My philosophy when it comes to shorting anything? Don't.
It's not worth it. Inherently the max profit you'll make is 100%.
Not only do you have to be right about a company, you also have to have the right timing. Which makes it twice as hard.
If you don't like a company, don't buy it. Move on and find other opportunities for growth. It's a lot more fun.
I want to short Apple. I think it'll go down in the intermediate/long-run.
Having been interested in the tech hardware world for a while, I see Apple's sky-high market share as an imminent sign of its downfall. To be considered the most valuable company in history within such a volatile industry is not the best news: ask Microsoft, back when it was the most valuable at the height of the 2000 bubble. With the gap left by Jobs, the pace of innovation is slowing within Apple; I believe the iPhone 5 was the last phone in the works and you can sense much of his influence wasn't exerted on that product in his last years. It wouldn't surprise me if a leaner and more agile tech company reinvents the tech landscape and is able to topple Apple in a few years (as Apple's package of hardware and software did to Microsoft's software).
Apple still holds the most leverage in the industry due to its high market cap and talent. It still has the potential to be the highest inflation-adjusted valued company in history if the greater global consumer markets are still untapped and it continues to release blockbusters like the iPhone and the iPad. But at the first sign of troubling news (i.e. management woes, a bad conference event, etc.) , I will short Apple due to my belief that an increasingly clunky and slower-moving organization can never remain on top in the tech industry.
As already said, I'd highly advise against shorts as they can get ugly very quick. If you think Apple will decline, look into buying long term put options on it. That way if the price keeps jumping like it has, you're only out the cost of the options.
Scary to short AAPL. Like in your example MSFT, it only fell 50% from it's peak. but irrationality is a crazy thing, if the economy starts to recover and people start buying stocks etc, who knows what AAPL could go up to. Kind of like Whitney Tilson, who had the balls to short NFLX. He was correct, but he went in at like $100 something, only to see nflx go to $300 before it finally collapsed.
If you really wanna short, best to not be a hero, and short it on the decline.
I agree. Generally the gains don't outweigh the risk.