Low-volatility sectors like Utilities and Consumer Staples are not cheap, due to recent bouts of investor risk-aversion. Telecom, with its high dividend yields, is not cheap for the same reason.
Consumer Discretionary is not cheap, thanks to companies that should have gone out of business by now, like AMZN and JCP.
I’m an AAPL shareholder, along with everyone else who has a dime in stocks. Because of people like us, Apple was sitting on $117 billion in cash at the end of June, and probably closer to $130 billion by now, given how much its share price has grown.
AAPL cash and investments, March 2007 – June 2012
Now, Apple isn’t stupid. They’re not going to sit on this pile of cash and watch the dollar devalue. They have their own subsidiary investment firm, Braeburn Capital:
CapitalIQ has the following description of the firm: “Braeburn Capital Inc. is the asset management arm of Apple Inc. The firm invests in the public equity markets. Braeburn Capital Inc. was founded in 2006 and is based in Reno, Nevada.” And that’s it – there is no breakdown of which “public equity market” investments Braeburn is invested in.
The great thing is that Braeburn is not an investment advisor, thus it has no reporting obligations. Furthermore, it can act preemptively on Apple’s immense ability to move the market.
So Apple is the biggest unregulated hedge fund in the world. What more, it is accessible to all investors, unlike regulated hedge funds which require that investors meet a $1.5 million net worth requirement.
