Unless, that is, it creates new markets, or finds a way to deliver a value price with a premium margin.

Apple rumors involve three new products:
  1. An Apple TV, as CNET writes, a big screen with its iOS operating system acting as a set-top box compatible with other Apple devices and the iTunes store. Thus, you could program the evening's viewing from your iPhone at work and buy shows a la carte instead of taking cable. It would also make a sweet game machine. Figure most of us pay $3-4/day for cable and maybe we can all cut that cord.
  2. An Apple watch, which Bloomberg is reporting on. Apple has 79 patent applications using the word "wrist," a 10% share of the global industry would be a cool $6 billion, and margins on watches run as high as 60%.
  3. A cheaper iPhone, which, according to the International Business Times, would be aimed at China and Brazil, with features like fingerprint sensors for security and a push at the prepaid market.

Any one of these products could, with a little hype, move the stock. Apple product rumors are a mini-industry all their own. What if all these rumors should come true? Speculation arising from a press conference like that could easily make this a $500 stock within a week.

So you have a rock-solid stock with speculative potential, available at a PE ratio similar to that of Intel. I call that a solid investment -- unless you already have a full plate of Apple shares like I do, and got in at around $560 right before the rest of the market began to boom.

At the time of publication the author had a position in AAPL.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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