people prefer other segments as opposed to shelling out 700 for a stock which is pricedfor perfection.

As for me, long NOK since 2.00 at 10,000 units. Gonna ride this baby till the 4s.......

Yes, priced for perfection means a company has to keep hitting record analyst predictions every quarter or the stock will fall sharply.

In a mature sector like say McDonalds or KO who are long term trenders this is not so bad. Or in an industry with relatively long contracts or a large and stable customer base - utilities or drilling operators.

But consumer electronics and EXPENSIVE consumer electronics in the face of a softening global economy?

You should get rid while you're at a good profit. Just my 2c.

I don't want to argue with you but I also don't want new investors to believe your hype and keep buying into AAPL without knowing what they are getting into.

Apple the company is a good solid company with strong past performance.
AAPL the stock is (IMO) overpriced and speculative play with a more than even likelihood of becoming a long-term value trap at current valuation. Any fundamental investor should be wary.

Why the divergence? Let's discuss.

1. Historical. AAPL is at current valuation the most valuable company in the history of the world ever at a time when the S&P is close to its historical highs. If you buy into this stock at this time what you are effectively saying is you believe the most valuable company in human history ever is about to become even more valuable at a time when the global economy is looking at another dip and the S&P is due for a correction.

Does that make sense? Not to me.

2. Analysis. Forward PE is useful when analyzing a stable market segment or a long-term trender. But consumer electronics with a lifespan of only 1-2 years for each product and where trends change like the wind is hardly a stable trend, and hence it's importance is greatly reduced in this case. Whats more AAPL has only really 2 major products, iOS and OSX albeit on several different form functions instead of a basic necessity like oil or food.

Thus, although AAPL's PE is outstanding now it can easily change.

Let's also not forget their greatly limited product range - they have maybe 3-4 (max) product launches (Mac/iphone/iPad/AppleTV) per anum. If one of those products fail it would have a severe impact on financials and thus PE.

3. Margins. AAPL is so succesful despite its tiny share of the PC and smartphone market due to its high margins - it is able to make sucke- errr consumers pay over the odds for its electronics. This success is admirable.

However the world is slowly descending into an economic recession plus additional competitors are giving added pressure to iDevices on all fronts from Windows 8, Android, WP8.

So to meet analysts predictions, AAPL needs not only to grow its market share in a competitive environment but also maintain its sky-high margins in the face of a global economic downturn. Big ask? Yes.

4. Trends. AAPL has met or beaten analysts expectations almost every time in the last 5 years (they only missed twice). This is why the stock has soared to $680. Very good, however, past performance is not always an indicator of the future, despite the past performance being priced in. This is like saying a football team has already won 9/10 of their last matches, hence you now place a bet for them to win the next 9/10 despite the bookies severely cutting the odds in their favor.

In other words - your reward is mostly priced in but yet your risk is not.

5. Buyers. People forget that to increase in value a stock must have (new) buyers at the point you want to sell in the future. Assuming your prediction that AAPL will soar to $1000. The question is, there must be people out there who are willing to pay $1000 in the near future (2-3 years) for a single unit of Apple stock? Why would they do so, presumably because they must see an upside to $1100++? Bear in mind that AAPL's dividend is extremely insignificant.

Thus you are pre-supposing that at some time in the future, the most valuable company in the world right now will presumably double in value to just to double your initial investment of $500++.

That is a lot of presumptions.

Past performance is not an indication of future achievement.

Apple's growth rate has been phenomenal. BUT you did not buy the share 5 years ago you bought it now. Expecting the company to maintain a similar growth rate is not only highly optimistic it is not even logical.

Especially when said company already has the largest market capitalization in history

LOL you read some analyst report and thought you were smart?
Forward PE = based on projected earnings.

ie, if the projected earnings are off, the actual PE is in reality higher.

Now, basing stock picks solely on analyst forward PE and not fundamentals, THAT's the classic.

Ok kid, you can keep betting on Apple to continue its unprecedented run beating the odds and to "double earnings" in spite of the global slowdown.
Just don't pretend you are investing on fundamentals - call it what it is: speculation.

Absolutely buying NOK is speculation - and I have never claimed otherwise.

The difference between us? I am buying NOK with eyes open as a speculative turnaround trade while you (if you can be believed) are buying a speculative permabull trade as a fundamental portion of your portfolio. That makes one of us delusional. Guess who.

Before you tout the old 120B of cash blah blah, remember, that:

AAPL is trading 6 times NBV while PSR is only 1.6 (just barely positive above the margin of 1.5).

To put those numbers in perspective, to reach your touted $1000 share price (market cap: USD$1T):

To maintain the same NBV & PSR ratio, AAPL will need to double its net book value while annual revenue will need to grow by another 70% minimum.

All this while already being the most valuable company in history.

Logical? Well I suppose miracles do happen.........

Bears make money, Bulls make money, Pigs get slaughtered........