And I must stress ... if doom occurs, it is not impending. By no means. However, I have seen the process I describe take place. I have fallen victim to it in the past. With each victory, you become all the more certain that there's no way -- God willing -- you can be defeated. A little bit of loyalty, and Tim Cook and China will take care of the rest.
Ironically, seeing profits slowly start to get smaller only strengthens your resolve. You hold. You listen to the pumps to buy on the dips. And it keeps working. You're rich. But for every disciplined investor who manages his or her position properly, there's at least one devotee who stays all-in and keeps digging himself or herself a deeper hole. Before you know it, your otherwise rational mind fooled you into staying in a position from 700 down to 250 because you just knew it had to make it to 1,000. It was destiny.
What makes the whole situation even more tragic is that it's relatively easy to manage a position like AAPL, particularly once you have built up some size. Apple is a long-term investor's dream not simply because it seems to always end up moving higher, but because it's an income-generating powerhouse.
As I have noted in recent days, you can literally live off covered-call income even if you "only" have a couple hundred shares of AAPL. Even if you do not own the stock, there's income to be made. If you have the cash to support the trade and would not mind getting long AAPL on a pullback, selling puts is almost a no-brainer.Consider the premium you could collect on several May strikes, as of midday Thursday: AAPL May $590 put, $11.15 AAPL May $585 put, $9.55 AAPL May $580 put, $8.05 Heck, even down at $565, you're taking in $4.75. That's not bad at all for one month's worth of your time, particularly if you have a hefty bankroll. Whatever you do, do not allow your emotions to take over. That might seem like an obvious and errant thing to say given what we're living through with AAPL, but, every single day, investors squander relative fortunes thanks to behaviors that effectively overtake them.
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