I’ve written before about how people tho…

I’ve written before about how people thought I was nuts when I was writing about how   I was buying Apple at $7 per share back in 2003, even though at that   time, as I put it for my subsribers, “Apple was trading for less than   the cash it had on the balance sheet, making it so cheap it’s   ridiculous.”

My long-time friend and mentor, James Altucher, who was a subsriber   of mine back (and still is!) when I was buying and holding Apple from   2003 on, asked me on Gchat today what my three biggest bull points for   Apple are right now.  James had earlier this week has joined me as a   Marketwatch columnist explaining how Apple could get to a $2 trillion   market cap or about $2000 a share in coming years.  He wanted my take on   how Apple could get there.

So my answer, and the discussion that followed which he finished by   writing that, indeed “Apple’s so cheap it’s ridiculous”, are below:

1. Apple’s trading at less than 8x next year’s $30 per share in   earnings when you include the $50BB plus in net cash the company has.

2. The products are the highest quality out there and nobody can catch that, not google, not softee, not sony not nobody

James: I agree on both those

3.  The platform that Apple has locked people into is the key….almost    everybody who is now using iTunes will still be using iTunes in five    years, the people nurtured on iPhones 1-5 will still be using iPhones    #15-20 in 10 year, and everybody using facetime will still be using    facetime, and you’ll be doing so much more inside that    platform/eco-system that apple’s created.  And that’s the real key.  And   it’s not about 2011 anyway.  It’s about 2021 when you live surrounded   by iOS in your home, your car, your office, your gadgets.

James:  That’s great stuff.  Thank you, you should publish that on TradingWithCody.com and for your blog too.  Next question is, how many ipads will be sold by 2015?

Me:  More importantly than how many iPads in five years from now, the   question is what will apple come out with between now and 2015 that   will creatively destroy as it canniablizes the iPad market.  Remember   what they did to their iPod?  To their iPhone 1?  They just ran right by   themselves with increasingly better products that nobody else can   catch.  So too will it be with tablets in coming years.

James: I think nothing.  I think ipad is it.  iPad’s game over.    It willl get flatter and faster. Maybe apple tv will merge with ipad.

me: I think in five years we’ll have apple ios credit card   holographic projector phones.  My credit card will beam my movie on a   109″ HD screen in my living room  or 3D HD all around me in my bedroom   or while I’m out camping I will  just have it project an iPad form   factor.

James:  Apple minus cash is less than 8x next year’s earnings.  They are so cheap its ridiculous.

me: Yup, I’ve been saying that same thing, as you know, for eight   years now.  And it’s still true even though the stock has risen some   4500% since the first time I wrote that.   Thanks, man.