Apple's surging valuation distorting stock market indexes

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  • freshmakerfreshmaker Posts: 446member
    Quote:
    Originally Posted by Sacto Joe View Post


    Good timing, too! Looks like Apple stock is starting its "consolidation" phase. It's down below $500 right now. I've been "all in" for a year and a half now, and no regrets.



    Oh yeah, you are sitting quite pretty! That's awesome.



    I had to sell my shares last year at $360/per so I could put a downpayment on my house. Ugh.
  • oldmacguyoldmacguy Posts: 151member
    Quote:
    Originally Posted by Freshmaker View Post


    Oh yeah, you are sitting quite pretty! That's awesome.



    I had to sell my shares last year at $360/per so I could put a downpayment on my house. Ugh.



    That's about where I bought it (338)
  • freshmakerfreshmaker Posts: 446member
    Quote:
    Originally Posted by OldMacGuy View Post


    That's about where I bought it (338)



    Wow...so you're at like a 47% profit so far. Saweet!
  • commoncentscommoncents Posts: 68member
    Quote:
    Originally Posted by GTR View Post


    You are all brave men. I admire you.



    I would do the same, as I have 100% faith in Apple.



    Unfortunately, I have even more faith in America's inability to pay it's debts in the near future and, if they end up defaulting, like they probably will, it ain't gonna pretty what will happen to stock markets all around the world.



    That's when I plan to buy in.



    For those of you interested, check out www.usdebtclock.org



    (The U. S. debt went up eight million dollars in the time it took me to type this post)



    While I agree with you completely that the U.S. is simply not able to meet it's financial obligations, I disagree completely with your strategy.



    The way governments with fiat money tied to nothing real always handle this is to rev up the printing presses. While holding interest rates at zero. So the value of your cash is slipping through your hands like sand.



    Much better to own a fraction of an outstanding business which earns its profits across a very broad range of currencies, and will at least partially mitigate the plummeting value of the dollar (note, it is falling...regardless of it's relative standing against other currencies in the same mess).
  • aaadktdaaaadktda Posts: 5member
    Quote:
    Originally Posted by Sacto Joe View Post


    Good timing, too! Looks like Apple stock is starting its "consolidation" phase. It's down below $500 right now. I've been "all in" for a year and a half now, and no regrets.



    I've been "all in" for a few years and the stock split 2 for 1 twice since I bought it (Apple doesn't anymore.) If they had not done those splits the stock would now be trading at around $2000 a share.
  • apple ][apple ][ Posts: 8,057
    Quote:
    Originally Posted by aaadktda View Post


    (Apple doesn't anymore.)



    Has Apple stated that they won't do it anymore, or have they just not done it in a long time?



    For purely psychological and personal reasons, I'd love to see a 10:1 split, and then somebody like me could feel a whole lot better about owning more shares of AAPL. Even if the value were the same, 200 shares sounds a bit more impressive than a meager 20 shares, for example.
  • ltmpltmp Posts: 204member
    Quote:
    Originally Posted by anantksundaram View Post


    This is will be Apple]['s life only if he's interested in losing his money sooner than later, wasting his time in the process, as a day-trader.



    My suggestion for Apple][ (congrats, btw): Buy, hold, forget about it. Take the long view. You'll likely be wealthier (and saner).



    That's primarily my view as well, but I like to play the ups and downs a little bit.



    I bought a few hundred shares two years ago at $198 (I think it was Feb 11). I decided to try hedging a bit when it hit the highs by selling off a bit (30 to 60%), then buying with the proceeds when it hit the lows.



    By doing this over the last two years, I've added an extra 80 shares to my AAPL holdings.



    Today I thought I'd get a bit braver, and jump back in quickly. I still managed to add an extra 5 shares (at a cost of $250 extra), but anytime I think I've timed things perfectly... I should know better.
  • cy_starkmancy_starkman Posts: 488member
    Quote:
    Originally Posted by anantksundaram View Post


    But also stupid. 'Stripping away' one company will also strip away component makers, makers of plastics/rubber/metal, retailers, distribution and logistics firms, producers of collateral gear, music companies, advertising agencies, etc. In other words, an entire web of production interdependencies in the real economy.



    Indeed, stripping away a company like GM, with one-tenth of Apple's market cap, will take a much smaller bite out of the index, but a much bigger slice of the real economy.



    In other words, an entirely bogus analysis meant for breathless, shallow media consumption.



    Yeah but most of the companies that make the stuff or do the stuff you mention do not form a part of the American economy. Is there one bit of the hardware in an apple product that's made or even extracted from the ground by an American company?
  • apple ][apple ][ Posts: 8,057
    Quote:
    Originally Posted by LTMP View Post


    By doing this over the last two years, I've added an extra 80 shares to my AAPL holdings.



    That's pretty good I'd say. 80 x $500 is nothing to sneeze at.
  • dh87dh87 Posts: 72member
    Quote:
    Originally Posted by Sevenfeet View Post


    This has been discussed in some financial circles when the question is posed "Why isn't Apple in the Dow Jones Industrial Average", in other words the top 30 stocks traded. Apple certainly falls into that category as the world's most valuable company. The problem is that Apple's growth has been so ridiculously out of what is normal for a big cap stock that apparently there wasn't a way to add Apple to the index and keep from radically distorting it. In other words, Apple's success isn't the same as all the other companies...its moving much faster than the rest of the economy and it would seem like the Dow was far better than the rest of the economy.



    This isn't correct. The reason that AAPL can't be added to the Dow is that the Dow is a simple sum of prices of the 30 stocks, not a weighted average. Apple's share price is so high that it can't be substituted for an existing Dow stock without raising the average by several hundred points and then having an overweighted influence on the average going forward.
  • godzillagodzilla Posts: 156member
    Quote:
    Originally Posted by anantksundaram View Post


    This is will be Apple]['s life only if he's interested in losing his money sooner than later, wasting his time in the process, as a day-trader.



    My suggestion for Apple][ (congrats, btw): Buy, hold, forget about it. Take the long view. You'll likely be wealthier (and saner).



    I agree. Apple can be considered a "Luxury" in the sense that the fundamentals are so in line, that you can worry "less" than with other Stocks, as even if it does get manipulated into a downward spiral, it always spurts up tenfold. I've tried Day Trading it, or beating myself up for "not trading it today", and it's a losing game. Best is to just go Long, IMO, mostly for sanity (unless you can handle it), and buy more when those precious buying opportunities may show up.



    Welcome to the Club, Apple ][, glad to have you aboard. $700 is the new $500, and I still think AAPL is the best, most solid Stock with the best growth potential right now. I think that if it doesn't hit $600 this year, it would be considered an upset (but all signs point to it happening).



    With such a solid floor of cash, possibilities of what to do with that cash, Tim Cook making people "feel comfortable" after fronting the company through it's most incredible earnings periods, Ipad 3, iTV, who knows what else, and iPhone 5 coming this year, and still a measly P/E of 14 (incredibly undervalued Stock), 2012 should hopefully be a great year (continue to be a great year), of course, "outside circumstances" are another story, but they always pass.
  • jasonfjjasonfj Posts: 525member
    Can someone explain the tax implications of selling and buying back stock on a short term basis?



    If was to sell say 100 AAPL today at a profit, then buying 105 back a few days later using all the profits, am I still liable to pay tax on those profits?
  • godzillagodzilla Posts: 156member
    Yep. You need to hold it for a year or more to get the "Tax Discount" rate. Otherwise you just factor your profits into your regular "Wage Gains", per-se.
  • jasonfjjasonfj Posts: 525member
    Quote:
    Originally Posted by Godzilla View Post


    Yep. You need to hold it for a year or more to get the "Tax Discount" rate. Otherwise you just factor your profits into your regular "Wage Gains", per-se.



    I'm still a little confused.



    By reinvesting the profits, are they not removed from taxable income?



    Also, I've been accruing AAPL for a few years now. What determines whether the shares I sell are those I purchased in 2005 or those I purchased last week?
  • godzillagodzilla Posts: 156member
    Actually, I JUST asked my friend your latter question today! Lol. I have no idea how that works. He says his Bank allows an Option that tells you "which Shares (purchased when) do you want to Sell"? Mine doesn't ask that. I figure you have to call your Bank to figure that out.



    Even if you reinvest it, you still have to pay the Taxes on your gains (they essentially will get jumbled into your total gains, from work, etc., when you do your Taxes). What I learned (unfortunately) is that the IRS gets to see ALL the money you use to purchase (TOTAL) during the year. If you day trade the same $10K every day (say, to buy 100 Shares of a $100 Stock, and sell it to make just a couple of hundred), you'll see an exuberant of money "spent on Stocks", which will be significantly higher than the $10K you've used to get there.... when you may not have anything near that accumulated total.
  • haarhaar Posts: 503member
    Quote:
    Originally Posted by jasonfj View Post


    I'm still a little confused.



    By reinvesting the profits, are they not removed from taxable income?



    Also, I've been accruing AAPL for a few years now. What determines whether the shares I sell are those I purchased in 2005 or those I purchased last week?



    one. good questions... the exact questions a CA (chartered account) or tax lawyer could answer



    two. Paper trail.
  • ltmpltmp Posts: 204member
    Quote:
    Originally Posted by Apple ][ View Post


    That's pretty good I'd say. 80 x $500 is nothing to sneeze at.



    As soon as I bought AAPL, it started going through these cycles where it would go up 10%, then drop 9% (give or take a few percent), then jump up prior to the earnings calls. This, to me, seemed to be part and parcel with the compression going on with its P/E ratio.



    I think the days of large swings might be drawing to a close, but I think the strategy is a good, and safe, one for anybody holding Apple long.



    When its had a big run up, sell off a portion of your holdings. There will almost always be a chance to buy back in at a lower price.



    If the drop is cataclysmic, you have locked in some of your profit, so that you can buy back in when it starts to climb again, and if not, you can still get a small gain.



    At worst, you miss out on the chance to make even more money.



    What happened to me yesterday is a great example. Even the the overall value of my holdings has dropped a lot, I still added 5 shares.



    And they will surely be worth much more than they are right now.
  • palominepalomine Posts: 324member
    Quote:
    Originally Posted by jasonfj View Post


    I'm still a little confused.



    By reinvesting the profits, are they not removed from taxable income?



    Also, I've been accruing AAPL for a few years now. What determines whether the shares I sell are those I purchased in 2005 or those I purchased last week?



    Delete post
  • qwertyjuanqwertyjuan Posts: 107member
    Overinflated stock! Nice!
  • tallest skiltallest skil Posts: 40,277member
    Quote:
    Originally Posted by QwertyJuan View Post


    Overinflated stock! Nice!



    Check the P/E. Then yourself before, as someone once said, you wreck yourself.
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