Here are five words guaranteed to lose money. “I am now short AAPL.” Or are they?
Last April, I shorted SLV in the face of the great precious metal mania. Everyone wanted silver, Cramer was telling me to buy silver, my precious metals refining neighbors were telling me to buy silver, silver was absolutely going to blast through $50/oz., the banner ads on my browser were telling me to buy silver, Zerohedge was telling me to buy silver, and everyone who owned silver was borderline insufferable with joy. Silver was the world’s greatest hedge to every global problem. So I sold the hell out of silver. One week later SLV lost 25%.
Now, 11 months later, the world has found another AAPL of its eye. Pun 100% intended. Their iPhone’s cure cancer. Their iPad’s help the blind see (retinal display…seriously?). Their iPod’s have cultured the ignorant. Everyone wants AAPL.
AAPL is easily a $1,000 stock, Cramer is telling me to buy AAPL, every analyst has a buy recommendation on the stock, and according to all valuation metrics (except common sense) it is still cheap. Buy AAPL! So, today, I sold the hell out of AAPL. History repeats and I expect it to repeat two days from now.