Flip The "Flip It"! Buy AAPL and Another Tech Name or Two

One of the themes of this blog and of Happy Hour that we covered extensively with Mort Zuckerman on our Wall Street block party last week is that investors should often just focus on the individual stocks and not the broader market. And indeed, I still maintain that caution is king as we now clearly are seeing the down part of the economic cycle. But I still see a stock or three, especially in the technology sector, that I think look ripe to pop.

First off is Apple. To review, I maintain that Apple has been and remains a great long term investment, as I wrote here in 2003, and recently I'd recommended buying some puts ahead of the WWDC conference when the stock was in the 185 range and then I recommended taking the profits on that trade after the stock had fallen about 5% that day to open back up the long term investment exposure of the "core" Apple long position.

I'd get long some Apple calls, say $50 deep in the money and dated three months out right now. The 3G iPhone is going to sell off the shelves in Europe and around the world.  It's going to be even bigger than the hype currently surrounding it.  Flip the "flip it" this time, eh?

I just spent the last five days running around Milan and the coast of Italy with a local. And everywhere I went, people had their iPod on. And I asked everyone, granted in a very non-scientific manner, what they thought of their soon-to-have-ability to buy the 3G iPhone...and everyone under the age of 30 was excited. Many have put off upgrading their phone for the last few months as they anticipated the new iPhone was soon to be rolled out in their country.

And Apple is indeed rolling this thing out all over the world. And the price point is so much cheaper than the comparable Nokia offering, which by the way, is awesome too -- it's just too expensive and not exactly "Apple".

And that was another interesting point during these discussions about Apple. I asked everybody if most kids in Italy buy Windows or Apple...and most said "used to be Windows, but now only Apple."

For years I was ridiculed when I used to write about the "halo effect" (here in 2005, for example) from the iPod when the iPod first rolled out by guys who said: Jobs was an idiot and could never turn Apple around or that MP3 players were too specialized to hit critical mass when phones have that ability anyway or that the iPod wasn't a good product cuz it scratched too easily and so on. Guess what -- the halo effect is still building. In Italy even.

The stock market and economy still likely have more downside to them as we unwind the credit bubble.   But who cares?  Find me some great stocks instead!  I'll mention another name or two on here in the next week or two (and you can also get some exclusive picks with more detailed fundamental analysis by signing up for The Cody Report newsletter).