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Dear Mr. Berko:

Dear L.W.:

I like Apple Inc. (AAPL-$93.72). I think AAPL has the best laptop computer on the market as well as other blockbuster products. That’s not just my opinion, but the opinion of the thousands and thousands of Apple owners and the thousands of new owners nationwide who have been buying those laptops, iPods, iPhones, etc. as if they were $20 gold pieces at half price. Apple’s new iPod, its new MacBook PC, its portable digital music players, its new iPhone, its software plus its overwhelming ancillary and peripheral products are light-years ahead of the competition in the United States and outclass anything made in Japan by a thousand miles.

If revenues are any indication of the company’s success, Apple aficionados are proud to tell you that revenues in 2004 were a niggardly $7.2 billion but grew fourfold to $32.5 billion for the fiscal year ending Sept. 30, 2008. While those scorching revenues put Dell and Hewlett-Packard to shame, AAPL’s earnings thundered from $1.36 a share in 2005 to $5.36 in 2008.

Heck, a lot of suits on Wall Street are telling us that 2009 revenues will go volcanic and explode by 20 percent while earnings go ballistic. If you bebop into any Apple Store, you just gotta believe those projections. The Apple Stores, like the one here in Boca Raton, Fla., are so people-packed that a pickpocket could lift enough wallets in just a couple of days to live like a pasha for five years.

Unfortunately, the hordes in this Apple store are lookers and touchers but not buyers. Unfortunately, even a highly skilled cutpurse would starve to death because those lookers and touchers, even in Boca Raton, couldn’t make change for a $20, and their plastic is maxed to the hilt.

I suspect this scene is being repeated at Apple Stores around the country. Layoffs across the nation are almost epidemic. Job losses in September were 121,000, October job losses exceeded 143,000, and the November numbers are expected to be higher again.

Almost every day the papers are reporting huge numbers: Merrill Lynch will lay off 10,000, Yahoo will be laying off 3,000, AT&T will be laying off 4,000, Northwest Airlines will lay off 10,000, and Delta plans to reduce its work force by 12,000. Fairly soon, thousands of Lehman Bros. and Bear Stearns people will stop receiving paychecks. It goes on and on, not just with big companies but also with small employers in small towns nationwide.

“So,” I ask myself, “who will be left to purchase those Apple PCs that sell for twice or three times the cost of a Toshiba or a Hewlett-Packard? And who will be left to buy those iPhones, iPods and other expensive playthings Americans use to distract themselves from the distaste of their daily reality?”

The answer is not encouraging.

Though most on Wall Street think 2009 will be an Apple banner year (I hope it is), I think 2009 could be an Apple bummer year. In early 2008 some clever hedge funds and computer programs pushed Apple above $200 a share and you got sucked into the Apple euphoria. There is no way in a sane universe that Apple was worth $200 a share in January 2008. That’s 40 times earnings. You’ve got to be dumber than a bag of hammers to pay $197 for a stock trading at that multiple. Didn’t you learn anything from the tech bubble in 2000?

I think AAPL will lose its momentum, not tomorrow or next month but sometime this winter or spring. I know that Credit Suisse, UBS, Oppenheimer, JPM Securities, Merrill Lynch, RBC Capital Markets, Argus Research and Morgan Stanley believe AAPL has wings and can fly to the moon. However, I think even Steve Jobs believes that AAPL might have reached its peak.

If you check the insider sales, you will note that a half-dozen officers and directors unloaded hundreds of thousands of shares between $140 and $160 during March and August 2008. You should have followed suit. And even at this price I suggest you take a $10,000 loss.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@comcast.net. © 2008 Creators Syndicate Inc.