AAPL, NFLX, TSLA -- Are These Cult Stocks Buys?

When a stock reaches "cult" status, the upside can be tremendous. Big share price moves on big momentum buying can propel these stocks into the stratosphere. Unfortunately, when the fuel runs out, these same stocks can fall back to Earth, and it can be quite painful for investors who hang on for the ride.

Three of the biggest cult stocks of the past few years are Apple (NASDAQ: AAPL), Netflix (NASDAQ: NFLX) and Tesla Motors (NASDAQ: TSLA). Each of these companies has a cool product that has redefined its respective space and all have loyal brand followings. Each also has seen a tremendous rise in share price, making investors who got in early huge amounts of money.

Yet the life cycle of a cult stock is one investors need to pay particular attention to. More specifically, you need to know what life stage that company is in if you want to make real money and avoid big losses.

Apple is the elder statesman in this trio of cult stocks, having sold products for far longer than the relatively youthful Netflix or new kid on the block Tesla. Over the past decade, investors who bet on AAPL have been rewarded like kings. The stock surged more than 6,200% from September 2003 to its all-time high just above $705 in September 2012, one of the biggest moves of any company over that period.  (more)

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