How many articles and blog posts about Apple (Nasdaq:AAPL). The conversations in the investor marketplace come down to two solitudes which have yet to resolve.
There are those who focus on Apple as a growth company. constant product innovations. Constant increases in revenues and profits. It’s all so damn sexy. New iPad. New iPhone. Apple is the one to beat. Samsung has a compelling offering and may take share so load up on the market place news.
Then there are articles on the dividend. The tone is how boring that Apple pays a dividend and therefore supports price because of yield. Boo Hoo how sad but that is what a dividend is supposed to do.
Apple investors are in a transitional frame of mind. Is this a sexy growth company or do the dividend investors start to pile in. The dividend investor buys because they believe in the financial metrics. The growth investor buys because they believe in the next generation of product offerings. Two very different orientations.
So what of it?
The growth investors have the greatest psychological risks. They are anchored in their perspective of Apple being exciting and growing in leaps and bounds. They will seek and receive confirmation with product announcements. When the news cycle lessens in intensity they will become discouraged and find less reason to hold or increase positions. Sell buttons get punched.
They forget what a dividend investor is anchored to which is yield. So if Apple is on your watch list as a dividend investor watch the frenzy cycle. There will be buying opportunities disguised a growth investor sell offs.
This battle will go back and forth several times before the growth investors lose their anchor when they have lost enough of their money.
George Gutowski writes from a caveat emptor perspective.