Apple (AAPL)

Apple (AAPL), in case you live in a cave, under a rock, or in a hot air balloon, designs and sells electronic products and associated services to consumers and businesses.  Apples flagship product is the iPhone, jointly followed by the iPad, iMac, iThis, and iThat.

To put my rationale for investing in AAPL simply, AAPL solves problems.  Not only that, their solutions are elegant, simple, and highly effective.  Apple provided a solution to my need for mobile music, then to my desire to carry one item that functions as a phone and mobile music player, then to my desire to not carry a clunky laptop around (not really I don't own an iPad), and they have many more solutions in the pipeline.  Recently, AAPL created a method for me to pay with my phone rather than grabbing my wallet out of my back pocket (i.e., Apple Pay).  Soon, there will be a solution to me having to pull my phone out to accomplish this task.

Like I said, solutions.  AAPL seeks to learn how I perform daily tasks and in what ways those tasks can be performed in a more efficient and sensical way.  The truly remarkable aspect of AAPL's designs is the ease of use.  How many 2-year-olds do you know that can operate an iPad?  When my then 85ish grandmother got her first iPad, she learned how to use it in a matter of days (if not hours) and now has very little use for her desktop or laptop.  Not to mention that the iPad most likely led to her purchase of an iPhone as well.

The knock on AAPL is that the company is so large and so successful that it seems impossible to  sustain a meaningful sales/earnings growth rate.  This issue has been deemed "the law of large numbers."  I agree that this issue should be on investors' minds, but I by no means feel that the daily tasks I perform cannot be improved upon.  I don't think I should ever have to pull keys out of my pocket to open my front door or start my car.  I should have a watch to serve that function.  Speaking of the watch, if the new Apple watch gets even one approved health monitoring function, such as continuous monitoring of blood sugar for diabetes patients, move over iPhone-Apple has a new flagship product.

Oh, and by the way, should the law of large numbers be the correct thesis, AAPL has a huge amount of cash on its balance sheet.  Transitioning from a growth company to a steady cash cow seems like the worst case scenario, and that doesn't seem too horrible to me.

What to watch for: New products.  AAPL's news is emotional.  The company is polarizing.  But only one issue matters, AAPL's solutions.  Everything else is a distraction.

Common Cents Take: AAPL has the potential to drastically change our lives with its solutions.  It's a game changer.  And then again, maybe its not.  In that case, I'll take a steady cash flow from the company with one of the best balance sheets of any publicly traded company.  Win-win.