Apple (AAPL) and gold spent a decade making true believers rich only to gut them over the last 6 months. From October 1st of 2012 to the middle of this month, shares of Apple dropped 40%. At the same time, safe haven-seekers long the SPDR Gold Trust ETF (GLD) got drilled by 25%.
Gold and Apple aren't "supposed" to move in lock-step. As Lee Munson, chief investment officer of Portfolio LLC notes in the attached clip, the first thing they teach you in "little trader's school" is that gold and stocks move opposite to one another.
Assets don't care what you think should happen. Not only did Apple and gold drop in synch, they bottomed together as well. Since the start of last week shares of Apple are up more than 11% and the GLD has tacked on half that amount.
With gold trading like a lower beta version of Apple, Breakout asked Munson the same thing we did last June: Which would you rather own? Munson is going with Apple again, but only for the very patient.
"If you want to own Apple I think you've got to buy that and you've got to put in a drawer," he says. "I think ten years from now Apple is probably going to be 30, 40, 50% higher than it is today."
Munson is more skeptical of gold but in the interest of disclosure he has some emotional baggage dating back to a bad experience from his grade school days. Watch the clip for details on that if you choose but know that from where Lee Munson sits, the Apple bounce is more convincing than the barbaric metal's comeback for those looking to buy and hold.
- Investment & Company Information