Almost exactly one year ago I pitched a strong buy recommendation for Apple stock to the Sprott student investment fund. Since I made that buy recommendation, the price has gone from $449 to $633.

Investing in Apple at the time of my recommendation would have resulted in a to-date holding period return of over 40%. My target price at the time had been $550, based on the combination of a discounted cash flow analysis and a relative valuation. Am I a stock picking genius? Should you await my next buy recommendation so that you can partake in the 40% gains that I yield? Absolutely not. I won't be making any more buy recommendations on any individual securities. This report on Apple was the report that made me realize that no matter how much research and information goes into the analysis of a security, the conclusion and recommendation weigh on a mass of assumptions that will differ based on the opinions and style of each analyst. I put weeks of work into this report and I had help from other MBA students and real analysts, but by the time I was ready to present I had come to understand that all I was doing was trying to convince all of the other analysts that my opinion was the right one. Picking stocks is not about scientific objective data analysis, picking stocks is about taking data and subjecting it to opinions and feelings.

It's very easy as an investor to get sucked into the psychology behind seeing a prediction like this, and the media pumps them out constantly. I live in the world of market based investing and efficient markets, but even I have a part of me kicking myself for not buying Apple when I wrote this report. That same part of me wants to buy in now so I don't miss any more gains, but I know better. These emotions are normal for investors; overcoming them is one of the greatest challenges to having success in financial markets.