Apple to hit $600? Um, no. - Macenstein

Apple to hit $600? Um, no.


As an Apple stockholder with far too much of my portfolio invested in the Cupertino company, I was overjoyed to see the headlines streaming across the Mac-o-sphere this week proclaiming that “Analysts say Apple shares could reach $600 in 18 months!“.

WOW. Suddenly my 90% AAPL stock portfolio seemed far too diverse! “Time to buy more Apple while I can!” was all I could think as I fired up my E-Trade account.

Reality Check

Luckily for me, on my way to my future retirement, I paused to instant message a bit with one of my many “internet friends” who I’ve met over the course of running Macenstein. This one in particular is a stock-trading billionaire genius by the name of Dersky. When I showed him those Apple headlines, he showed me the site of the $600 analyst, and I suddenly came back down to reality.

Now, I know we aren’t supposed to judge a book by its cover, but when there’s money involved, all etiquette goes right out the window. Based solely on their internet presence, I’d sooner trade my cow for magic beans than invest based on the advice of Daedalus Capital. Now, I’m sure (well, reasonably sure) Stephen Coleman of Daedalus Capital has all the necessary qualifications to make such a headline-grabbing claim that Apple’s stock (which has been on a roll of late) will tripple in 18 months, but my god, their site is a far cry from Merrill Lynch.

What’s wrong?

Well, speaking of God, he is right there on their front page. Which is also their ONLY page. On it, Daedalus Capital outlines their “12 Cardinal Principals of Daedalus Capital, L.L.C” in a 10 Commandments-esque fashion (kind of odd that God could whittle down the rules of life in general down to 10, but investing apparently takes its own set of 12).

I encourage you to read through them on your own, but as an investor looking for accurate, up-to-date advice on how to manage my money, my personal favorites are:

#1 “Thank God Daily for our many blessings”
#4 “Trust our Gut”
#12 “Ask ‘How much can we lose?’ before we invest”
(I realize this is meant to convey cautiousness, but read the wrong way, it implies they are out to lose money) 🙂

Oh, they also have a cool web counter at the bottom of their page (currently at 2160), something you aren’t likely to see outside of a free GeoCities site.

Again, this is solely me just looking at their website (and comparing it to those of analysts we have actually heard of) and reacting, but I do wonder how long and hard Bloomberg had to look to find someone willing to make that headline-grabbing statement.

To their credit, though, Daedalus seems to be sticking to rule #4, as it owns $7 million in Apple stock, which is roughly $7 million more than I own. Hmmm… Maybe I need to make me my own set of rules…

9 Responses to “Apple to hit $600? Um, no.”
  1. Kd says:

    Hilarious! I don’t think God would approve of the inherently immoral stock exchange.

  2. gws says:

    probably correct, Apple is too big to grow 3x in real value in that short a time. Market cap isn’t real value. Apple doesn’t pay dividends so that makes it a speculative investment only

  3. Tom B says:

    “I don’t think God would approve of the inherently immoral stock exchange.”

    1) the stock market is amoral; nor immoral.

    2) God is a boogie man invented to scare children.

    3) $600 in that sapce of time? Probably not. I could believe 300 in 18 months.

  4. George G says:

    I too believe that target price to be a bit of a pipe dream… BUT, his last shot in the dark did happen to hit its target. Many found his year-ago prediction of AAPL at $200 by the end of 2007 to be laughable at best…

    Sure enough…

    I for one certainly hope he manages to win another round of pin the tale on the donkey with this blindfold stab. Perhaps 18 months is too short a time-frame — especially to build the sort of infrastructure required to support his underlying rationale for that valuation — but hey, they are already doing this sort of thing in Asia and in some parts of Europe so perhaps pipe dream can become reality after all….

  5. Anthony says:

    I think he is right about $600 within 18 months because from 2006 to 2007 without iPhone, rental movies on iTunes and iPod Touch! Also it will be double sell Macs, iPods, OS and possible refresh Apple TV and UMPC or Newton!!

  6. Constable Odo says:

    I’ll settle for $400 in 18 months. You gotta be in it to win it. I still think if Apple could corner some of the 700MHz spectrum and be able to use the iPod touch and iPhone on it, they could sell as many as they could manufacture.

  7. Feldwebel Wolfenstool says:

    It will hit $600 when the US Greenback crashes to ten cents…

  8. Jim Z says:

    Oh, Tom B!

    So sorry to hear about your Catholic upbringing.

  9. Infinite loop says:

    never say never.

    When I bought 1000 shares of aapl in 1999 for $13, I never expected it to be trading at $800 today (adjusted for 2 splits).

    See how that works?

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