Apple Inc. (AAPL): 5 Warning Signs

Warning Sign #3: Splits Coincide With Apple Tops

Past performance is never a guarantee of future results. But you have to hang your hat on something … and history is as good of a roadmap as you’ll find.

If that’s true, stock splits have historically indicated a peak for Apple stock. Here is a quote from a recent Barron’s article:

“Based on history, splits in Apple’s stock have coincided with peaks … The previous three Apple splits on April 22, 1987; April 19, 2000; and February 11, 2005, all were followed by tops.”

Warning Sign #4: $3.2 Billion for Beats Headphones … Really?

Beats headphones are very popular with teenagers and 20-somethings, but Beats headphones are more of a fashion statement than a technology accessory.

There are much better headphones for cheaper prices. And the fickle whims of young consumers could turn Dr. Dre and his Beats headphones into fashion “has-beens” in a blink of an eye.

More importantly, Apple was crystal-clear that the real value in the Beats acquisition was its streaming-music subscription service … and not the headphone hardware.

However, Pandora (P) is kicking everyone’s butt — including Apple’s iTunes — so $3.2 billion for an also-ran streaming music service seems foolish to me.

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