Bookkeeping: Cutting Apple (AAPL) Going Into Earnings

I expect Apple (AAPL) to have good earnings and their custom lowball guidance. Which they will beat in 3 months. This is what they always do - but the market reacts randomly to this "guidance game" - some quarters they are fine with it, some quarters they go into panic taking the company at its word. January 2008 was an example of panic and we were caught red handed by a plummeting stock as rats jumped off the ship. 3 monts later the company trounced analysts estimates but it didn't help stop us from losing our shirt. Lemmings do not act rationally.

So with that said, along with the fact we almost always cut back exposure going into any earnings, I am cutting back Apple here in the $96 range ahead of earnings taking it down from a 2.7% stake to 1.5% of the fund. Again this is an act of being conservative, not doubting that Apple will have a good number. Earnings season is many times my least favorite period because gamblers across the world jump into stocks hoping for a pop and if they don't get it, they leave en masse creating bad outcomes much of the time. If, for whatever reason, the stock surges as investors are pleased with what the company says - we won't participate as much but in this market, pleasing gets you +10% and disappointing gets you -40%. That is not in our odds.

We'll probably do the same with Potash (POT) tomorrow ahead of earnings Thursday simply because while I *assume* all the bad news is reflected in the stock price, it really never is in this market and being down 40% in 5% of your portfolio is simply not worth it. It is always easier to make up a lost opportunity than making up lost capital.

Long Apple in fund; no personal position