1) Don’t marry ANY stock because at the end of the day, they ALL disappoint. Trust me, if you don’t know this, study history or you will learn the hard way.

2) I have no problem riding trends and trading stocks all the way up. In fact, one of my favorite quotes is: “Just when you think a stock can’t go higher, it usually does.” What I do have a problem with is when people say: “I am NEVER, EVER selling the stock!” People said the same thing about the big cap tech stocks in the late 1990′s ($DELL $CSCO $INTC $WCOM $MSFT $EMC $YHOO), and rode them all the way up…only to ride them all the way down.

3) Apple is a PHENOMENAL company with earnings and sales that are off the charts. However, it’s not exactly an undiscovered story! The company will grow its $100 billion in revenue next year, but it CANNOT sustain +80% sales growth. Again, it will grow, but the growth rate will eventually slow.

4) Don’t ever say “This time it’s different.” Those are very dangerous words.

5) Sorry for the reality check, but the current big cap growth stocks ($GOOG $PCLN etc.) will eventually become dead money…just like the prior big caps.

6) For those of you who think Apple is immune to a market selloff, let me remind you that it corrected -60% (from $200 down to $80) during the Bear Market of 2008.

7) I spoke to a few people today who have owned Apple since it traded in the single digits. I asked them when are they going to sell, and they replied: “NEVER!” This worries me because the same mentality that causes you to ride a stock up, also leads you to ride it down.

Again, I have absolutely nothing personal against Apple. I am simply trying to remind people to eventually think of an exit strategy or at least lock in SOME profits along the way up. You are more than welcome to send more hate mail, but it doesn’t matter because people are going to do whatever they want anyways. I sincerely hope you make a fortune with all your trades, just keep in mind that ALL stocks eventually disappoint, which is why you should NEVER marry a stock.

$AAPL $CSCO $DELL $EMC $GOOG $INTC $MSFT $PCLN $WCOM $YHOO

Follow me on Twitter @jfahmy
Follow me on StockTwits @jfahmy

1) Although the volume on the NASDAQ Composite was higher than the previous day, if you remove the 500m shares that $CSCO traded above its daily average, the overall volume is actually LOWER than Wednesday’s volume.

2) When looking at the other major indexes: the S&P 500, the NYSE Composite, and the Dow Jones Industrials all had lower volume than on Wednesday; another sign that the selling was not severe. As my friend Michele Schneider (@marketminute on Twitter) pointed out, the volume on the $QQQQ $SPY $IWM and $DIA were all lower. These are ETFs that track 4 of the major indexes.

3) The major indexes closed fairly high in their ranges. It’s a sign of institutional support when the indexes open low and make their way higher throughout the day.

4) As another friend pointed out (@CubbieBears on Twitter), the NASDAQ Composite closed above its 10-day moving average; an area it’s held since this rally began on September 1.

5) Many TRUE big cap leaders such as $AAPL $BIDU $FFIV $NFLX held up well today and some of them were higher on strong volume.

6) I say TRUE leaders because I don’t consider $CSCO $DELL $MSFT $INTC leaders anymore. In fact, they have been dead money for over 10 years now. While they are all excellent companies, keep in mind that “Wall Street wants to see growth.” I have no interest in owning any of these companies because they’re simply too big and can’t sustain high growth rates.

7) I always say: “Pay attention to your stocks!” If I only looked at my stocks on Thursday (without looking at the indexes), I would have thought the major averages closed up for the day. Why? Because I finished up for my clients and the majority of our stocks finished positive on the day…once again proving the importance of strong stock selection.

Follow me on Twitter @jfahmy

A few days ago, I told two friends there is a “possibility” that $AAPL’s stock has topped. One of them threw his iPad at me and the other smashed his new iPhone on the table, thus breaking an already useless antenna.

I have to make something perfectly clear: I AM NOT SAYING THAT APPLE HAS TOPPED. I am simply saying to keep an open mind to the “possibility” that it could be dead money for a while.

Here are my reasons:

1) You should NEVER marry a stock! Companies go through growth periods (some longer than others), then sales slow down, and then they eventually decline. Take advantage of the growth period, ride the trend, and then kick it to the curb! Never become obsessed with a company because they will ALL eventually disappoint.

2) Stocks tend to top 2 to 3 quarters before their earnings top. In 2000, companies such as $CSCO $DELL $QCOM $MSFT topped in the early part of the year, but continued to report stellar earnings later in the year. Investors kept asking, “Why are these stocks declining after such strong earnings?”…only to find that sales would slow a few quarters later. Keep in mind that the stock market is a leading indicator. It trades on what will happen 6-12 months from now.

3) Every growth manager on the planet owns Apple. It is not a new or undiscovered story.

4) The law of large numbers. $DELL was a big winner in the 1990′s because they increased their sales from $3 Billion to $30 Billion. Their growth rates were as high as 40-50%. After that, how many more computers could they sell? In other words, the larger the revenues, the harder it is to grow at a high rate.

5) Difficult year-over-year comparisons. In the last two quarters, $AAPL reported revenues of 15.5B (32% YOY growth) and 13.5B (49% YOY growth). Going forward, Apple will still grow, but it will be extremely difficult to sustain such high growth into next year. In fact, next year’s analyst estimates are already expecting growth to slow from 52% in 2010 to 19% in 2011.

Again, I must repeat: I DO NOT HATE APPLE! I simply don’t like to own stocks that I feel will be dead money. My clients will never see me own $MSFT $INTC $GE $IBM $DELL or any other mega-cap company. Why? Because Wall Street wants to see growth! And I’m not looking for 10% growth; I’m looking for 30% earnings and sales growth or higher. I honestly feel that Apple is one of the best-run companies in the world. I am not trying to bash the stock. I am simply reminding people NEVER to marry a stock because they will ALL eventually disappoint!

Follow me on Twitter @jfahmy