Apple: Best Short of 2012?

Traders short Netflix

or First Solar

may have had quite a spectacular year, regardless of their other investments. Of course, nearly every year has its opportunities, and 2012 is shaping up just the same. By definition, the best short opportunities are the most contrarian in nature—finding stocks that everyone loves and then taking the other side of the trade. For 2012, that opportunity may be none other than Apple

. Crazy you say? That is exactly the point. In hedge fund land, Apple is the most widely held stock. The company has a ridiculous war chest of some $80 billion. Owning Apple stock appears to be better than holding cash. Yet, cracks are starting to appear in Apple's foundation. Earlier today, reports indicated that demand for the iPhone was

. The reason? Europeans, under budgetary constraints due to the ongoing economic crisis, were opting to purchase cheaper Android

devices in place of the more expensive iPhones.

has been reporting on developments with Apple in real-time. This news may highlight a key fact that many investors frequently forget: Apple is a luxury electronic brand. In times of economic distress, consumers on shrinking budgets will opt for cheaper products. Although the economic picture in the US appears to be improving at modest pace, concerns still remain. With some trillion dollars under management,

leaders Mohamed El-Erian and Bill Gross are fairly well respected in terms of economic commentary. On Thursday, they warned that the global economy would be in for a difficult year in 2012. If the economic turmoil in Europe spreads to the US, empty Apple stores in malls across America may become commonplace. Yes, Apple Macbooks may be twice as good in terms of stability when compared to machines running Microsoft's

Windows. Yet, it is a bit hard to justify spending $1500 on a laptop when you can get one with comparable specs for half the price from a retailer like Dell

. Even on the tablet front (a market Apple has—no question—dominated) the company is under attack from competitors looking to offer comparable products with more attractive price tags. Amazon's

Kindle Fire appears to be selling quite well, particularly for a first generation device. Admittedly, it lacks a camera and has a smaller screen, but at less than half the price, budget-seeking consumers may opt for the Kindle Fire over the iPad. And while its business model is being threatened, the broader investment community's opinion of the stock may be best characterized by the old Alan Greenspan "irrational exuberance" quote. At Benzinga, we are aware that mentioning Apple is a guaranteed way to draw attention to a story. Pieces written twice as well about other companies may only receive a fraction of the hits an Apple piece will receive. Twitter handles like @appletrader and @apple_trader abound. Interestingly, there are no handles (at least that I am aware of) like @walmarttrader or @halliburtontrader. Obviously, there are a lot of momentum traders in Apple, and these holders could be the first to abandon the stock if the situation deteriorates. It also bears repeating that Apple is the most widely held stock by hedge funds. While this is clearly a positive in the near term, it could rapidly deteriorate into negative. If the market comes under pressure, these managers—faced with redemption calls—could liquidate their Apple shares to cover their losses. This is not to say that Apple's business model is over. They have a portfolio of quality products, a boatload of cash, and hoards of fans. Yet, economic conditions in 2012 combined with the rise of competitors could mean that Apple's stock is trading significantly lower a year from now. Feel free to comment on this article and tell me how wrong I am. You will only be proving my point.