This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Buy, Sell, Hold or Make Sweet Love to Apple?

Stock quotes in this article: AAPL

It safeguards them from a phenomenon I wrote about back in April on TheStreet.

During that time I got some stuff about AAPL right, some stuff wrong, but I was -- as I am now -- near-term bullish on the company, long-term bearish/cautious. Admittedly, today I am not quite as bullish near-term (how could you be?) and not quite as bearish long-term ( where's the competition?). That aside, here's the "warning" of sorts I issued in April:

Important Note: I wrote these words in late April when it seemed all AAPL could do is go up. Longs were throwing 1980s coke parties and snorting stock certificates off of glass coffee tables. But, since that article, AAPL is down roughly 17%.

I have seen the process take place. I have fallen victim to it. 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.

It is what it is. Speaks for itself. And it's timestamped.

All I will add is that in addition to having a written plan when you enter the position, you're crazy if you do not write covered calls against an AAPL position of 100 shares or more. That was the case back in April and that's the case now. Always has been, always will be.

Writing covered calls on AAPL, coupled now with the dividend, is better than taking a second job you never have to show up at, yet it still pays.

And, oh, whatever you do -- don't make sweet love to a stock. Not even AAPL.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,804.71 -238.19 -1.40%
S&P 500 1,946.16 -26.13 -1.32%
NASDAQ 4,422.0850 -71.3050 -1.59%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs