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(B)(N) AAPL Apple Incorporated

December 15, 2012

Drama. The iPhone™ folks, Apple Incorporated, have disconnected and are now fighting for market share (like everyone else) and the long payout from their increasingly large production facilities (fixed assets) and expensive global market scope (Reuters, December 14, 2012, Wal-Mart selling Apple’s iPhone 5 at big discount). The protective puts at $600 that we bought for $35 a share in October are now worth $90 (please see our recent Post, (B)(N) AAPL Apple Incorporated, October 2012) and the company’s stock has moved decidedly into “volatility zone” (N) pricing despite nearly $10 billion of share repurchases this year and a $10.60 per share dividend for a total payout of about $10 billion per year and a current yield of 2%.

The “Daily News” on Apple Incorporated continues to be voluminous and breathless one way or the other. But it won’t be in our Post again or the Perpetual Bond™ until the performance that investors “like” is actually demonstrated. We want our capital to be provably safe – 100% capital safety – and we want to obtain a hopeful return above the rate of inflation. How could that be too much to ask?

Exhibit 1: (B)(N) AAPL Apple Incorporated – Risk Price

(B)(N) AAPL Apple Incorporated

Apple Incorporated  designs, manufactures, and markets personal computers, mobile communication devices, and portable digital music and video players and sells a variety of related software, services, peripherals, and networking solutions.

(Please Click on the Chart to make it larger if required.)

The stock is in our portfolio the Perpetual Bond™ if and only if the ambient stock price is plausibly above the price of risk or Risk Price (SF) (Black Line and a step-function). Based on that rule (which, of course, is not arbitrary – please see our Post, The Price of Risk, August 2012) we bought or held the stock between $100 and $300 in 2009 and 2010 but have avoided it thereafter or been very careful with our purchases (please see our Post, The Wall Street Put, August 2012). The Risk Price (SF) has been rising steadily since 2009 but faster than the stock price and has increased from $600 to the current $820 (up from $700 six months ago). Undoubtedly, some investors won the lottery and might be thinking that they can do it again and some investors are buying the stock now at $500 else the price could be a lot less. Oh well.

Postscript

We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

The Perpetual Bond™
“Alpha-smart with 100% Capital Safety and 100% Liquidity”
Guaranteed
With No Fees and No Loads on Capital

For more information on RiskWerk, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Related data may be obtained from us for free in a machine readable format by request to RiskWerk@gmail.com.

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.

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