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written by reader Apple or Facebook

By Anonymous Questions, July 20, 2017

ThanksTravis would u buy apll for hold until on death bed or FB. Look forward for answer own 3 now my choice investing for locals no
Charge just tell them what I would buy if I desposal cash.

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Travis Johnson, Stock Gumshoe
July 21, 2017 10:49 am

I think you’re asking which stock to buy for a “hold forever” position, right? I own both, though my Facebook position is much larger and I have recently taken a small measure of profits on Apple (a few months ago).

I think the growth potential is much more dramatic with Facebook over the next decade, but Apple is a safer stock because of its substantial and growing dividend and much larger cash position. Both have meaningful competition (Samsung and Chinese phone makers for Apple, Alphabet for Facebook), but also have such dramatically strong leverage over their industries that it is difficult for competition to make an impact on their results.

I think the competitive threat to Apple is more worrisome than the threat to Facebook right now, mostly because Apple continues to have such dramatically high profit margins compared to its hardware-building competitors, and because their technological lead over Samsung and other phone makers is thin and relies heavily on the weakness of their competitors in software (which can change fairly quickly) and on brand power (which has been more persistent)… but that’s a judgement call.

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