Apple: Good for Your Health, in Moderation

Apple has nearly tripled in two years.

The Merc recites happy tales of small investors who have profited by many thousands of dollars on Apple stock. The happiest? Perhaps it's Anton Marinovich:

When Anton Marinovich turned 18, his grandmother gave him $1,000 with strict instructions to invest in the stock market. He chose Apple. Seventeen years later, his investment is worth more than $240,000 and will bring him over $1,000 a quarter through the company's new dividend plan.

Many of these shareholders, as did your humble observer, acquired their stock not because of their financial acumen but as a show of support for the company's products. For those who suffered through the pre-iPod period when Apple was in a death spiral toward dissolution, its current status as the largest public company is nothing short of a miracle.

The escalating value of the shares has resulted in a good problem to have [bold added]:

But the problem, pros say, is that clients' growing positions in Apple means less-diversified portfolios. One of the enduring lessons from the bursting of both the tech and housing bubbles last decade is the danger of not spreading your bets. For that reason, Kenny Landgraf, head of Kenjol Capital Management, recommends clients trim positions in Apple to no more than 10% of their portfolios. When everyone is "drinking the Kool-Aid" and watching their portfolios rise, Mr. Landgraf says, "it's hard for clients to decide how much is too much."

Reducing one's holding is sound advice. During the Internet bubble I fell in love with some of my winners and held on to them until they became losers.

We will try to avoid repeating that mistake: we will harvest some Apple gains and partially assuage our guilt by buying the new iPhone and iTV when they are announced later this year. Here's to you, Steve.