Why I Celebrate when Apple Inc. (AAPL) Falls Below $400

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When Google (NASDAQ:GOOG) was selling at about $500-$600 a share I took a good look and decided to invest in the company. I had looked with envy as others had ridden it up since the time of its initial public offering (IPO). The founders of the companies are true geniuses and may have replicated something that Apple used to have. That is certainly what many are betting now as the stock price flirts with new highs. Google is certainly beating Apple Inc. (NASDAQ:AAPL) in the hearts and minds of investors, but when the pendulum swings it tends to swing fast. If I don’t stay invested I tend to miss big moves to the upside.

Knowing your strength and weaknesses as an investor can help you decide on a style. I’m willing to take on more risk and volatility for that elusive home run. My method is tax efficient, meaning that I rarely sell and thus avoid capital gains taxes. My trading costs are low, with much less friction in my portfolio. My friend gets security, but has to pay higher taxes. I get volatility, but if I bet correctly my cost basis eventually falls into the single digits for stocks selling in the triple digits.

I don’t know which company will prevail in the next 10-20 years, but I want to remain invested in both Apple and Google going forward. Apple Inc. (NASDAQ:AAPL) is a value play with growth potential and Google has current momentum with the potential to rule the known universe.

Which method do you think is better? Do you have your own philosophy that contrasts with what I wrote above? Please let me know in the comments section below.

The article Why I Celebrate when Apple Falls Below $400 originally appeared on Fool.com and is written by Erick Santos.

Erick Santos, M.D., Ph.D. owns shares of Apple and Google. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Erick is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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