Filed under: Forecasts, Apple Inc (AAPL), Bank of America (BAC)

Which is the better investment, Apple Inc. (NASDAQ: AAPL) or Bank of America Corp. (NYSE: BAC)? Most investors would take Apple’s side. Even though there is some concern about the softness of iPod sales, almost no company has been more innovative over the last year in producing hot-selling new products. Unit growth prospects for the Mac and iPhone are the envy of the computer and handset industries.

Bank of America, on the other hand, is part of an industry where write-offs cannot seem to find a bottom. With housing and consumer credit getting worse, it is hard to predict how much more money center banks may have to show as losses in 2008.

But, among the 20 most widely held stocks, so far this year, Bank of America has done the best, up 2.2%. Apple has done the worst, down 36.7 %.

The lesson here may be that the companies with the best commercial prospects may not aways do the best in the market, especially when they sport high valuations. A look at Apple’s shares over the last year shows that they peaked in late December, up over 130% for the period. It did not take much in terms of a modestly weak forecast for the current quarter to start a bloody sell-off. Expectation had simply become too great.

At Bank of America, a look at the last year showed the stock had dropped almost 35% in mid-January. The shares are still way down for the period but the percentage drop is only 20% now. Wall Street seems willing to believe that most of the big write-offs are behind the bank and that bad news this year will be modest.

Apple may be asking itself if its actually good to be the company everyone thinks will do well.

Douglas A. McIntyre is an editor at 247wallst.com.

Permalink | Email this | Comments

Share This

This entry was posted on Sunday, February 10th, 2008 at 10:53 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.