Hello world, and good evening everyone. I have created this blog in order to share my investment advice with everyone. I hope you find it interesting. I also have a personal blog which is located here: http://noahsilverman.wordpress.com/
“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” -Warren Buffet
Without further adieu, here is my first stock tip. AAPL (Apple Incorporated). Yes, this is one of the most given tips probably ever, but the timing is what makes it interesting. If you look at a 6 or 5 month chart, from about September until now, you can see that Apple has declined about 35% or $245. Why so much?
There are multiple reasons, but the largest I believe is one of the two factors that drive people to and from investments. Fear and Greed. When Apple was cruising to $700 a share, people were getting greedy, and overbuying. Investor expectations have become a little too high. What more can you expect from the largest corporation in the world? Once Apple started letting people down just a little, people started to get fearful. In fact in one day, Apple was down about 12% or $50 Billion, about the market capitalization of Ford Motor Company. They have now oversold and the share price is about $450. For the record, I do not believe that Apple should be $700, but neither do I think it should be $450. I say in the 600 range, say $625 or $650 sounds very reasonable. In other words, I would put a definite buy rating on this stock.
A prime example of what I think will happen to Apple happened to Netflix (NFLX). About a year ago, Netflix was trading for $126. After people became fearful in October, it was trading for $55. Carl Icahn, a prominent investor bought a 10% stake in Netflix for about $58, which was about $320 million. Netflix is now at $164 and his 10% stake in the company is now worth a staggering $1 billion, that’s about 300%. Not bad.
My Advice: Don’t follow the market dynamics that are driven by greed and fear.