Investing in Apple Ahead of iPad 2 Launch

I am about as bullish on Apple (AAPL) as it gets. The recent rumors and hack reporting did very little except provide investors with the opportunity of a lifetime to purchase shares of AAPL at an incredible discount. Apple is the company of not only our generation, but likely our kids' generation. They company is not going anywhere.

On Wednesday, AAPL unveils the iPad 2 at an event in San Francisco. Rumor -- or relatively responsible reporting -- has it that the company might even have the new device in stores as (fill in the blank) takes the stage to promo the tablet that rules the world.

No matter what happens, I think the momentum Apple has going into this event blows the doors off of the stock. If you are holding March $360 calls like I am, I think you're in good shape. If not, it could make sense to buy them. They closed at $5.10 on Monday, up by $1.70.

If you want to give yourself some breathing room, you can buy something at- or in-the-money or simply look out to options with an April expiration. I see little downside to going long AAPL -- even aggressively -- prior to the iPad 2 launch party, despite the fact that AAPL often sells off on positive news. Any sell-off should prove short-lived, just like the sell-offs that came before.

Just how much upside we see this week depends on several factors. First, immediate iPad 2 availability might send APPL comfortably past $360 by the end of the week. The next big factor involves who stands in front of the Apple logo and introduces the product. For a while, I thought it made sense for Steve Jobs to show up, if his health permits. You could not write a better storyline. Then I figured, we would probably just see Philip Schiller, Apple's SVP of Worldwide Product Marketing. (No offense intended, Philip). But a few minutes later, I had an epiphany.

With all of the concern over succession at AAPL, the lingering doubt about the company's future that putting Jobs on stage could create likely outweighs the potential benefit. In some ways, it could undercut the work Apple COO Tim Cook has ahead of him. It's sort of like Jerry Jones showing up on the sideline at a Cowboy's game. Of course, the big difference is that Jobs is competent and Jones is not. But, you get the point. In my opinion, you give the reigns to Cook on Wednesday.

Not that Apple really cares, but you'll still see a short-term pop in the stock. More importantly, such a move plants the seed in the minds of investors that Cook is the guy to lead America's Company going forward. And, if he performs as well as he has lately, Cook can put another dent in the default notion that nobody but Steve Jobs can lead Apple into the future.

Disclosure: I am long AAPL. I may purchase additional AAPL call options in the next 72 hours, using the exact or similar strike prices and expiration dates as the ones suggested in this article.