Don’t go with Buffett

I know it is a bold call but I don’t think you should go with Buffett on this stock at least for now. I’m talking about Apple.

 

I like Apple for years and I have advocated it as a long term value stock many times here (see an example here). Have I changed my mind? Certainly not!! Apple is still one of few best value stocks out there that may bring you fortunate over time. We just learnt that Buffett has put big money into Apple, the 2^nd largest holding for Buffett’s Berkshire Hathaway as of now. This is a big long-term confidence from Buffett as when he puts money into something, his holding period is “forever” as he has said. I certainly agree with him but it does not mean it is a good time to buy Apple for now if you are thinking to follow Buffett’s footsteps.

 

After more than a year in virtually a very depressing status for Apple with more and more people not believing it anymore, suddenly the faith for Apple has come back in the past 2-3 months, so much so as if everyone loves Apple now! That has pushed Apple to an euphoria status as of now and the bullish sentiment for Apple has rarely been so much. Buffett’s buying is certainly turning more people into Apple’s lovers. If history is any guidance, when Apple has such a high heightened sentiment, a double digit decline may likely follow in the months ahead. Apple is trading hands around $140 but it won’t surprise me to see Apple come down towards $120ish in the next few months. I’d not chase Apple up at this level regardless how much I love it. I’m happy with what I have for now and will only add more if it loses some lovers if I’m right!