Apple now worth more than Google and Microsoft combined [u]

1468910

Comments

  • Reply 101 of 190
    cameronjcameronj Posts: 2,357member
    Quote:
    Originally Posted by I am a Zither Zather Zuzz View Post


    Wait...Where's Slappy to tell us that Android is Winning?



    Where's the haters to tell us how "innovative" Microsoft is with its Windows Phones?



    Funny, I don't seem to hear anything...



    Same place all the people who claim that AAPL plunges after earnings are hiding. Oh wait, they're not hiding, they're still complaining on this thread
  • Reply 102 of 190
    Quote:
    Originally Posted by mateo999 View Post


    The earnings are generated from the operating assets of the company, not its cash. So by including the value of cash (which should be valued 1:1 to its face value) in the numberator of the P/E ratio, you're wrongfully pushing up the calculated P/E. This is punishing apple's valuation by making it look more expensive than it really is.



    Put it this way... Apple's operating assets earn $40 in EPS, to which you apply a ~10x P/E multiple = $400. Then you add on the $105 in cash, which gets you to around today's stock price. I'm saying the company is currently valued at under 10x p/e, not 14x.



    I (largely) agree. One should always value the operating assets first and then add back the (excess) cash. Apple is likely even more undervalued in that basis.



    It is just that one should then do the same in coming up with peer P/E ratios as well. I was using the 'raw' P/E ratio for the S&P500 and WMT, and hence the same for Apple (even though, I agree, Apple's level of cash is at a qualitatively different level - say, as % Revenue or Assets -than anyone else's).
  • Reply 103 of 190
    matrix07matrix07 Posts: 1,993member
    Quote:
    Originally Posted by SolipsismX View Post


    I appreciate the detailed post but I can't say I understand it. In fact I'm quite confused on how debt looks like an asset and having cash on hand looks like a liability.



    I think he meant the cash is IN the market cap but I'm not sure why having more debts is a good thing.
  • Reply 104 of 190
    wigginwiggin Posts: 2,265member
    Quote:
    Originally Posted by OllieWallieWhiskers View Post


    Apple is about to unveil the "Sell a share, get an iPad" program.



    That's Apple's new stock buyback program.
  • Reply 105 of 190
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by Dr Millmoss View Post


    So this really points out the absurdity of dwelling on Apple's cash assets as something of value to stockholders. Unless you are planning to buy the entire company, it's a complete abstraction to you.



    Why do people buy stock in a company? Unless you're a lunatic you are betting that the stock will rise due to increased performance over a set or open time frame.



    Now you say that having cash is not an asset for a tech company but that means they can buy supplies at cheaper prices, not have to borrow and pay interest, can invest more in R&D, and wait out dips in the market. Why you don't think this is a good thing sounds absolutely crazy!



    I get mateo999's general point but claiming that having cash on hand is not of value is ridiculous as it clearly points to the company's future health, assuming they use it wisely.



    I'd love to hear your argument why Apple should take on debt instead of profit.
  • Reply 106 of 190
    Quote:
    Originally Posted by SpamSandwich View Post


    Sure, but the jump in price today is still mind-blowing.



    Oh, absolutely.
  • Reply 107 of 190
    Quote:
    Originally Posted by Dr Millmoss View Post


    I pretty much ignore the DJI, it's just too arbitrary. But the larger point is, we tend to fixate on momentary stock movements because that information is so readily available today. I wasn't very long ago that only traders on the exchange floors had access to this information. Everyone else found out what their stocks did when they opened their morning paper the next day. I go for weeks sometimes without looking at my portfolio at all. If I have any belief in my investment strategy then it's not necessary to check it all the time. It's a good discipline. I recommend it. For an investor. For a trader, your mindset is totally different. Decide which one you want to be.



    True, if you've already bought a stock and you believe in it then the Dow aint going to be useful at all.



    If you are ready to buy a stock, though, it can be useful. If the Dow is oversold and the stock you are thinking about buying is oversold then the risk is lower and it's probably a good time to buy... the opposite is true if both seem to be overbought. Of course, there is a lot more to it than that but, hopefully, you've done a lot more dd in the first place before thinking of buying a certain stock.
  • Reply 108 of 190
    MacProMacPro Posts: 19,712member
    Quote:
    Originally Posted by Dr Millmoss View Post


    Did either of you actually read that story? (Too much to ask, I know -- the insults flow so much easier if you don't.)



    The point is, momentary or daily moves even in the broader indexes of the market are not really important. This is also true, if not more so, for individual stocks. You could only read this as a "put down" if you have some kind of persecution issue.



    Persecution issue? Nice try.



    You wrote ... "Yeah, somebody always has a prediction that never fails. Millions of stopped clocks can't be wrong." .. to my joke about AAPL never fails to drop after a major success. Which is a common response to large AAPL stock gains here on AI, kind of like 'Safari is snappier' is to a new OS update ...



    I joked about the put down ... I could have simply pointed out it was snarky ... but I passed
  • Reply 109 of 190
    MacProMacPro Posts: 19,712member
    Quote:
    Originally Posted by SolipsismX View Post


    Why do people buy stock in a company? Unless you're a lunatic you are betting that the stock will rise due to increased performance over a set or open time frame.



    Now you say that having cash is not an asset for a tech company but that means they can buy supplies at cheaper prices, not have to borrow and pay interest, can invest more in R&D, and wait out dips in the market. Why you don't think this is a good thing sounds absolutely crazy!



    I get mateo999's general point but claiming that having cash on hand is not of value is ridiculous as it clearly points to the company's future health, assuming they use it wisely.



    I'd love to hear your argument why Apple should take on debt instead of profit.



    I'm glad I'm not the only one baffled by the cash element.
  • Reply 110 of 190
    Quote:
    Originally Posted by SolipsismX View Post


    WP7 is innovative but being innovative doesn't make a product popular. Even being better tech doesn't mean a product wins over inferior tech as there are many other aspects to be considered. I think MS's biggest problem with WP7 is that they decided to keep the Windows name. If they had only rebranded it they could have shed a lot of what people dislike about MS. I also think they could have taken a solid hold of the tablet industry had they focused on that with the WP7 UI instead of focusing on a phone that they clearly are very late to market. Does that really make an Apple hater?



    I disagree. Microsoft needs to change it's name period. People don't like Microsoft.



    I never used one, but people have said that the Zune was a far superior product to the iPod. But it crashed and burned to the point of disintegration. Why? Certainly not because it was a Windows Music Player. Because it was perpetuated by Microsoft, I think. That and their lame marketing strategy and that name!! Zune.



    Microsoft is identified as the big behemoth that had to crap on people on its way to the top, and then just sat there, thinking they could continually come up with incremental progress with no real innovation, until it was too late.
  • Reply 111 of 190
    tundraboytundraboy Posts: 1,882member
    Quote:
    Originally Posted by SolipsismX View Post


    I appreciate the detailed post but I can't say I understand it. In fact I'm quite confused on how debt looks like an asset and having cash on hand looks like a liability.



    As used in "Enterprise Value", the word 'value' doesn't have the same meaning that us regular folks attach to it. I don't really understand the purpose of the number and I have an advanced degree in economics.



    It's similar to Net Worth + Liabilities - Cash. (But you use market cap, the market's estimate of 'true' net worth, instead of accounting net worth, which is a suit's estimate of 'true' net worth.)



    So EV is in effect similar to Assets-Cash. (Because Net Worth = Assets - Liabilities) Which is taken to be some measure of the value of the company's productive assets. But not 'value' as in how much it is worth to you and me but more like 'value in dollars' as a measure of quantity of productive assets.



    But the "value of a company's productive assets" is not the same as the company's overall value, i.e. net worth. And comparing the value of different companies' productive assets is useful only if you also know their profitability.



    Exxon might have 'more' productive assets than Apple, but how much profit is Exxon drawing from those productive assets? Instead, I would use EV/Profits and the lower is this ratio, the more 'efficient' is the company in employing its productive assets.



    On the other hand, net worth by itself is a meaningful number and comparing net worth across companies is a meaningful exercise.



    Furthermore with EV, you use market cap, not accounting net worth, so you're injecting even more uncertainty on your measure of the company's stock of productive assets.



    Bottomline if you want to use EV to evaluate a company's performance, use EV over Profits, not plain old EV. Notice, all other things equal, a lower EV is actually desirable! --Which answers the conundrum about EV: Why would larger debt raise the 'value' of a company? The answer is it doesn't, because a higher EV makes the company look less efficient, i.e. worse.



    Have I muddied the waters sufficiently now?
  • Reply 112 of 190
    MacProMacPro Posts: 19,712member
    Quote:
    Originally Posted by Psych_guy View Post


    I disagree. Microsoft needs to change it's name period. People don't like Microsoft.



    I never used one, but people have said that the Zune was a far superior product to the iPod. But it crashed and burned to the point of disintegration. Why? Certainly not because it was a Windows Music Player. Because it was perpetuated by Microsoft, I think. That and their lame marketing strategy and that name!! Zune.



    Microsoft is identified as the big behemoth that had to crap on people on its way to the top, and then just sat there, thinking they could continually come up with incremental progress with no real innovation, until it was too late.



    The line 'A rose by any other name ... ' ... only in reverse ... springs to mind
  • Reply 113 of 190
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by Psych_guy View Post


    I never used one, but people have said that the Zune was a far superior product to the iPod. But it crashed and burned to the point of disintegration. Why? Certainly not because it was a Windows Music Player. Because it was perpetuated by Microsoft, I think. That and their lame marketing strategy and that name!! Zune.



    I agree that Zune is a dumb name, but I also think iPod and iPad are also dumb names. I think the Zune's failure — outside of coming to market so late compared to the iPod — is that the first generation was bad. It wasn't until later that the OS was very good. By that point the damage was done and the iPhone was already sucking all the oxygen out of the handheld market. Not just for phones but for the iPod, too.
  • Reply 114 of 190
    Quote:
    Originally Posted by focher View Post


    I be luvin me my's Apple stock. I moved my previous employer 401k over to a Rollover IRA last year, then promptly bought all AAPL with it. I'm long on Apple.



    Please buy a put at 350 or so Jan 2013 expiration and pay 2% to protect your retirement from losing more than 1/3 of its value (or so).
  • Reply 115 of 190
    Quote:
    Originally Posted by matrix07 View Post


    I think he meant the cash is IN the market cap but I'm not sure why having more debts is a good thing.



    You are misinterpreting what's been explained. It isn't a good thing, and nobody said it was.



    Quote:
    Originally Posted by SolipsismX View Post


    Why do people buy stock in a company? Unless you're a lunatic you are betting that the stock will rise due to increased performance over a set or open time frame.



    Now you say that having cash is not an asset for a tech company but that means they can buy supplies at cheaper prices, not have to borrow and pay interest, can invest more in R&D, and wait out dips in the market. Why you don't think this is a good thing sounds absolutely crazy!



    I get mateo999's general point but claiming that having cash on hand is not of value is ridiculous as it clearly points to the company's future health, assuming they use it wisely.



    I'd love to hear your argument why Apple should take on debt instead of profit.



    You are confusing several concepts here.



    I am saying that carrying large amounts of cash on a balance sheet is not relevant to investors, because investors never see a single penny of it unless the company either pays some of it out as a dividend or buys back shares. The money might as well be on the moon, as far as investors are concerned. Please note the emphasis. For this reason, I am saying that doing ex-cash calculations to lower a stock's PE is a pointless exercise.



    I have not in any way, shape or form said that debt is good. Please, please re-read my explanation of ex-cash calculations, and under what (very limited) circumstances they are relevant.
  • Reply 116 of 190
    MacProMacPro Posts: 19,712member
    Quote:
    Originally Posted by SolipsismX View Post


    I agree that Zune is a dumb name, but I also think iPod and iPad are also dumb names. I think the Zune's failure ? outside of coming to market so late compared to the iPod ? is that the first generation was bad. It wasn't until later that the OS was very good. By that point the damage was done and the iPhone was already sucking all the oxygen out of the handheld market. Not just for phones but for the iPod, too.



    And IMHO you just summed up the iPad market dominance too. Even if they ever make a wonderful tablet the opposition is too late.
  • Reply 117 of 190
    Quote:
    Originally Posted by digitalclips View Post


    Persecution issue? Nice try.



    You wrote ... "Yeah, somebody always has a prediction that never fails. Millions of stopped clocks can't be wrong." .. to my joke about AAPL never fails to drop after a major success. Which is a common response to large AAPL stock gains here on AI, kind of like 'Safari is snappier' is to a new OS update ...



    I joked about the put down ... I could have simply pointed out it was snarky ... but I passed



    Bizarre hardly covers it.
  • Reply 118 of 190
    MacProMacPro Posts: 19,712member
    Quote:
    Originally Posted by Dr Millmoss View Post


    Bizarre hardly covers it.



    I'd agree there, but don't fret, you can fix it .. you simply need to learn to respond without the snarky tone, which may not be intentional but is never the less, coming over that way time and time again.



    It's a happy day, let's all sing Kumbaya and move on
  • Reply 119 of 190
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by Dr Millmoss View Post


    I am saying that carrying large amounts of cash on a balance sheet is not relevant to investors, because investors never see a single penny of it unless the company either pays some of it out as a dividend or buys back shares. The money might as well be on the moon, as far as investors are concerned.



    You are ignoring that Apple is spending their cash, they are just making more than they are spending. There a numerous reports of Apple investing billions in lump sum investments to other companies. This is not a bad thing for investors and you can look at today's stock price to see that Apple's actions have increased share holder value since they went from red to black.
  • Reply 120 of 190
    MacProMacPro Posts: 19,712member
    Quote:
    Originally Posted by SolipsismX View Post


    You are ignoring that Apple is spending their cash, they are just making more than they are spending. There a numerous reports of Apple investing billions in lump sum investments to other companies. This is not a bad thing for investors and you can look at today's stock price to see that Apple's actions have increased share holder value since they went from red to black.



    I'd also add, this comment Millmoss made "the money might as well be on the moon, as far as investors are concerned." is far from correct. I think any investor doing due diligence would see exactly what you pointed out and that cash and how they have used it thus far it gives a massive sense of well being about Apple.
Sign In or Register to comment.