"The Common Misconception of 'Buy Low, Sell High' in Investing: A Difficult Reality for Many Investors, Explained"
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In the world of technology, few companies have managed to maintain their dominance as effectively as Apple. With an impressive installed base of hardware devices, the tech giant has been making waves in the market, and recent financial results suggest that its success story might be far from over.
A chart provided by YCharts shows the substantial rise in Apple's (AAPL) stock price over the last decade, yet it seems to indicate that the stock has room to run. The chart suggests that selling Apple stock after buying it at a lower price over the past decade might have been the wrong decision more often than not.
Apple's return on equity (ROE) has significantly improved over the last decade, according to data from YCharts. This improvement is partly due to the growth of its higher-margin service ecosystem offerings, such as Apple Music, iCloud, and the App Store. The trend of growth in these service offerings appears to have legs, with Apple's commitment to innovation and continuous upgrades ensuring their continued success.
The company's financial results have been consistently strong. In the third fiscal quarter of 2025, Apple reported a record revenue of $94 billion, with significant year-over-year growth in iPhone, Mac, and Services revenue. Growth in key segments like iPhone, Mac, and Services, while Wearables/Home and iPad segments face challenges, shows Apple's resilience in adapting to market conditions.
Apple is also making strategic moves to enhance its long-term profitability and competitiveness. The company has announced a $100 billion expansion plan to invest in U.S. manufacturing capabilities, aiming to reduce tariff risks and strengthen supply chains. Forming partnerships with domestic suppliers can help stabilise the supply chain and reduce geopolitical risks, potentially boosting investor confidence.
Moreover, Apple's potential collaborations in artificial intelligence could open new revenue streams and enhance its existing product lineup, contributing to future growth. Continuous innovation in products like new iPhone models and upgraded Macs, along with a focus on software design improvements, helps maintain market share and attract new customers.
Apple's commitment to sustainability through initiatives like using recycled materials enhances its brand appeal and can attract environmentally conscious investors, potentially supporting long-term growth. The company has shown resilience by offsetting losses in challenging markets like China with growth in other regions, indicating its ability to adapt to diverse market conditions.
The strong growth in services like Apple Music and iCloud highlights a successful strategy of diversifying revenue streams, which can contribute to sustained earnings. This diversification, combined with Apple's resilience, strategic investments, and technological advancements, suggests that the company has the potential for continued earnings growth and further stock price increases.
In conclusion, the strategy of "buy low and sell high" can apply to the valuation and business fundamentals of a company, not just its stock price. For those considering investing in Apple, the company's strong financial results, strategic investments, and commitment to innovation and sustainability make it an attractive prospect for long-term growth.
- Considering Apple's strong financial results, diversification of revenue streams, strategic investments, and commitment to innovation and sustainability, an opportunity for long-term growth in investing through the stock market might be present.
- The potential collaboration of Apple in artificial intelligence could open new revenue streams and enhance its product lineup, making it more intriguing for investors who are following the technology sector.
- The decision to invest in Apple stock may have been worthwhile, as the substantial rise in its stock price over the last decade suggests that the company's finance and investing in US manufacturing capabilities might yield positive returns in the future.
