Apple (AAPL) is Different This Time

Posted: Apr 27, 2012 12:01 AM

The furor over Apple stock brings to mind two statements that resonate through history in the investor’s graveyard.

First, I have to have it!  Second, this time it’s different! 

Let’s travel back in time for a moment.  Centuries ago, Frenchmen were lining up in droves in order to buy shares in John Law’s Mississippi Company. 

After all, North America was the new world and the riches to be derived from precious metals, furs, and commodities were practically immeasurable. 

Ships with settlers were traveling to the region to develop the land and enrich themselves.  Therefore, how could it fail? 

Both investors and speculators just had to own shares, the frenzy was almost panic driven. 

As expectations became reality, however, the frenzy to sell became just as emotional.  Unfortunately, there was no one left to buy. 

The same can be said for the dot-com meltdown, the housing bubble, and many other must-haves. 

The dot-com collapse could be excused because the technology was a new subject to all of us. 

Just like the Mississippi expedition centuries ago, the excitement and riches of the internet were just as real and fraught with danger. 

Also in hindsight, one could have some empathy as to why housing seemed like the never-ending cash cow. 

After all, Ben Bernanke did say “home prices never go down.”  On a lesser scale, but just as emotional, was the Beanie Baby craze. 

Yes, cloth dolls filled with plastic beans represented just as much financial illusion as all the other must-haves. 

But Beanie Babies?  Really?  Don’t be so smug. 

The percentage gains taken on the bean filled characters made other gains look small in comparison. 

For example, as housing jumped 20% to 30% in months, the Beanie Babies increased by 200% to 300% in just days. 

Yet once again, reality set in and those who had to have them, in fact, still own them.  Sadly, at much lower prices. 

Let’s just say that garage sales are definitely awash with collectables of the past. 

Fast forward to the present-day and the almighty Apple, a company filled with new must-have gadgets to keep us all connected.  Apple, the company with stores filled with customers and black shirted staff to answer all our Apple questions and satisfy our every Apple need. 

Apple, the company that manufactures in China and sells worldwide.  At $600, $700, or even $1000/sh, it’s a stock that everyone must own! 

In other words, Apple, I have to have it because since it’s Apple, this time it’s different!