The Democratic Convention is underway, the Republican Convention is over and the Europeans are back from the beach and making noise again. The next big event a ruling by Germany’s supreme court on whether the country can participate in various bailout programs. After that, the Fed meeting on Sept. 19. Notice I have not mentioned corporate earnings or economic data. It is all about the politicians.
Ignore that crowd – the political crowd – and focus on what you need. If you are like the rest of us, you want appreciation in your stocks and income from the same. And get it from the real world – forget charts, look for a great company with great products. The best? Apple (AAPL). And the stock, in my opinion, is set to take off again.
A week or so ago Apple popped $20 when a court in California ruled in its favor in a patent dispute with Samsung. Then it stopped again. This week Nokia (NOK) and Microsoft (MSFT) and Google (GOOG) and others are making announcements that supposedly will make them tougher competitors for Apple. The stock is stuck. The crowd on Wall Street, looking for something to say, is saying this competition has to hurt Apple.
The Wall Street guys continue to look for – to eagerly seek out – weakness in Apple. They cite that Android phones have more market share than the iPhone. That Google and Microsoft are entering the tablet market. That Nokia and Microsoft are launching a new family of phones.
Yawn. Double yawn. Let’s make that a triple yawn.
Apple’s market share
Google does not make a nickel on Android phones. Samsung has just taken a big hit in its product development efforts and it is the largest purveyor of Android phones. Microsoft and its operating system for tablets and phones are considered poor cousins to Windows and a third-rate competitor. Recent surveys by ChangeWave Research (part of the 451 Group) show Apple is as strong in tablets as ever — and there is a strong rumor that a game-changing iPad mini may be on the way in October. ChangeWave surveys also show continuing strength in sales of computers and the corporate market share for Apple for planned new purchases at 8%.
And that is the key to Apple, next week, next year, maybe the entire decade. Market share — and how little it has. Apple may be a strong player in the smart phone market but has less than 3% of the worldwide cell-phone market. It may be dominant in tablets but combine tablets, ultrabooks, netbooks and low-end laptops and it has less than 10% share. And it has less than 1% share in computers. Apple has a long way to go before it even nears market saturation. Oh, yeah, it may create a new price point in tablets with an iPad mini in October and it is expected to add China Mobile as a distributor in the coming months. China Mobile? Never heard of it? More than 630 million subscribers and counting. No, I did not add a digit.
Generate income from Apple
What to do? I own Apple – I have more of my assets in Apple share than anything else, including my house. That is the growth part of my portfolio. I sell calls – sometimes every week – and that is the income part of my portfolio. When I do it with discipline and regularity, selling calls can yield more than 18% a year. No kidding – and since my price target for Apple is $1200 a share, and the stock is around $675, I will be doing this for a long time.
You should consider the same.