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What Is Apple Once the Romance Cools?

Stocks in this article: AAPL QQQ MSFT

NEW YORK (TheStreet) -- Are Apple's (AAPL - Get Report) best days behind it? In terms of their gross sales, revenues, and overall financial strength? Probably not. How about in terms of stock performance? Almost certainly.

This is not a unique view, but I do think it can help illustrate a point about the role psychology plays in investing.

Apple was everyone's favorite stock back in 2006-a year in which the stock gained 82%. Incidentally, it was also everyone's favorite stock in 2007 (+136%), 2008 (-56%), 2009 (+132%), 2010 (+51%), 2011 (+23%), and 2012 (+31%).

It should be noted that in 2012 alone AAPL was up 70% by early September before succumbing to the market's gravitational force, also known as mean reversion. By "everyone" I mean retail investors, mutual funds, and even hedge funds. Just two years ago the computer-turned-software-turned-music-turned-phone company made up 20% of the NASDAQ index (QQQ). It has since been reduced to about 12.5% but is still the index's largest holding today-by more than 4%-next to Microsoft (MSFT - Get Report).

To be fair, I don't think Apple gets enough credit for its role in the U.S. stock market rebound since 2009. One thing we knew during the tenuous early parts of the recovery, regardless of which Fortune 100 company was laying off thousands of employees or which European country was announcing that it was "out sick," Apple's stock would be up. Of course this is not literally true, but it's also not too far off. I believe Apple played an extraordinary role in maintaining investors' faith -- to the extent it was possible at that time -- in our capital markets' ability to create wealth during one of the steepest bear markets ever seen.

Today I still get questions, almost daily, about where Apple is trading and where I think it's going. For the most part my response is something like, "Why do you ask?"

Unless you worked for the company it may be time to let go of the fantasy that owning the stock is going to make your dreams come true.

Let's not forget a hugely important piece of information that nobody likes talking about: Steve Jobs passed away over two years ago. Many diehard Apple fans simply don't want to admit the importance and relevance Jobs' vision and existence played in the company's (and stock's) success. These folks point to the fact that after Jobs passed on Oct. 5, 2011, Apple stock soared to all-time highs over $700 per share. See! It wasn't just the Jobs Effect!

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