11 January 2006


I used to ask why people bet on things like baseball and football, sports that were in and of themselves good and true and beautiful and all that, and the inevitable response was that it increased your interest level and made it a little more fun.

I didn't quite get it, until now.

This is Apple Computer's stock price for the past five days. The big bounce (for those of you living under a rock) came after they introduced the new product line. Why this caused such a dramatic reaction is beyond me, since it was the worst-kept secret since "Who killed JFK?"* that they would be introducing Intel-based PowerBooks MacPro laptops. I guess the new iMacs came a little sooner than expected, but enough to add 10% to the already-overvalued market cap of Apple?


But anyway. Now I get it. I used to follow Apple like I follow the Cubs, with a passion bordering on obsession and a vague sense of inevitable doom. But a year and a half or so ago, on a whim, I bought $5,000 of AAPL stock. That stock is now worth upwards of $20,000 (which accounts for 2/3 of my total portfolio's appreciation). I care on a totally different level now. I'm still a fan, but a fan with money on the table. So like the football fan who cheers when their team kicks a meaningless field goal to cover the spread, I now cheer when their quarterly returns not only show a profit, but beat the analysis' expectations by $0.03 per share.

And even better, I have had the good fortune to join the game right when the iPod lit the booster that propelled AAPL into orbit. So I am enjoying the ride, expect that I will someday lose all my gains, and plan to ride AAPL all the way back down to the ground. Lest you all think I am an idiot, I mostly invest with my head and not my heart -- I bought AAPL, Pixar, and Boeing because I like (and know a lot about) the companies. I bought Starbucks with a similar attitude, but would ditch it in an instant if it tanked. The other holdings I have are pretty mundane -- 3M, Exxon, Genentech, etc., and I have defined stop-loss sell points on them.

But they're like betting on the New England Patriots. I expect them to win and am pleased when they do, but take no real pleasure in it. So I guess the conclusion I can make is that betting on "your team" makes it a lot more fun when they win, and (for me, anyway) betting on other teams has minimal allure.


* Dick Cheney

1 comment:

Note: Only a member of this blog may post a comment.