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Why I'm Seriously Thinking of Buying Apple

Friday - 1/25/2013, 5:03pm  ET

LONDON -- I'm not an Apple fanboy. I don't like the "closed world" of Apple's technology, and I've never bought one of its products. 

I did have an iPod Shuffle, when it first came out, but that was given to me. It was certainly impressively small and light. (So light, in fact, that I didn't notice it in a pocket, and it went through a complete wash cycle. Small and light it may have been, but waterproof it was not.)

But not liking a company's products is not necessarily a good reason not to buy the shares. I'm not wild about Coke, but I'd be very happy (and rather wealthier) if I'd bought Coca-Cola shares when Warren Buffett did.

I didn't buy Apple shares at the end of the '90s because I didn't think much about the company at all. At worst it seemed washed up -- at best it made niche products for trendy people and graphic designers.

When the iPod came out, I thought it'd also be a niche product for trendy people, and that the mass-market for such things would be seized by more mainstream electronics companies, such as Sony or Philips.

Ditto the iPhone. Surely a big player such as Nokia would easily dominate the smartphone market?

I didn't think that a company such as Apple -- a company that had come close to ceasing to exist, really, toward the end of the '90s -- could possibly become the world-bestriding colossus that it has. 

As the share began its upward trend under Steve Jobs, it always seemed that it just couldn't continue, and so I resisted buying. As Apple's price climbed and climbed, my resistance to buying grew with it, because surely it couldn't go any higher. But it did, and I should be kicking myself. (But that wouldn't change anything and might hurt.)

And then Apple fell.

Plummeted might not be too strong a term. Closing at $450.50 last night, Apple is now a whopping 36% down from its peak of September 2012.

I reckon it's fallen too far for a company of this quality and growth record, and too far for a company with nearly $140 billion -- almost a third of its market cap -- in the bank. Irrational negativity about the company has taken hold and the sell-off has been too big. At its current price, Apple is on forward P/E of under 9. That's just wrong.

And that's why I'm seriously thinking of buying Apple.

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This article was originally published as Why I'm Seriously Thinking of Buying Appleon Fool.com

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