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Cult of Mac was asked by CNBC’s Street Signs to contribute our thoughts on the current market debate of whether it’s wiser to invest in Gold or Apple. Even though we don’t masquerade as financial advisors, the debate in the short-term seems fairly straightforward to us, and here are a few of the major points:
Apple’s stock has been steadily growing the past few years. On Monday Apple posted another record earning quarter with no signs of slowing down. Some investors worry that Apple’s stock is nearing its apex and expect it to level out around $300 per share. Even though Apple has been seen astronomical growth the last few years Apple still has so much room for growth it’s unbelievable.
For the majority of the company’s existence, Apple has rarely lead in market-share. Because Apple has always been selling its products to a smaller niche of customers than most PC manufactures, there are vast amounts of untapped, tech-savvy customers for Apple to convert to their product culture. If you’ve switched from a PC to a Mac you probably share the sentiment that you never want to go back. It’s the Apple ideology that makes the company so strong. Mac sales continue to grow at a rate two times faster than PC’s. Apple doesn’t have to go out and convince people that they need to use computers or iPhones, iPods, or iPads. Society knows that they want those things. Technology has now become so easy to use that it’s finally in the mainstream, whereas just a decade ago people that were using computers were still considered nerdy. Because of Apple’s image as not just a consumer electronic’s company, but also a culture, Apple will continue to increase sales for at least another three to five years as they increase market share in the smartphone, notebook, desktop computing, and tablet markets.
The debate of whether or not people will continue to buy electronics is a moot point. Technology is here to stay. Even if the market plummets, people will scrounge money to buy an iPod or a MacBook.
More than anything, Apple isn’t just a company, it’s a lifestyle. That’s sounds ridiculous to outsiders, but it’s true. You buy a Mac or an iPhone because it’s a great product, but it also makes you feel special. People self identify with the brands they consume, and Apple has what every company out there is trying to get: Brand Devotion. With Steve at the reigns of Apple that’s not likely to change anytime soon. Steve Jobs has become an amazingly talented salesman who also has some really great products.Perhaps Gold is a better long-term investment (ie 10-20 years), but it’s undeniable that Apple will continue to post record-breaking numbers, and thus earn their stockholders more in the next three to five years than that of Gold investors.
