Let me begin by telling you a story. I am one of the poor souls who sold his shares in Apple (NASDAQ:AAPL) back in the summer of 2011 for $383 and change. In truth, I kicked myself as I watched the stock blow through $400, then take out $500. Surely I thought that was the top. Oh, how wrong I was.
Quickly we reached $600 and finally topped $700. I figured, well, I had a nice gain, but I it hurts to know that I missed another 50 percent to 75 percent. When the major selloff from its highs of over $700 began I started to get intrigued about the possibility of getting back in. I chose to get back in at $600 on the button, with the idea that I would pyramid down into the shares if it further declined, and if not I would be happy with capital gains as well as a cushy little dividend. To my surprise, it didn’t take long to breach $550 when I added again, and once more at $475. I thought there was no way it could go lower, and I wasn’t prepared to add another layer to my pyramid buys. After all, shares are pretty expensive on an absolute dollar basis. Shocked I watched it fall to the $400 level. I decided I would add one more layer if it breached $390. When it did, I had a full position. What is the worst part of all of this? Well, I completed the new position at levels that were just a few bucks, or 2 percent above where I first bailed out.
Why do I share this story? Because history repeats itself. I sold my entire position when Apple made its huge run after announcing its 7 for 1 stock split. I sold at $640 and was very happy with my gains. I was sure I would get a chance to buying in lower. Nope…the stock has continued to move higher, currently trading at $95.30 (or $667.10 on a pre-split basis). Sigh, it looks like another mistake. Why? Because I was playing the trading game. I wasn’t holding a solid investment. I still believe that Apple is one of the great growth stocks of our time, and I do not think the run is over.