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Frequent Contributor

Re: Seeking a replacement for APPLE for generating capitall gains


@KathieL wrote:

I'm surprised no one recommended TSLA.  

I'm looking at all of your suggestions, but haven''t yet made a decision.  I will not but any oil company, United Health, or Facebook.

Intruder, you and I are in the same boat with Apple.  I'm not going to sell all of it, but enough to take me down to 5% of my portfolio.  


One interesting stat that is being circulating about AAPL being over valued is that it’s PE increased from 22 at the beginning of 2020 to 38 today. But PE for AMZN is 127. Market cap of 5 largest SP 500 co- AAPL, AMZN, GooG, FB and MSFT is about 23% of all SP500 companies. They are also responsible for 23% of all the free cash flow of all SP 500 companies.

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Frequent Contributor

Re: Seeking a replacement for APPLE for generating capitall gains

"I would not invest in any life insurance co because low interest rates are making it difficult for LI companies to generate enough income to pay LI proceeds.LI companies will have to reduce dividends to Pay death benefits."

Our in-law is an insurance agent. He must be having a hard time now. Two months back, he asked me about my portfolio. I have been telling the same thing over several years - VTI, VTI, and VTI. In fact, I printed the screen from the Quicken as a percentage of each security, cleaned up the actual amounts and sent it through an e-mail.

Oh, by the way. He was not successful to make me buy an annuity although he tried for some time more than a decade ago. I convinced him how much money I was making and how much money I can make in the future with that amount. He accepted that the annuity was a bad thing to my financial health.

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Explorer ○

Re: Seeking a replacement for APPLE for generating capitall gains

ORI does a lot more than life insurance. 
Their title insurance business is rolling right now due to housing and refinancing. They touch nearly every type of insurance. Have raised their dividends every year for over 30 years.

Not flashy but a very conservative 5% yield and growing.

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Explorer ○○○

Re: Seeking a replacement for APPLE for generating capitall gains

Think a very small percentage of ORI's business is life insurance.... In 2018 and 2019, their investments did so well, they declared a special $1.00 divy per share.  That's called putting your shareholders' interest first.   

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Frequent Contributor

Re: Seeking a replacement for APPLE for generating capitall gains


@Kudzu wrote:

Think a very small percentage of ORI's business is life insurance.... In 2018 and 2019, their investments did so well, they declared a special $1.00 divy per share.  That's called putting your shareholders' interest first.   


Whatever floats your boat. I have no interest in investing in insurance companies in a low fixed income Yield environment.

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Frequent Contributor

Re: Seeking a replacement for APPLE for generating capitall gains

I've been selling small slices of AAPL and replacing with MSFT. Is it a better deal? I have no idea but I hold a lot less MSFT than APPL. I also hold TRBCX in IRA.

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Explorer ○

Re: Seeking a replacement for APPLE for generating capitall gains

I keep waiting for the “right” time to buy MSFT.  I don’t think it is a bad idea to trade some AAPL for it.  

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Frequent Contributor

Re: Seeking a replacement for APPLE for generating capitall gains

           


@Slooow 

                 In addition to what you mentioned,  MSFT is still about 5% undervalued according to Morningstar, AAPL is about 75% overvalued. This looks like irrational exuberance for a middle aged tech stock to me. 
 
                   Check MSFT’s graph and compare it to AAPL’s. AAPL’s looks like a roller coaster the last 10 years. It could be the same again. 

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Frequent Contributor

Re: Seeking a replacement for APPLE for generating capitall gains


@KathieL
       Ok don’t laugh. On the next drop under $125 check TSCO. Excellent management, expanding niche retailer of high quality rural and gentleman farming goods. They’re out in the boonies where Sam Walton started. Take a ride in the country and check it out, no competition.
       
        TSLA is overvalued twice as much as AAPL. You know who and MSFT are selling at small discounts.

 

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Explorer ○

Re: Seeking a replacement for APPLE for generating capitall gains

Steelpony - I am watching MSFT and think I might trade a little AAPL.  But, in a market where CLX’s p/e is 30+, I am okay with AAPL’s value, although is sure is climbing!

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Frequent Contributor

Re: Seeking a replacement for APPLE for generating capitall gains


@Slooow

         As a retiree, the short term to me, I rely on the revert to mean guideline. I’ll check next week after the hoopla subsides and the financials gypsies with their need to report something move on. 
          I only buy and hold funds at this point. I’m in spending mode. The FAANG’s, MSFT, CRM, MA, V and UNH have been good to us so far, who knew. The downside is you can’t spend it. Ha. Ha

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Participant ○○

Re: Seeking a replacement for APPLE for generating capitall gains

One that has been good to me over time is Texas Instruments (TXN).  If Honewell (HON) comes back to earth might add some their. Both have (IMO) good growth and fair dividends. I have both on my growth side of companies.

Copie

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Frequent Contributor

Re: Seeking a replacement for APPLE for generating capitall gains

KathieL, 

I’m in a similar place as you, our AAPL position has really shot up, now slightly over 6% of the portfolio. Since our portfolio is pretty large, that’s over half a million in one stock. Our cost basis is really low, bought at $11/ share, so I’m not itching to sell. I’m going to hold it for now, it’s fully valued to moderately over-valued.

Some other individual stocks to consider- “old Tech”- CSCO, INTC. Also some pharmacy companies- PFE, MRK, ABBV, GILD. Here’s a few more I may add to- CVS, VZ, maybe T (if it comes down some more). These are all on my “watch list” if they correct down some. I’m sitting on over 10% cash now, and bonds do NOT look appealing to me here.

Win
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Participant ○○

Re: Seeking a replacement for APPLE for generating capitall gains

Thanks to all of you for your thoughts.  Clearly, I'm not alone in having "too much" money in Apple.  I am considering MSFT.  AMGN would be on my list, but I have so much money in pharmas, I don't know that it makes sense to add another.  I also have plenty of money in telecoms (T, VZ and BCE) and in utilities (DUK, SO, Brookfield Renewable).  My most recent "old tech" buy, NTAP, is doing well after crushing earnings estimates.

I've also looked at HON and will look at TXN and at TSCO.

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Frequent Contributor

Re: Seeking a replacement for APPLE for generating capitall gains

KathieL,

I would have listed MSFT, but I made the assumption you already owned it. I already have a big position in MSFT (1750 shares), so I’m not going to add to it. Any stock I own that rises to over 2-3% of my portfolio, becomes a “hold”, in other words I do NOT add (or reinvest dividends).

MSFT is a GREAT long term hold, but seems sort of Pricey” here (like pretty much all “Tech” companies). I’m avoiding “adding” to the “new Tech” companies that I own- AAPL, GOOG/ GOOGL, and MSFT, as they all are “pretty popular” right now. So I’m just building cash, hoping for a correction.

Win
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Participant ○○

Re: Seeking a replacement for APPLE for generating capitall gains

win, I have owned MSFT in the past, but don't own it now.  It does seem pricey to me, but then, lots of stocks seem overpriced to me now.  Your limits in holding a single stock are stricter than mine.  I don't want any one stock to be more than 5% of my portfolio.

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Frequent Contributor

Re: Seeking a replacement for APPLE for generating capitall gains


@KathieL wrote:

win, I have owned MSFT in the past, but don't own it now.  It does seem pricey to me, but then, lots of stocks seem overpriced to me now.  Your limits in holding a single stock are stricter than mine.  I don't want any one stock to be more than 5% of my portfolio.


I have no problem owning MSFT because of its dominating presence in the cloud. 

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Frequent Contributor

Re: Seeking a replacement for APPLE for generating capitall gains

I agree, nearly all “high quality” stocks seem over-priced to me. I have a policy of holding an individual stock until it reaches about 6-7% of the total portfolio (used to be 10%), and my AAPL holding is RIGHT there, at 6.5%. I’ve not sold any (yet), but if it continues to rise, I will trim it down. I also do not “add” to a single stock position if it gets over ~3% of the portfolio. Our MSFT position is at ~4.96%, so not adding there.

The rest of our individual stocks are between 0.5%- 3% positions, so less “single stock risk”. One of the reasons I have NOT sold AAPL, MSFT, as well as any of our other “higher percentage” positions is due to tax issues- HUGE unrealized capital gains. My AAPL has a cost basis of $11, MSFT has a basis of $9.26, AMGN basis of $39, PYPL basis is $7/share, XOM has basis of $2/ share, JNJ basis is $10/ share, and BRK.B has a basis of $2/ share. As you can see, many of these were bought decades ago, and we have tax “handcuffs” with them.

If the Dems eliminate the step up in basis, my heirs are screwed!

Win
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Participant ○○

Re: Seeking a replacement for APPLE for generating capitall gains

Win, your post makes me grateful that most of the stocks I own are in IRAs.  So I can buy and sell with impunity; I just pay taxes when I withdraw from the account.  I do wish I would have purchased the Apple stock in my Roth!  

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Re: Seeking a replacement for APPLE for generating capitall gains


@KathieL wrote:

Win, your post makes me grateful that most of the stocks I own are in IRAs.  So I can buy and sell with impunity; I just pay taxes when I withdraw from the account.  I do wish I would have purchased the Apple stock in my Roth!  


That would be a great idea. Isn't? That is why I converted all my 403s, 401s, IRAs, TIAA, etc. into ROTH and moved all to Vanguard for its low cost after my retirement. Now, I do not worry about withdrawing because I do not pay any taxes. All the growth is not taxed.

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