It may sound like some sort of riddle out a fairy tale, but the premise of our question is fairly profound; whether it would make more sense to buy 3 shares of Apple (AAPL) or one ounce of Gold (GC).
On the one hand, in Apple, you would get a piece of the hot, new kid on the block (at least compared to gold, which has been tendered for 5,000 years), the largest company in the land, and the Titan of the Tech Sector. Of course, you also get one of the best growth stories on earth as the parade of iProducts seems endless.
"Nobody has to own any of this stuff. I prefer to own the index and keep risk constant," says Lee Munson, Chief Investment Officer at Portfolio, LLC and the author of the book Rigged Money: Beating Wall Street At Its Own Game. "If you MUST indulge, I'd rather you go out...and buy Apple." Although he clarifies that he's not buying either right now, even as gold is enjoying it's best week of the year and Apple is struggling to stay above $550 a share.
As for gold, given its unmatched place in history, it's already measured in all sorts of ways, but always with the purpose of determining whether it is currently cheap or expensive. One such method was tied to the cost of a nice men's suit. Another way is to determine how many ounces of gold it would take to purchase the Dow Jones Industrial Average. Using the Dow/Gold Price Ratio of about 7.5 ounces at $1600 to buy the DJIA at 12,000, you can clearly see the cost is way down, but that's not to say it not going down again OR that's it recent bound will continue.
Interestingly, Munson points out Apple and Gold are two things that ''everybody is talking about" right now. Specifically, what new iGadget to buy, as well as how we're going to manage to get out from beneath our Federal budget deficit.
But in the end, the promise of Apple and why you should own it - if you don't already (products, strong management and margins, expansion into the corporate sector) is enough to keep Munson out of Gold. And besides, he says that he always has in the back of his mind that "when the world looks to be ending (like 2008), people aren't going to buy gold, they're going to buy dollars, and if things really get bad, they'll buy dry food and automatic guns."
Would you rather hold Apple, Gold, or Cash? Please answer our poll question below and visit us on Facebook.
