Kaminsky's Call: The Best Way To Play Apple's Dominance
Morgan Stanley, Vice Chairman
There are stocks. There are bonds, and then there is Apples.
I wish I could claim that great line as my own (it came from my friend and Strategy Session regular Peter Boockvar, in one of his superb morning notes), but the fact remains, Apple is an "asset class" by itself.
Some of the best money managers I know summed it up perfectly the other day: not owning Apple is like not owning IBM in the 60s. It is the ultimate secular growth story of its generation. People would choose i-products over cable if you put a gun to their heads.
The chart below shows how IBM did versus the S&P 500 from 1962-1970:
So my "Call-to-Action" is both straight forward, and somewhat nuanced: Apple merits a home in any portfolio, even if buying it is anathema to all your instincts as an investor. But for those who are transfixed by nominal stock prices and don't want to shell out the cash (classic retail mistake), there are derivative plays off Apple that are less capital-intensive.
And the best one, in my opinion, is American Tower. They make the towers that carry the network that supplies the broadband signal used in all mobile devices. In short, they are riding shotgun to the mobile phone growth story.
But don't take my word for it. Evercore's Michael Price, in another Strategy Session exclusive, could hardly contain his excitement at wireless' growth prospects. He pointed something out about Apple that was both obvious and brilliant; in just a couple years, Apple will be the world's largest seller of computers. Yes, computers! The same turf as Dell and Hewlett-Packard.
What do I mean?
Well, say what you want, but the i-Pad and i-Phone are not handheld devices; they are wireless computers, and their popularity should only increase.
And as it does, so should American Tower's business. (Jim Taiclet, the CEO, will join us today off the heals of his earnings).
To be clear, American Tower is not a substitute for owning Apple. But other than the options market (and for those interested, my colleague Melissa Lee, hosts an excellent show on the matter, Options Action, Fridays at 5:30 pm), American Tower offers the best (and least capital-intensive) way to play Apple's dominance.
But don't take my word for it. Tune in today and judge for yourself.
Programming note: "The Strategy Session," hosted by David Faber and Gary Kaminsky, airs weekdays at Noon ET on CNBC.
Gary Kaminsky does not hold any equity positions.
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