“I will buy shares forever, keep it till retirement and live off dividends.” Well… NO. Today I sold entire position in Apple at open @$140.74. Why I did that?
Well, there are several reasons. First of all I would like to note that I truly believe that Apple shares will be more expensive 5-10 years from now that they are today. The reason I sold is that shares went up in my opinion way too high in short term (too quickly).
Look, I bought it below $100 in April last year. Now shares are traded $40 more. OK, even if there was a special occasion that time (yeah, it was) it is hard to imagine that business grew by 40% in such short term. Also keep in mind that now market is at ATH (all-time highs). I think that some market correction might come and optimism is too high. In such scenario I think that shares of Apple will go down and I will try to buy them back.
Also if we look on valuation it is almost 16 times earnings of 2017. OK, services are growing which should be traded on higher multiples and there is cash. One can argue that it is still not so much and way below the market. That’s true, but on the other hand historically company was traded on low multiples. I can imagine scenario, where one or two quarters are below expectations (which are high) and sentiment will cool a little bit. And all this positive hype with Warren Buffett buying…
We will see. I keep my fingers crossed for Apple, but I hope that in 3-6 months I will be able to buy back shares substantially cheaper than today.
Disclosure: AAPL – no position