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Apple Is So Cheap, You Can Buy It For Free

March 5th, 2013 No comments

There is so much chatter about Apple (AAPL) in the blogosphere and financial media, it’s getting ridiculous. I read some of the headlines and I cringe at how dumb some of them are. Look, I’m a writer in a sense as they are.  A very valuable company with broad ownership is gonna attract a lot of interest, they are simply supplying what the market wants: talk about Apple.

I’m done with talk, how about some action to make money with Apple?

As a value investor, it is difficult to convince people how cheap Apple is because the average investor who buys Apple isn’t a value investor and looks to make money through ‘growth’ or ‘momentum’. Right now, there isn’t any catalyst foreseeable that will offer these investors their opportunity so they have simply disappeared and have moved on to other prey. Without such a case, the market has simply abandoned the stock, waiting. Fortunately, there are financial instruments that you can use to make money when the market is overlooking a clear undervaluation story (or an overvaluation story as the the case may be) at any given time.

Don’t catch a falling knife. Don’t write articles about how cheap Apple is (or any other company is). Put your thesis into action to make money. Here’s how you can make money with Apple, read on.

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Putting My IB Margin Account To Work

February 26th, 2013 No comments

I wrote a couple of articles previously that talked about how to borrow cheap money from the Federal Reserve to buy stocks on margin. These articles were just talk and theory, today I will talk about a portfolio that I setup that puts this into action. It’s been active for about 3 months and has a return of 9.4% so far. This return was earned taking far less risk than a pure equity portfolio since it partially invests in corporate debt. Also, the equity investments have relatively high, but sustainable yields from quality companies.

You can do this, too, but likely not at the broker you currently use because their margin rates are too high.

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Looks Like Buffett Wasn’t So Enamored With The Heinz Deal Afterall, Plus Weekend Reading

February 23rd, 2013 No comments

Berkshire Hathaway (BRK.A) always gets a lot of attention when it make investments or does other kinds of deals. The latest investment by Berkshire in Heinz (HNZ) to take this company private offers some insight that it worth noting. What can be learned about this deal? My overall conclusion is that BRK.A got involved because the terms were OK, but not a screaming deal. Here’s why.

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Weekend Investor: A Realistic Look At Apple Plus Lessons Learned

January 27th, 2013 2 comments

It’s not a good time to be an Apple investor right now. It may be a good time to become an Apple investor. If you are an experienced investor, you likely will get excited when quality companies are sold off, especially for what may be dubious reasons. Since the stock is damaged, you can sit back and take the time to perform a good analysis. You will have time to establish a position, maybe for even lower prices.

The question is, what is the bull case for Apple today, if any? I’m going to look at Apple not how the typical Wall Street analyst or mainstream financial writer looks at it, but as a value investor would who is interested in owning a great business.

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Why You Should Pay More For A Good Company

January 8th, 2013 No comments

Investing is better accomplished with a cool mind,  good information and facts. When looking at how investors act in the market, they are far more rational and sane over extended periods of time than they get credit for. If we go back to the past 10 years, the dramatic drops in the stock market correctly occurred because future company earnings went down fast. This wasn’t an irrational response, it was a rational one.

This chart below demonstrates this point well. The earnings for the market (S&P500) were increasing up until the crisis occurred. Once the financial crisis hit, the market predicted future earnings distress. In an orderly fashion, stock prices went down.

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