Fade That Fad

In most Hollywood movies nowadays, when the main character begins using a computer, sure enough it’s an Apple. Granted, Apple most likely paid for this advertising, but it’s meaning is clear nonetheless. Apple is the new, hip, upscale computer. Forget Windows, that’s for squares. If you want to be cool or tech-savvy, you’re going to shell out an extra $500-$1000 for an Apple.

Two people I can reliably trust to spot fads for me are my sister and my personal trainer. Both have little computer knowledge. Nonetheless, my sister demanded my parents buy her a Mac…for what purpose, I have no idea. My personal trainer was also shopping for a new computer and his first thought was to switch to a Mac.

In the short run, this bubble will keep perpetuating itself. However, given the recession, people are going to start rethinking paying a huge premium for a Mac computer…when quite frankly, Macs aren’t that great. They really arne’t easier to use, especially if you grew up using Windows. Also, the ’security’ features of Macs are blown way out of proportion. Windows has gotten better in that department, and if anything, Macs are more vulnerable now since the main reason Macs were more secure was that no one was using Macs, meaning hackers had no incentive to target Macs.

When this Apple fad will end, no one knows. But unless their product truly becomes vastly superior, which from what I can tell, it is not, then these computers are just overpriced.

How To Fade: The clearest fade is to short Apple stock (AAPL). I’m considering doing this myself, but I’m reluctant to short any stock in this market. If the stock gets up to $150 or so a share (50% increase from where it is now and closer to its highs), then I’ll likely short it. Until then, I still think money is best made elsewhere.