Should Have Quit While He Was Ahead

John C. Dvorak:

I’m often asked at what point should someone short high-flying Apple shares? My response is simple: When the company starts closing stores and pulling back from retail, then the tide has turned.

Not a bad metric. I too would consider a retail pull-back to be a dead canary in the Apple coal mine.

I see no reason why Apple cannot have 1,000 stores that would all be successful. Staples Inc., the office-supply chain, has 2,000-plus stores. Apple seems so adept at retail that there is no reason to doubt that it could go out and buy a company like Staples to expand in the sector. Why not?

Yeah, sometimes I go into a store and get confused as to whether I’m in a Staples or Apple Store.

★ Friday, 23 December 2011