There are a lot of bad apples out there…

AAPL - Market Close - 05/12/2008The economy is stagnant, debt is out of control, gas prices are at record highs, and… hey wait, how come Wall Street is doing so well but my portfolio stinks like steamy compost?!

Believe the myth it’s a rocky time to invest? Rubbish!

Sure your mutual funds may not be performing as well, but then again, they rarely keep pace with market growth over the long-term. They’re designed to minimize risk and hopefully present a return on investment, irrespective of whether that return if mediocre. But why bother with details? It’s only the quality of life you’re planning for when you’ll no longer be generating income!

The truth is, there are a lot of bad apples out there. You just need to look at the image to see that. Sure, AT&T is up 52 cents. Starbucks even squeaked out an 18 cent gain on the day. Impressed? You shouldn’t be.

Telecom is an over-saturated highly competitive market. Starbucks is perceived as over saturated and operationally under performing, which is true in my opinion. Google is believed to be somewhat plateaued with meager ad revenue and too many unknowns on the horizon for confident agressive growth investing. Though it’s worth mentioning that Google typically does not disappoint. Forecast for these stocks? Mediocre gains over the long haul, just like your mutual funds.

Say Mike, we know you’re an Apple fanboy, but what makes you so impressed with their stock?

I’ve been kicking myself for not buying Apple stock since early fall 2006. It’s clear to see why. The iPod generation is the device giving way to the Mac revolution in personal computing. It’s the complete package of style and substance.

While analysts are indicating that the iPod market is plateauing, which would normally be a warning sign in a product life cycle, Apple has never failed to innovate and has recently established itself as an expert in capitalizing on golden opportunities.

Example #1: The iPod product line was showing excellent growth when Apple made the switch to Intel launching the MacBook and MacBook Pro notebook line. As the iPod life cycle appears to have reached its peak, the notebook line only continues to see growth. General public, say hello to iPod… and once you’ve spend some time getting acquainted iPod would love to introduce you to two of his friends – MacBook and iMac.

And so it begins.

Example #2: While the iPod product line is reaching it’s maturity, the iPhone and the Touch have emerged in their own league, despite the Touch being lumped into the iPod family. To me, this is the next iteration of the product life cycle at such a time when it would begin a typical slow decline to oblivion.

But because Apple has dutifully paid attention to the purchasing trends, they have managed to keep the fires burning in all of us for the next big item. An iPod is designed to last just a few years. With the iPhone and Touch becoming increasingly successful, Apple fully expects users to adopt these products as replacements.

As long as Apple keeps innovating and making lives easier, few Americans will want to settle for a product that just continues to complicate their digital life. If this is the standard they intend to employ going forward, they’re going to be hard to beat.

Oh, and you can feel free to buy this now even at its current price. The new iPhone will be out sometime in the next 4 to 6 weeks. A major MacBook refresh is expected sometime in the next six months and we’re headed towards summer – college computer buying frenzy.

There may be a lot of bad apples out there… but this one continues to be ripe for the picking.

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