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Apple has been a fantastic compounding performer over the past 20 years.
Any investment 10 years ago would have returned a minimum of 10x your initial investment. That’s nice to think about in hindsight.

Can we get these impressive returns over the next 10 years?

Firstly, the Apple brand is incredible. An Apple phone is a status symbol. It blows me away that I am living in the poorest country in Europe where the average salary is $500 a month, yet most people have Apple iphones.
It is one of the most important purchases someone can make and Apple is the clear winner.

I think how they added airpods at such a high price point and made a fortune is a true testament to how Apple’s brand is more important than anything else.

Latest Earnings

EPS was $0.73 vs. the $0.69 analysts expected.
Revenue exceeded analyst expectations.
Services revenue was higher than the level analysts expected.
Apple reported a quarterly record for services revenue.

Apple posted EPS and revenue that beat analysts' expectations for Q4 2020. Services revenue also surpassed expectations to reach a new quarterly record. EPS fell compared to the same quarter a year ago despite higher revenue.

So we should just pour our money into this company right? Not so fast…

So now Apple has become the biggest company in the world, the law of large numbers will most likely affect their growth rates.
Analysts consensus is around 10-12% growth per year for the next 5 years. Which is still strong, but I think the days of getting 20-30% per annum stock market returns from Apple will be a stretch with only 10-12% growth.

So just don’t expect the past 10 years to be a reflection of the next 10 years.

Guru Investors
Warren Buffett’s Berkshire Hathaway has the largest ownership stake in the company. Which I think is fitting for one of the greatest companies of all time to be owned by the best investor of all time.

Currently, Berkshire Hathaway have over 40% of the portfolio in Apple shares. And the buying started back in 2016 when the adjusted stock price was around $25-$35 a share. Just for reference, the current stock price is over $100.
So that’s a nearly 4x return in 4 years. Not bad at all.

We know how thorough Warren Buffett is when making an investment, so for him to make such a big play into Apple, is a big tick of approval.

BuyBacks
In 2012, Apple started buying back shares. That is 8 years now and that is another reason why shareholder returns have been so impressive.
Share buybacks is something I really like to see.

Now the current share price as of November is over $100 for Apple. So I think it is very over valued, even for such an impressive company.
Every other valuation metric is showing it is overvalued right now as well.

Buffett buying in 2016 was a far better time and far better from a valuation point of view.

Right now is the worst time to buy apple shares for a decade.

Opinion
Apple is a great company. But they have matured. I would love to own them but $30 is where the price starts to be attractive and I can’t see a 70% fall in the stock price. This one is far too overvalued for me.

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