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Analysis: Now is the time to buy Apple stock - Page 4

post #121 of 152
Quote:
Originally Posted by benjaminm3 View Post


Its called risk/reward, and he judged the risk/reward to not be in his favor at 400 and 360.  Common sense.

Then he judged poorly. Maybe loading his on apple stock at higher price is providing an extra incentive for buy advice now. 

post #122 of 152
Quote:
Originally Posted by island hermit View Post

Hmmm... all that fundamental analysis and it sounds to me like it all comes down to guessing.

That's a vast over-simplification but not entirely untrue.
post #123 of 152
Quote:
Originally Posted by island hermit View Post

Hmmm... all that fundamental analysis and it sounds to me like it all comes down to guessing.

That depends on whether you're talking to someone who knows what he's talking about or someone who's making things up.

The fact is that current value for a stock is defined as the selling price. There is an assumption that the market works - and the price reflects the current value.

Trying to determine future values involves predictions. The better your knowledge the less you have to guess.

Don't listen to tmhisey - he clearly confuses "value" with "what I think it might be worth". He's wrong.
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post #124 of 152
Quote:
Originally Posted by jragosta View Post

You might want to revisit the concept of 'value is what someone will pay for something'. That's certainly true when it comes to stock prices.
Let's say Widget Co is trading at $100 per share. If the value is really greater than $100 per share, people will buy it at $100, driving the price up. If the value is lower, they will sell, driving the price down. The entire principle of the stock market is that the value is determined by the collective evaluation of millions of potential investors who have to choose between many thousands of stocks.
"Future value" is a misnomer. No one knows the future value of anything. One can only guess what the value will be on a certain day.
Or, specifically:
http://www.ehow.com/facts_7154148_stock-market-value-definition.html
"Stock market value is the price at which a stock can be bought or sold at a stock exchange. It reflects the market's expectation regarding the value of a stock. Combined market values of leading individual stocks are used to produce the market index, which tells investors the overall market value."

I give up. You obviously have not taken a look at any of the links that I've given or read with any understanding what I've posted previously. You quite obviously fail to understand that I'm trying to help you so that you have a better knowledge base. The quote from ehow.com isn't a counterpoint to anything that I've previously written -- it's exactly what I'm trying to help you better understand so that you have the baseline knowledge to gauge the reliability of something written on a website like ehow.com (no aspersions on either the website or the author of the article you linked given that I only read the quote you included -- but for some reason I feel comfortable that there weren't any well known investors or winners of the Nobel Prize in economics involved in the content.)

Seeing as how I have no vested interest in whether or not you persist in your ignorance and since I'm sure you're not going to be paying me tuition to keep schooling you, please feel free to remain comfortably ensconced in your alternative universe of ignorance and obfuscation.

If you had the actual knowledge to participate in an actual discussion, then that might have been entertaining, seeing you repeat what you picked up from a 2am info-mercial is not.

You obviously have never come anywhere near: a finance class, a book by a renowned economist, any accounting literature, reasoned analysis, a quant with a PhD in mathematics, physics, or statistics, an actual trading floor where the big boys are moving billions of dollars in a day, a pro forma cash flow model, an investment banker, a commercial banker, a debt analyst, an equity analyst, a Monte Carlo model, etc.

[Full disclosure: my own career experience incudes vaguely relevant things like helping a Top 5 investment bank develop its trading strategy for entry into a new commodity market.]

Stick to what you learn online at ehow.com and in investing classes down at the local library. I'm glad to know that you're out there in "the market" somewhere -- after all the market wouldn't be complete without the greater fool participating.

Thanks though, I was somewhat entertained for a while in posting this on a slow day working from home with an excruciating headache.
post #125 of 152
Quote:
Originally Posted by jragosta View Post


That depends on whether you're talking to someone who knows what he's talking about or someone who's making things up.
The fact is that current value for a stock is defined as the selling price. There is an assumption that the market works - and the price reflects the current value.
Trying to determine future values involves predictions. The better your knowledge the less you have to guess.
Don't listen to tmhisey - he clearly confuses "value" with "what I think it might be worth". He's wrong.

 

Actually, I based my assessment about guessing on the fact that 2 well known market gurus came to 2 different conclusions almost simultaneously about Apple's valuation.

 

I realize that a lot of analysis, human and computer, goes into these assessments but when it all comes down to it I think that some of these guys go on a gut feeling, a belief... can Cook run the show, can Ive come up with another great design, can Apple's team stay cohesive etc. etc.

 

The human factor must never be forgotten.

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post #126 of 152
Quote:
Originally Posted by jasenj1 View Post

I hope not. There's a fine balance between releasing updates frequently enough that people upgrade and keep your revenue stream going, and updating too quickly so that people put off upgrading because they know a new one is just around the corner, or that if they do upgrade a new one will be out soon so why bother?

 

You apparently haven't talked to any iPhone4 or 3GS owners in the past 3 months.  I'm hearing, literally daily (as it's my business to talk to people about technology), about how someone doesn't want to buy a new phone to replace their 3GS now because they "heard" the new iPhone is about to come out.  It's MAY.  I tell them look, a new iPhone is always on the horizon, you just buy what you need when you need it.


But the general public already puts off buying a phone because of the predictable release schedule.

post #127 of 152
Quote:
Originally Posted by cameronj View Post

You apparently haven't talked to any iPhone4 or 3GS owners in the past 3 months.  I'm hearing, literally daily (as it's my business to talk to people about technology), about how someone doesn't want to buy a new phone to replace their 3GS now because they "heard" the new iPhone is about to come out.  It's MAY.  I tell them look, a new iPhone is always on the horizon, you just buy what you need when you need it.


But the general public already puts off buying a phone because of the predictable release schedule.

 

On the other hand I have anecdotal evidence that says many people don't care about release schedules. I know a few people that went ahead with purchases of both iPads and iPhones even though I and a few others mentioned that new models were only a month away.

 

... but, yes, that last quarter before a release can be a bitch for Apple.

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post #128 of 152
Quote:
Originally Posted by island hermit View Post

 

On the other hand I have anecdotal evidence that says many people don't care about release schedules. I know a few people that went ahead with purchases of both iPads and iPhones even though I and a few others mentioned that new models were only a month away.

 

... but, yes, that last quarter before a release can be a bitch for Apple.

Nobody denies that people still buy the stuff as it ages.  The quarterly reports make that clear.  A "plunge" in sales generally means they fall like 5% instead of rising 20%.  But 12 months (or 15) it just too long in the cell phone game right now to have a flagship phone on the market.  

 

Now, if Apple could sell China Mobile a 4S in July of this year, all problems will go away (for this year), but eventually Apple will run out of new markets to burst into to goose sales.  They're pretty much at that point right now, frankly, except for that whale.  About 2 years ago my investment outlook for Apple was extremely positive based on the new market gains which have now happened and are nearly complete.  Once they hit China mobile (and yeah, you can expect it'll get a phone at least 6 months after that phone is new) there will be no more, and Apple will really have to pick up the release schedule.

post #129 of 152
Quote:
Originally Posted by jragosta View Post

That depends on whether you're talking to someone who knows what he's talking about or someone who's making things up.
The fact is that current value for a stock is defined as the selling price. There is an assumption that the market works - and the price reflects the current value.
Trying to determine future values involves predictions. The better your knowledge the less you have to guess.
Don't listen to tmhisey - he clearly confuses "value" with "what I think it might be worth". He's wrong.


LOL, and to think I just hung up my keyboard for the day, so to speak.

I am absolutely right in what I've said. But as I said elsewhere, whether or not you're capable of grasping the facts, nuances, implications, and interpretations is of little interest to me.


But I'm going to put this in very simple terms. Small words. No sudden movements.


Value is what I think something, a publicly held company for example, is worth.

Price is the amount at which I am willing to transact to buy or sell based upon how I value the good being bought or sold.


Let's role play for a second. I think therapists and grade school teachers use it as a teaching tool.

You be company A and I'll be company B. Like that? You even get to be A!

We are both interested in buying company C.


Your company is in the number 1 or number 2 market position with three different product lines. However, your IP holdings are relatively weak.

My company is much smaller, competes with you in only two of those product lines, but is interested in greatly expanding its market share to be a strong competitor in that third space. My company holds a significant number of key patents but simply has been much less successful in turning those patents into sales.

(I even made your company more successful than mine!!)

Company C is the leading producer of Bulgarian Oyster Processors used at Oyster Farms throughout Bulgaria and the rest of the world. They have been in the business of processing oysters and manufacturing and distributing oyster processing equipment for 100 hundred years. Their X1000 Nimbus Oyster Cracker is the envy of the industry and on the wishlist of every oyster farmer. They have innovated in countless ways and have patented every single one of those innovations.


Because of your strong market position, you don't place as much value in Company C's products; however, you are desperately in need of IP to be better armed in the endless patent litigation roiling the entire oyster industry. Based upon combining the products of Companies A and C, the value of their patents, the goodwill from their brand name, and the strength of their operations -- offset by the likelihood that you will stop production of two or more of the product lines that you'll be acquiring due to low margins and high capital requirements -- you place a value of $50MM on the business. (Sorry, FYI, MM is typical banker shorthand for millions. If you write M, that means thousands). Given their current share price, your desire to close the deal quickly (and the intrinsic value that you place on that speed), and other factors, you determine that the price you are willing to pay is $36/share, which compares to the most recent market close price of $28/share.

(Since I'm just making up those prices, I don't really want to back into the current market cap of Company C but you should be able to infer that your offer price of $36/share, which values the company at $50MM, is greater than whatever the market cap would be at $28/share. But I just did it and, at $28/share, the market cap is approximately $38.9MM.)

If the market, the invisible hand, the wisdom of the masses, etc. in their infinite, collective wisdom as they lead the market price of Company C along its random walk, are absolutely, constantly, omnipotently and omnisciently correctly valuing the company with a $38.9MM market cap at $28/share -- then just how insane must you be to offer a price of $36/share. The answer is: not insane at all if a price of $36/share provides the expected value to your company..

By contrast, I don't place as much value on the patent holdings of Company C, however, my company is desperate to expand its sales, market share, product lines, etc. This is really a bet-the-farm type of acquisition for Company B. Based upon all information available to us, we value Company C at $60MM and, therefore, are willing to offer $43/share.

If the current market price of Company C is the one-and-only value of Company C, then how could it be possible that both your and my company would make offers to buy Company C at per share prices that are different but both signficantly higher than the current "market price"? It is because the value of Company C -- to either of us -- is greater than what is currently represented in the market price.


Price and value mean different things. That is why they are two different words. Some people sloppily and incorrectly might interchange them but that does not make them correct for doing so.

Are you getting this yet?


What value do you think a member of Greenpeace sees in a share of AAPL today? Perhaps a very small number. Perhaps zero. Perhaps even a negative number because of the environmental externalities that they might attempt to value and incorporate into an all-in valuaton of Apple.


This is similar to what happens in a commodity market like emissions rights. One company may not value the ability to emit so many tons of SO2 and will be willing to agree to a certain price to sell those emission rights to another company that does place a positive value on them. It is because they have different perceptions of value that they need to negotiate and agree upon a selling price.

Value is what you judge to be the total worth, benefit, positive contribution, or what have you, of something. Price is the level at which you are willing to exchange dollars (or another commodity) to acquire the object with that value.


Is this finally getting through to you? It's funny, at this point I don't remember the exact launching point for my original post -- other than to correct a lot of inaccuracies that I was seeing in this thread. But with respect to clarifying the uniqueness of value as contrasted with price, I hope that I've accomplished that.

If not, nothing will have changed in the world but at least at the end of the day, I'm still the one who knows what he's talking about...


Please be sure to click on the Random Walk link above. It's insightful.

Also, I hope that someone spotted the Oyster Cracker pun. I didn't even notice it until I re-read what I had written.
Edited by tmhisey - 5/18/12 at 4:12pm
post #130 of 152
Quote:
Originally Posted by tmhisey View Post

LOL, and to think I just hung up my keyboard for the day, so to speak.
I am absolutely right in what I've said. But as I said elsewhere, whether or not you're capable of grasping the facts, nuances, implications, and interpretations is of little interest to me.
But I'm going to put this in very simple terms. Small words. No sudden movements.
Value is what I think something, a publicly held company for example, is worth.
Price is the amount at which I am willing to transact to buy or sell based upon how I value the good being bought or sold.
Let's role play for a second. I think therapists and grade school teachers use it as a teaching tool..

You're not going to be any more right by typing 1000 words over and over. The fact that you're rambling and spending more time on your silly whining than on discussing the topic is proof that you don't know what you're talking about.

I already showed you the definition. For a publicly traded stock, the value is whatever the shares are going for on the market.

You may disagree, but the value is, BY DEFINITION, the share price.

But if you disagree, here's a simple test.

You insist that:
1. The share price is not the real value.
2. You have a way to determine the real value.

If those two statements are true, you should be a multi-trillionaire - and I'll bet that you're not.
Edited by jragosta - 5/18/12 at 8:17pm
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post #131 of 152
Quote:
They have been in the business of processing oysters and manufacturing and distributing oyster processing equipment for 100 hundred years

 

This is how I know you're a complete crackpot. 100 hundred years!? That's ten thousand years! No company has existed that long. Your opinion is useless and you are a fool!

 

Honestly, guys, can you tone it down a bit. Both of you are brilliant investors, I'm sure. Both of you have professional experience trading stocks and evaluating companies. Good for you. Mostly you seem to be talking past each other and using different words for different meanings - semantics. And probably just have some general differences of opinion in how the universe works. That doesn't make either of you stupid or wrong.

 

- Jasen.


Edited by jasenj1 - 5/19/12 at 4:07am
post #132 of 152
Quote:
Originally Posted by jasenj1 View Post

 

This is how I know you're a complete crackpot. 100 hundred years!? That's ten thousand years! No company has existed that long. Your opinion is useless and you are a fool!

 

Honestly, guys, can you tone it down a bit. Both of you are brilliant investors, I'm sure. Both of you have professional experience trading stocks and evaluating companies. Good for you. Mostly you seem to be talking past each other and using different words for different meanings - semantics. And probably just have some general differences of opinion in how the universe works. That doesn't make either of you stupid or wrong.

 

- Jasen.

Jragosta has professional experience in the finance industry?  In a role that produces values for companies?  Unthinkable.

post #133 of 152
Quote:
Originally Posted by jasenj1 View Post
This is how I know you're a complete crackpot. 100 hundred years!? That's ten thousand years! No company has existed that long. Your opinion is useless and you are a fool!

 

He makes one typo and apparently he's a fool and a crackpot?

Calm down, man. I agree with the rest of your post, though. 

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post #134 of 152

I was surprised to see AAPL fall through $550 down to the $525 range. I haven't read anything (credible) that suggests that AAPL will have a negative earnings surprise in the coming few quarters, so buying in this range wouldn't bother me. The only headwind that I can see is the one the overall market might be facing, in regard to the Eurozone situation. Even though there are those who claim that the worst case scenario is "priced in" to the market, I've seldom found that to be the case when there are macro economic shocks. And the "sell in May and go away" phenomenon has, so far, proven true again this year. But there is a certain amount of risk, no matter what you do.

 

All that to say: limit buy, day order on 5/21 for AAPL @ $519. If the market truly falls out of bed and takes AAPL with it, I generally place stop loss sells shortly after buying. And if it hovers, range bound, for months, I'll sell some calls and also pick up the dividend later this year. I see the risk in buying this company, at that level, as relatively limited. But we shall see...

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post #135 of 152
Quote:
Originally Posted by Tallest Skil View Post

 

He makes one typo and apparently he's a fool and a crackpot?

Calm down, man. I agree with the rest of your post, though. 

Hyperbole in the service of sarcasm is lost on the Internet. So sad.

 

- Jasen.

 

P.S. I bought one more share of AAPL on Friday.

post #136 of 152
Quote:
Originally Posted by Tallest Skil View Post

 

He makes one typo and apparently he's a fool and a crackpot?

Calm down, man. I agree with the rest of your post, though. 

That was a joke

post #137 of 152
Quote:
Originally Posted by huntercr View Post
They'll make a mistake ( like antenna gate ) and the market will overreact and punish.

 

Wow, that was some mistake!  You don't work for Consumers Reports, eh?

post #138 of 152
Quote:
Originally Posted by herbapou View Post

 

or set youre buy orders, sit back and miss it ...

 

If youre going for 500 at least place youre bids at 501 or 502 so you get filled before everyone else.

 

Oh, Herb... I did say "about $500" and I'm certainly not going to recommend exact levels or timing for anyone here. That's another fool's game. People should always do their own homework and be highly suspicious of "sure bets" coming from strangers on the Internet.


Edited by SpamSandwich - 5/19/12 at 5:46pm

Proud AAPL stock owner.

 

GOA

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GOA

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post #139 of 152
Quote:
Originally Posted by jasenj1 View Post

Hyperbole in the service of sarcasm is lost on the Internet. So sad.

 

- Jasen.

 

P.S. I bought one more share of AAPL on Friday.

 

Just one? That sounds like an interesting trade. ;)

Proud AAPL stock owner.

 

GOA

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GOA

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post #140 of 152
Quote:
Originally Posted by benjaminm3 View Post

Jragosta has professional experience in the finance industry?  In a role that produces values for companies?  Unthinkable.

Absolutely. By independent evaluation, I've produced tens of millions of dollars of value for several companies.
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post #141 of 152
Quote:
Originally Posted by SpamSandwich View Post

 

Just one? That sounds like an interesting trade. ;)

Meh. Easy with Fidelity. Fee per trade is $7.95. I only spend what I can afford to lose - and I have a recent history of losing, unfortunately.

post #142 of 152
Quote:
Originally Posted by jasenj1 View Post

Meh. Easy with Fidelity. Fee per trade is $7.95. I only spend what I can afford to lose - and I have a recent history of losing, unfortunately.


Nothing at all wrong with that way of thinking.

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post #143 of 152

I just wanted to post a thank you to the article author for getting me involved back into the market. Ten years ago I incorrectly concluded that the market couldn't go anywhere but up and I took my meager savings account of $5,000 dollars and invested into an IRA mutual fund. After about nine years of ignoring it because it wasn't even over the principal amount it finally grew by a pitiful couple hundred dollars. By contrast, if I had purchased apple then I would have been sitting on at a minimum of $90,000. If I had not been so disillusioned with the market I would have not ignored Apple even a few years ago nor would I have given my mother poor advice regarding Google when she asked me what I thought of it ("nah, only the insiders make money so even though it's going to grow it's not something I'd recommend worrying about").

 

In any case, the point is that I read this article and started thinking: if I'm going to be involved in investments why don't I have my money follow something I follow all the time anyway...technology and especially a strong company like Apple that I already believe in? I checked the prices and they were at 530. Unfortunately I didn't know how the market works and I didn't get around to calling my bank's financial advisor until a few minutes before 1pm PST on Friday. He told me to come in Monday morning.

 

I did, sold my mutual fund, and bought as many Apple shares as I could. Well, unfortunately the price had risen to $553 while we were discussing my plans and I could only purchase 9.

Then I took the remainder of my $350 dollars and invested in another company attached to these devices that I think is going to grow and am patiently waiting to see if I've done the right thing.

 

Anyway, just wanted to put it out there. Kinda in response to Jasen's comment that he only invests in what he can afford in that some of us have situations where a few hundred dollars can make a significant impact in our lives. In my case, I'll be graduating with my phd in criminology this summer at 37 after a fairly difficult and impoverished life, so it's a little embarrassing to have such a tiny investment portfolio but hopefully in the coming years (provided I am hired somewhere with a decent enough salary) this will just be water under the bridge.

 

 

Just posting for posterity in the event that the stock does rise to $750 or splits or any good thing that will make a fairly significant impact on my life and to say hello to the community.

post #144 of 152
Quote:
Originally Posted by bizzle View Post

I just wanted to post a thank you to the article author for getting me involved back into the market. Ten years ago I incorrectly concluded that the market couldn't go anywhere but up and I took my meager savings account of $5,000 dollars and invested into an IRA mutual fund. After about nine years of ignoring it because it wasn't even over the principal amount it finally grew by a pitiful couple hundred dollars. By contrast, if I had purchased apple then I would have been sitting on at a minimum of $90,000. If I had not been so disillusioned with the market I would have not ignored Apple even a few years ago nor would I have given my mother poor advice regarding Google when she asked me what I thought of it ("nah, only the insiders make money so even though it's going to grow it's not something I'd recommend worrying about").

 

In any case, the point is that I read this article and started thinking: if I'm going to be involved in investments why don't I have my money follow something I follow all the time anyway...technology and especially a strong company like Apple that I already believe in? I checked the prices and they were at 530. Unfortunately I didn't know how the market works and I didn't get around to calling my bank's financial advisor until a few minutes before 1pm PST on Friday. He told me to come in Monday morning.

 

I did, sold my mutual fund, and bought as many Apple shares as I could. Well, unfortunately the price had risen to $553 while we were discussing my plans and I could only purchase 9.

Then I took the remainder of my $350 dollars and invested in another company attached to these devices that I think is going to grow and am patiently waiting to see if I've done the right thing.

 

Anyway, just wanted to put it out there. Kinda in response to Jasen's comment that he only invests in what he can afford in that some of us have situations where a few hundred dollars can make a significant impact in our lives. In my case, I'll be graduating with my phd in criminology this summer at 37 after a fairly difficult and impoverished life, so it's a little embarrassing to have such a tiny investment portfolio but hopefully in the coming years (provided I am hired somewhere with a decent enough salary) this will just be water under the bridge.

 

 

Just posting for posterity in the event that the stock does rise to $750 or splits or any good thing that will make a fairly significant impact on my life and to say hello to the community.

 

Hello, and wise move investing in a great company with such solid fundamentals, not to mention a stock so undervalued, it's practically trading for its cash value 3-4 years from now, assuming even less than ideal growth. Being that you already are used to putting money aside and not paying attention to the day to day trader nonsense, check back in a couple of years and by allowing Apple's finest to work for you, you should see a nice surprise.

post #145 of 152
Quote:
Originally Posted by Godzilla View Post

 

Hello, and wise move investing in a great company with such solid fundamentals, not to mention a stock so undervalued, it's practically trading for its cash value 3-4 years from now, assuming even less than ideal growth. Being that you already are used to putting money aside and not paying attention to the day to day trader nonsense, check back in a couple of years and by allowing Apple's finest to work for you, you should see a nice surprise.

Yikes.  Don't check in "in a couple years."  There's a lot of money at stake here, and nobody can see the future.  Keep a close eye on the company who you trust with your investments!  No company lasts forever!

 

Disclosure: Long Apple

post #146 of 152

Of course, lol. I just was using that as an example as he said he hadn't checked his 401K in a couple of years. 

post #147 of 152
Quote:
Originally Posted by Godzilla View Post

Of course, lol. I just was using that as an example as he said he hadn't checked his 401K in a couple of years. 

Not checking in on a mutual fund is a hell of a lot less risky than not checking in on a single stock that gets its profits in large part based on style, which can change in a blink.

 

Best advice?  Don't take anyone's advice who you can only read as text on the internet. Do your own research and figure out why Apple is a good investment FOR YOUR GOALS and some other company isn't.  No one will disagree that Apple at $100 was a great investment in hindsight, but at $500 there is a lot less room for growth (by definition) than there was 3 years ago.  There are going to be MANY other stocks that gain more in the next 3 years than Apple does, the hard part is finding them.

post #148 of 152

Thanks for the opinions.

 

My takeaway from the whole thing has been the fact that this site, the information I read on it, and my own personal interests that led me to read about these kinds of information every day already can be intertwined into creating a portfolio that I can manage myself rather than having someone I don't know manage my investment in things I don't know about. Overall I became disillusioned with the market and disconnected with my money, which is a sad state of affairs when I think that and what it could have meant going forward.

 

In some sense, the money was already lost to me so whether Apple performs as well as this article suggests it might is secondary to the larger gain I already have experienced--becoming more agentic within this market structure. There's a certain level of personal enrichment and feeling of ownership when I can research things that I enjoy reading and learning about and then compiling some companies that interest me and asking my financial advisor what he thinks of them...and then using my own knowledge buttressed with his expertise and finalizing my investment choices.

 

I think I've written this correctly.

 

That said, of course it's exciting and bonus that I've already made about as much in less than a week than I did the last decade. And equally saddening that I didn't know enough of how the market works to call in at a time where I could have bought in at a more advantageous time. Had that been the case I would have made triple the gains already. But that's why I wrote that even a hundred or two hundred dollars actually impacted me more than one might realize due to my particular economic situation. At this point, the gains are real but also just as or moreso they're also symbolic.

post #149 of 152
Quote:
Originally Posted by cameronj View Post

Not checking in on a mutual fund is a hell of a lot less risky than not checking in on a single stock that gets its profits in large part based on style, which can change in a blink.

 

Best advice?  Don't take anyone's advice who you can only read as text on the internet. Do your own research and figure out why Apple is a good investment FOR YOUR GOALS and some other company isn't.  No one will disagree that Apple at $100 was a great investment in hindsight, but at $500 there is a lot less room for growth (by definition) than there was 3 years ago.  There are going to be MANY other stocks that gain more in the next 3 years than Apple does, the hard part is finding them.

You must not remember how Wall Street has treated AAPL correctly. There has been "not enough room for continued growth/topped out" since well before it passed $100.... the same was said at $200.... then $300.... then $400.... and will be said by those naysayers all the way up to $1,000 and beyond, until one day, they may finally get their "aha!" moment.... all the while the "Bulls" have "aha'd!" constantly.


Apple has actually grown more this year than it has in the past, WHILE its market cap has soared. The stock is already priced for little growth, at a Forward P/E of under 9, and less minus cash. One thing people don't realize is in the long term, all AAPL can do is surprise on the upside, as the downside is already technically priced in and assumed (as it always has been).


IMO, the Facebook fiasco will help get AAPL to a higher valuation, as people start to focus on valuation, and Apple gets more people seeing it as what it is: A solid, fundamentally sound, reliable company with a bomb shelter of reserves built in, in the case that they need to engage in a code red situation.

post #150 of 152

Apologies for posting off topic but I've been searching for the forum for the past few hours and I can't find a comparison or recommendation for OSX analyst software.

 

Would someone please either PM or post recommendations and/or links to relevant discussions?

post #151 of 152
Quote:
Originally Posted by Godzilla View Post

You must not remember how Wall Street has treated AAPL correctly. There has been "not enough room for continued growth/topped out" since well before it passed $100.... the same was said at $200.... then $300.... then $400.... and will be said by those naysayers all the way up to $1,000 and beyond, until one day, they may finally get their "aha!" moment.... all the while the "Bulls" have "aha'd!" constantly.


Apple has actually grown more this year than it has in the past, WHILE its market cap has soared. The stock is already priced for little growth, at a Forward P/E of under 9, and less minus cash. One thing people don't realize is in the long term, all AAPL can do is surprise on the upside, as the downside is already technically priced in and assumed (as it always has been).


IMO, the Facebook fiasco will help get AAPL to a higher valuation, as people start to focus on valuation, and Apple gets more people seeing it as what it is: A solid, fundamentally sound, reliable company with a bomb shelter of reserves built in, in the case that they need to engage in a code red situation.

I've been there, I've owned the stock for essentially the whole time from 86 to current.  You're looking at it wrong though - it's not that the "naysayers" will eventually get lucky and be right.  The stock goes up and up and up until eventually it's fairly valued.  At that point I wouldn't want to be the one being told by a stranger on the internet to sink all my life savings into it.  Apple won't be a 10 trillion dollar company.  At some point between now and 2050 it will hit a wall, go out of fashion, see a brain drain as all the executives retire with their billion in savings, etc.  No company lasts forever.  Apple is not immune to the laws of business.

 

Apple's reserves will do it NO good as far a stock.  Can you imagine?  Apple starts losing money?  Do you think anyone is going to say "oh gee that's OK because it's just spending down cash instead of having to sell off assets".,  No, the cash is not a support for the stock in any way, unless you are looking for protection from 100% decline.  The first 80% will be quick, if Apple starts burning its cash.

 

I think it's foolish, after seeing Apple live in the PE range of 10-20 for the past 5 years, to suggest that that's going to change.  So you have to bank on earnings growth for price growth.  Right now that looks rosey, but it won't last forever.

 

Disclosure: Long Apple (but not with my eyes closed)

post #152 of 152

WWDC is next week. AAPL has a reputation of going down right after announcements but then skyrocketing when a few days after. Buy now if you're going to buy. 

 

 


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Tim Cook using Galaxy Tabs as frisbees

 

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