Why I’m Not Selling My Apple Stock and Why You Shouldn’t Either.
By now you have probably heard the news about Steve Jobs’ medical leave of absence from Apple that was announced this morning. According to some reports Apple’s stock (AAPL) has already started to take a dip. It may dipping, but I’m not selling and you shouldn’t either. Here’s why.
Apple is one of the best run companies. While they are growing by leaps and bounds, their overall expenses have dropped by a percentage of sales. Their R&D and SGA (selling/general/administrative) expenses since 2005, have been shrinking from nearly 17.5% five years ago to 10.2% in 2010. Who is responsible for that? It most likely isn’t Steve Jobs, but rather, Tim Cook (Apple’s COO). Jobs has surrounded himself with top-notch executives – they know how to create great products and get things done the right way.
Tim Cook running the every day operations shouldn’t come to a surprise to anyone – it’s his job as Chief Operating Officer after all. Bottom line here is that I’m confident in Tim Cook and the rest of the Apple execs.
If that doesn’t comfort you or want to keep you from selling, consider the following. The markets are closed today in the U.S. Tomorrow is Apple’s quarterly earnings, which I’m sure will not disappoint. It may be worth holding to the stock just for that.
If those two things don’t calm your fears and you are really worried about it from a product perspective – don’t. The Verizon iPhone is a done deal – it’s coming very soon and will most likely be a smash hit. The iPad 2 is very close to shipping, which means it’s essentially a done product. I expect to see the iPad 2 be just as a big as a hit as the first iPad (probably even bigger). The iPhone 5 is in the works and will be released sometime in June (assuming we see a typical release schedule for the iPhone).
There are three huge products already in the pipeline which will have Apple set for another whole year. And don’t forget any Mac updates that come along within the next few months. This whole leave of absence couldn’t be timed any better. It was perfectly executed just like everything Apple does. I wouldn’t be concerned at all. This is one company you do not want to sell on a whim.
Nonetheless, get well soon Steve!
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