In April 2005, we analyzed Apple using the RBP methodology. Our analysis suggested that Apple could not achieve the required business performance necessary to defend the company's current stock price.

At the time, Apple's stock price of $42.09 implied that Apple would have to sell 11.7 million iPods, 2.4 million desktops and 2.3 million portables over the next 12 months. Compare this to the 8.3 million iPods, 1.8 million desktops and 1.7 million portables sold in the previous 12 months.

We believed that Apple wouldn't be able to sell the required number of products, suggesting a short strategy. Apple is a story stock, however, and shorting it is an extremely risky proposition. It required a special trading strategy.

There was a 52.1% chance of Apple's management delivering the performance to support a $42.09 stock price.