Yesterday someone stole my watch. I happened to have walked out to accompany my wife, Lisa, to the grocery store two blocks away and when I came home it wasn't on my arm. At first I thought I had taken it off for the Lighting Round, but when I checked the dais there was nothing there. I freaked out and figured it had to be between when Lisa handed me the bag of ice she let me carry and when I walked out the door.
I was furious.
Someone had taken my Apple watch and now what would happen? What would I do. Lisa saw how distraught I was and came downstairs to an obviously disturbed husband. She sat down to deal with the situation practically and while I was prattling on about how angry I was -- My Apple Watch -- she reached underneath where she was sitting, and when I had started my "bother to call the police" soliloquy, she said "this Apple watch?" My heart stopped racing, something it would have measured and I received the lecture I deserved.
Now I want to give you a lecture someone deserves about Apple (AAPL) and why, beyond the beyond-despair fury of the stolen watch I hope she and others learn about how much Apple means to people and why it's worth owning and not trading.
About two weeks ago, March 30 to be exact, the very smart analyst from Bernstein, Toni Sacconaghi, was on CNBC being asked about whether Tesla (TSLA) , off 15%, or Apple, down nearly 10%, were worth holding on to. Quite eloquently, Toni, talked about how it had gotten too high and mentioned that the top 20% of technology stocks are trading at 17 times revenues, the highest since the technology bubble.
I, myself, have lamented this statistic. So far so good.
But then he said something that nobody will really remember, nobody but me: "I would be looking to sell, to sell positions in Tesla. For Apple I'm not sure there's a catalyst in the next six months. It had a great run last year," he went on. "The challenge is that its valuation is at six or seven year highs and perhaps more importantly there is not a real catalyst." He then traced out all of the good news that you got last year and how it would now be up against difficult comparisons.
I am willing to spare him the mistake of saying to sell Tesla's stock: it was at $626 that day, and it now trades at $762, because Tesla is a wild trader.
However, I am not going to spare him Apple because his comments are textbook about why I say own it, don't trade it. Everything that Toni said about Apple is true. Every bit of it. He's a terrific analyst when it comes to the facts and figures of valuation. He's very compelling. Too compelling and that's' really the problem. He speaks with great authority about the company, but the stock is NOT the company as anyone who decided to sell it after Toni's answer knows because it was at $119 and it is now at $134.
Should you be angry at Toni if you sold? Absolutely not. You should be angry at yourself for thinking that you could somehow get out and then get back in again six months later. We don't know why Apple's has been rallying. We almost never do. But it's precisely because of this very clinically dismissive call that I keep saying own it, don't trade it. Toni, backhandedly, made you feel uncertain enough to sell. To which I say, what do you do now? Buy it back at $134? Maybe. But maybe it would have just been better, once again, to heed my admonition, created precisely for moments like these.
Now, you may ask, how could I know more about Apple's stock than one of the best analysts on Wall Street. Me, who covers hundreds, no thousands of stocks, and he a specialist, who covers the important techs?
Simple. It's the watch. You see, I can't live without it. The watch, like the phone, is how I live. I was trying to imagine what tomorrow would be without my watch, which I had taken off at the behest of a podcast producer who didn't want it going off. Something that was an afterthought accessory when I bought it, had become a necessity I couldn't live without just a few years later. Toni's smarter than I ever will be about Apple, the company. But me, I know about Apple the watch, or Apple the Mac, or Apple the iPad, or Apple, the bills I pay without even noticing. They are why I have been right and so many have been wrong. Now, with this tale, when you hear the sell sirens you can hang on. If not? I can't help you.