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Apple's largest active shareholder cuts stake by 10% - Page 2

post #41 of 95
Originally Posted by SCProfessor View Post

Speaking of uncertainty, I wish I could find this report written by some tech Ph.D guru that said in the next 4 years everything with an IMEI from phones to smart refrigerators to cars would have to be replaced. And I can't remember the exact reason why. It was a very technical article that came out about 7 months ago or so.

 

Was his reasoning along the lines of the same sort of problem we've run into with IPv4? I've not heard the same about IMEI, myself.

Originally posted by Marvin

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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #42 of 95
These funds are attempting to devalue Apple so they can drive leverage on the board to make some changes that benefit hedge fund managers and more. It' won't work.
post #43 of 95
Quote:
Originally Posted by anantksundaram View Post

$250B in wealth wiped out in less than a year -- is this the largest in known history for any corporation (including perhaps the East India Companies)? -- and not a peep from management.

How long did it take to gain that?

Jan 20th 2012, $420
September 21st 2012, $700

9 months

How long did it take to come back down?
April 1st, 2013, $428

7 months

Largest known gain, largest known loss (all while Tim was CEO).
Quote:
Originally Posted by MJ Web 
I knew Steve Jobs... Tim Cook is no Steve Jobs!

Statements like these seem to imply that someone else besides Steve is in fact another Steve Jobs. Who might that be? Zuckerberg? Bezos? Larry Page? Marissa Mayer?
Quote:
Originally Posted by mdriftmeyer 
These funds are attempting to devalue Apple so they can drive leverage on the board to make some changes that benefit hedge fund managers and more.

It's definitely suspect. The suggestions are always to release more and cheaper products (which obviously lowers margins) but it probably struck people that even at the current value, Apple is valued more highly than any other company so it was a missed opportunity if people didn't sell high. Some want it to go high again so they can sell at the high price (now that they know the peak), others want a payout from the cash pile. Either way, it has nothing to do with the health of the company but it's presented that way.

I think it will level out around $450-500. Apple can't get into a better position than they are in.

It doesn't make sense to do a massive buyout to go private because that's just wasting a lot of money and most of it is overseas. They don't need to go private either. That would just be to quieten things down and they can ignore the noise quite easily. The money would be better spent on companies and services that secure future revenue streams. It's easy to make the assumption that the people working there are not competent enough when something appears to be going wrong but they only sell a handful of products and they are making more money than anyone and managing tens of billions of dollars every quarter. I'd say they know what they're doing.

The shareholder suggestions that keep coming forward are suggestions that benefit shareholders at the expense of the company e.g boosting stock price while lowering margins or reducing the cash pile and there's no justification for that. The people at Apple have a duty to maintain the health of the company and they are doing that extremely well.
post #44 of 95
Quote:
Originally Posted by Rogifan View Post

If I was an employee, especially one who received stock as part of my compensation, not sure how my morale would be seeing the stock near its 52 week low.

 

 

 

Screw the employees, they get their stock for real cheap. What about the people who pay full price for it?

post #45 of 95
I would go private myself so to keep em all in-house.
post #46 of 95
Quote:
Originally Posted by Marvin View Post

Statements like these seem to imply that someone else besides Steve is in fact another Steve Jobs.

 

Didn't imply that to me at all.

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post #47 of 95
Quote:
Originally Posted by igriv View Post

When we are talking about this amount of money, you cannot explain things by emotion. Many quite smart people are paid full-time to follow Apple. Apple's management is failing to manage shareholder value (this is not an opinion, but a fact: in the last year the market is up 30%, Apple's stock is flat -- this is a disastrous destruction of value).

Except for one simple thing. It's not Cook's job to manage shareholder value. It's Cook's job to run the company so that it continues to grow. So far, he has done a commendable job of doing that - in spite of all the whining from people like you.
Quote:
Originally Posted by igriv View Post

Unless and until Apple explains what the point of keeping $150BN in the bank is, the last paragraph is senseless, and in fact, the management has publicly admitted that they have way too much money in the bank. 

Apple has said that they're considering what to do with the money. That is different than 'publicly admitting that they have too much'.

Simply handing it out left and right is probably the stupidest thing they can do with it.
Quote:
Originally Posted by quinney View Post

Fidelity sold 1.13 million shares in the period from January through February. That is just one institution for only a two month period. If we assume they received about $450 per share on average, that amounts to $508.5 million. What split do you envision which would entice enough individuals to replace
that size of institutional investment, let alone all the other institutional investments? Or never mind replacing it. How many investors at what price would
even make a dent? If you are going to continue promoting a split as helping AAPL's price, you should provide some numbers explaining why.

No one ever claimed that it would be a 1 for 1 replacement for Fidelity, so please stop making stupid straw man arguments.

I believe it would help (and most people who study the market would agree). I never said how much it would help. It might make up for 10% of what Fidelity sold or it might be 5 times what Fidelity sold. But it is clear that it would help. It would bring some people into the market who do not currently buy Apple stock. That would apply upward pressure to the price. I don't think there's anyone who could predict how much, but it would help.
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post #48 of 95
Originally Posted by igriv View Post
How are those aliens beaming radio waves at you doing?

 

No, that sounds exactly like something a corporate shareholder would do… 

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #49 of 95
Quote:
Originally Posted by igriv View Post

4. The split idea would (a) do nothing and (b) would be an admission of weakness. Notice that Apple's tech brethren GOOG and AMZN have been going onward and upward without any such machinations.

 I think there's a ton of FUD driving the stock price down, and once you become a "hated" stock it doesn't take much to trigger a sell off.  I'd like to see Apple do more to change this narrative.  Maybe Cook and team have something up their sleeves and we'll all be blown away later this year.  I hope so. 

post #50 of 95
Originally Posted by igriv View Post
Is that what Kim Jong Un is telling you guys?

 

What in the world is your problem? Either write actual rebuttals or don't expect your posts to stay up, much less you be taken seriously ever again in the future.


Originally Posted by igriv View Post
1. It IS Cook's job to manage shareholder value. It is his ONLY job.

 

And right off the bat, wrong.


2. Saying "they are considering what to do with the money" does say that they are aware there is a problem

 

No, nowhere in that does it state or imply anything about a "problem".


3. Handing it out is far from stupid. The Einhorn proposal or a buyback might be more intelligent, that's true, but it does not mean that upping the dividend is stupid.

 

"Handing it out" "upping the dividend". Note the character I used before writing your reply. That way you'll know exactly how far to move the goalposts.


…AMZN have been going onward and upward without any such machinations.

 

Also without any such profits.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #51 of 95
Quote:
Originally Posted by Tallest Skil View Post

 

What in the world is your problem? Either write actual rebuttals or don't expect your posts to stay up, much less you be taken seriously ever again in the future.

 

There are people on this forum that we take seriously?  1confused.gif

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post #52 of 95
Quote:
Originally Posted by Rogifan View Post

 I think there's a ton of FUD driving the stock price down, and once you become a "hated" stock it doesn't take much to trigger a sell off.  I'd like to see Apple do more to change this narrative.  Maybe Cook and team have something up their sleeves and we'll all be blown away later this year.  I hope so. 

 

I thought Cook would unveil a plan in the last quarter but here we are starting the next one.

 

For me that doesn't matter... at the moment... I gave it until the end of the year for Cook to prove his worth to me. If he doesn't then I think we can expect the stock to drop into the low 300s. April 23rd will tell us if AAPL will head to the high 300s or the low 500s.

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post #53 of 95
Originally Posted by igriv View Post
Second paragraph: Repeat after me: "I disagree with your assessment". If you keep writing garbage as fact,  don't expect your posts to stay up, much less you be taken seriously ever again in the future.

 

You claimed a CEO has no responsibility but to his shareholders. That's so utterly vacuous that if it needs clarification on why it's wrong you shouldn't be talking about this stuff in the first place.


Third paragraph: Whatever. I guess having most of the people paying your salary up in arms does not count as a problem.

 

Are you honestly implying that shareholders "pay the salaries" of Apple employees? Not, you know, their ludicrous sales and revenues? The part of the company that actually matters, that is. The part that is an actual company. 


Fourth paragraph: WTF are you talking about?

 

Fine. Don't do the work. It's called "not identical to".


Fifth: Yes, exactly. That's how much people distrust Apple management. Apparently they trust Larry Page a lot more, and Jeff Bezos a lot more still.

 

So… a company that consistently brings in billions in profits and which is constantly growing its platform is "trusted less" than a company that is posting losses and which has a bunch of loose ends? Sure it is¡


I bet the dog had a tendency to eat your homework way back in the day.

 

What does this even mean within the context of anything relevant?

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #54 of 95
Quote:
Originally Posted by jragosta View Post

Quote:
Originally Posted by quinney View Post

Fidelity sold 1.13 million shares in the period from January through February. That is just one institution for only a two month period. If we assume they received about $450 per share on average, that amounts to $508.5 million. What split do you envision which would entice enough individuals to replace
that size of institutional investment, let alone all the other institutional investments? Or never mind replacing it. How many investors at what price would
even make a dent? If you are going to continue promoting a split as helping AAPL's price, you should provide some numbers explaining why.

No one ever claimed that it would be a 1 for 1 replacement for Fidelity, so please stop making stupid straw man arguments.

I believe it would help (and most people who study the market would agree). I never said how much it would help. It might make up for 10% of what Fidelity sold or it might be 5 times what Fidelity sold. But it is clear that it would help. It would bring some people into the market who do not currently buy Apple stock. That would apply upward pressure to the price. I don't think there's anyone who could predict how much, but it would help.

You have stated that you believe it would be beneficial for the performance of AAPL if the proportion of stock owned by individuals was increased relative to the proportion owned by institutions. If you don't replace the institutionally owned shares with individual investor owned shares by at least one to one, how are you going to change the relative proportions? I was really asking you to justify your own argument more than making a new one of my own. Call it a straw man if you want, as long as you take ownership.

While we are making citation-free assertions, I would posit that most people who study markets believe stock splits don't accomplish anything.

I fully recognize that you have not said how much a split would help. That is the whole problem with your post and why I replied to it. I think if
you would take the trouble of trying some hypothetical numbers, you would see that any help from attracting micro-investors is going to be negligible to
a company with a market cap the size of Apple. (e.g. one million micro-investors spending $100 per year on AAPL amounts to $100,000,000 or about
.025% of Apple's current market cap)

The qualitative observation that a stock split would attract new investors is not worth much, even if true, if those new investments don't budge the performance
of AAPL. The vehemence with which some people cling to the idea of a stock split gives the impression they feel it is some kind of panacea. It is not.
post #55 of 95
Quote:
Originally Posted by igriv View Post

4. The split idea would (a) do nothing and (b) would be an admission of weakness. Notice that Apple's tech brethren GOOG and AMZN have been going onward and upward without any such machinations.

Google did announce a split back in June 2012, but it has not been executed due to lawsuits over the new shares' lack of voting rights.
post #56 of 95
Quote:
Originally Posted by igriv View Post

Quote:
Originally Posted by quinney View Post

Google did announce a split back in June 2012, but it has not been executed due to lawsuits over the new shares' lack of voting rights.

That may be (I actually did not notice it), but my point is that they haven't had a split, and the stock has not been harmed thereby.

I agree with your point...just don't want it tainted
post #57 of 95
Originally Posted by igriv View Post
The money the company brings in belongs to... wait for it... the shareholders.

 

The shareholders don't get to decide whether or not Apple's employees get paid.


So sad, that they fire the management.

 

Funny how they're not doing that then, huh?


Forth paragraph: YES, that's what the market is telling you.

 

Then screw the market. I'll go with common sense instead.


Whatever I think of Apple management (my feelings are mixed), I believe that they are men enough to take responsibility, and not to blame their woes (and YES, their share price is a woe)  on evil hedge funds…

 

I don't know that anyone from Apple is doing that. Don't claim they are.


…space aliens…

 

See, you made that up. You. Don't claim that someone else believes something sane, much less insane.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #58 of 95
Quote:
Originally Posted by MJ Web View Post

Perhaps you'd like to try that shoe on the other foot. Investors and Wall Street are divorcing Apple. The basis of my observation is the stock had nosedived from $700 to $400 during the biggest bull market in this century. Use your eyes instead of shooting off your mouth, lkrupp!

Fail, your basis is wrong as per perception of Wall Street which is based on emotion and promises albeit empty with nothing of substance.
post #59 of 95
Quote:
Originally Posted by igriv View Post

 

The first paragraph and the second paragraph: The money the company brings in belongs to... wait for it... the shareholders. The shareholders are happy if the management uses it to bring in even more money. The shareholders are sad if the company brings in a lot of money on paper, but they never see this money in their pocket. So sad, that they fire the management. Wait, how can they do that??? Well, the management works for them, and the board, which represents THE SHAREHOLDERS (by the way, shareholders is meant in a general sense, debt also counts, but this is a non-issue for Apple). You just don't get it.

There has been no shareholder meeting that has proposed removing the current executive team or the board, nor will there be any time soon.

 

The shareholders do not own the company's profits, they own a share of the company equity, which is a very different thing.

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post #60 of 95
Quote:
Originally Posted by Rogifan View Post

Wall Street doesn't give a shit about MacPro.

 

I own several Mac Pros, I look forward to the product line being refreshed for the first time in 3+ years, Any Year Now.  And I know at least 150 other people who will be super-excited about that fact.
 
Overall impact on Apple's bottom-line: Mac Pro makes up something like less than .001% of the bottom line, they make more money selling iPod socks, which is why they seemingly can't be bothered to update the thing.
 
Having said all that, there is no excuse for just dumping pro users and kicking them to the curb, but this is the wrong forum for an extended rant on that topic. So far as their stock goes, I enjoyed the APPL long, ride up, and stepped off the train-wreck when it fell below $650.  If Jony Ive shows anything interesting and there's still a heartbeat there, I will reload on APPL.  If not, then they are well on their decades long journey into obscurity and oblivion, and just got in line behind Microsoft.
 
Having said all that, Apple the tech company is far from doomed, I have no intentions of replacing my Apple gear with anything else, because there isn't a viable alternative to jump ship to.  Apple has decades left to sort things out.  But, the stock market is almost completely decoupled from reality, and I'm not sure I can think of anybody even marginally sane, who sits there and watches their net worth deflate from $700/share, down to scraping the $400s.  Seriously, who does that?  I'm used to checking my APPL stock, seeing the Doom & Gloom & Recession forecast for the rest of the world, while Apple's reality distortion field keeps going, and my stock keeps going up.  Right now, it's the exact opposite. I realize people buy stock for a large variety of bizarre and emotional reasons, but I'm here for the money.
 
On the other side of that equation, buying back in at $400, if Jony Ive demonstrates he can actually do something, anything revolutionary/bordering on disruptive technology, without Steve Jobs there screaming at everybody.  Hoping for the best, expecting the worst.
post #61 of 95
Quote:
Originally Posted by jragosta View Post

Quote:
Originally Posted by quinney View Post

You have stated that you believe it would be beneficial for the performance of AAPL if the proportion of stock owned by individuals was increased relative to the proportion owned by institutions. If you don't replace the institutionally owned shares with individual investor owned shares by at least one to one, how are you going to change the relative proportions? I was really asking you to justify your own argument more than making a new one of my own. Call it a straw man if you want, as long as you take ownership..

Take at least a junior high level finance course before you spout off, OK?

You don't need to replace ALL of Fidelity's holdings with private purchase (your 'one to one' assertion) to change the ratio. If even ONE of Fidelity's shares was purchased by an individual, that would change the ratio.

Furthermore, you don't understand the simply concept of share sales. Every share that Fidelity sold already had a buyer, so EVEN ONE new buyer puts upward pressure on the share price.

That's what I get for trying to post while watching Game of Thrones. I started posting and then went to review some of your previous posts, where you claimed that Apple should encourage individual investors, since they are more likely to hold on to their shares than institutions. This is nonsense, and I started thinking about how individual investors would have to buy more shares than they sold to make any headway. Then I continued my post and conflated those thoughts with the discussion of how Fidelity sold a chunk of their AAPL holdings.

It is a shame I made this mistake, not only because it gave you an opportunity (which you never pass up) to pollute the forum with one of your condescending insults, but because it allowed you to create a smokescreen for avoiding addressing the main points of my post. You understandably edited out the part where I asked you to reveal how many micro-investors there were and how they could buy AAPL in enough volume to have a material effect on the stock price. I don't think you ever will, because I demonstrated to you just how wacky your idea is. If you want to propose your hypothetical numbers and prove me wrong, I will accept another of your insults without complaint.
post #62 of 95
Quote:
Originally Posted by quinney View Post

That's what I get for trying to post while watching Game of Thrones. I started posting and then went to review some of your previous posts, where you claimed that Apple should encourage individual investors, since they are more likely to hold on to their shares than institutions. This is nonsense, and I started thinking about how individual investors would have to buy more shares than they sold to make any headway. Then I continued my post and conflated those thoughts with the discussion of how Fidelity sold a chunk of their AAPL holdings.

It is a shame I made this mistake, not only because it gave you an opportunity (which you never pass up) to pollute the forum with one of your condescending insults, but because it allowed you to create a smokescreen for avoiding addressing the main points of my post. You understandably edited out the part where I asked you to reveal how many micro-investors there were and how they could buy AAPL in enough volume to have a material effect on the stock price. I don't think you ever will, because I demonstrated to you just how wacky your idea is. If you want to propose your hypothetical numbers and prove me wrong, I will accept another of your insults without complaint.

IOW, you were flat out wrong and your entire point was unfounded, yet you still go on the attack.

It's simple. If the share price were lower, more individual investors would buy the stock. It would presumably have no impact on the number of institutional investors buying the stock. More buyers, no change in demand equals higher price. Nothing wacky about that.

No one can predict how much it would affect the price, but the effect would be to increase the price. No matter how many silly nonsense stories you come up with.
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post #63 of 95
Quote:
Originally Posted by igriv View Post

Check this out:

http://www.thepatternsite.com/StockSplits.html

The numbers are underwhelming, and Apple's split would do a lot worse than the average, since usually splits come after a big run up in stock price (so are a way to continue the momentum slightly), and are usually coupled with higher dividends. To summarize: enough already with the split.

Sorry, but there's nothing average about AAPL. The price is at least 10 times higher than the average stock (probably more like 50 times higher). The P/E is less than half of the average stock.

Expecting it to behave the same way as a $0.50 share that is splitting in order to pawn off more shares on unsuspecting investors is ridiculous.

The closest analogy is Berkshire Hathaway B shares which were $3500 per share before being split 50:1 in January 2010. The stock rose about 30% in the next year, while the Dow was up only about 10%.

I trust Warren Buffett infinitely more than the trolls posting here.
Edited by jragosta - 4/3/13 at 7:03am
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post #64 of 95
Quote:
Originally Posted by igriv View Post

 

1. It IS Cook's job to manage shareholder value. It is his ONLY job. The only thing that makes it unclear is that he is managing the long-term value, and if he makes a credible argument that what he is doing now is in the interest of such value, then the short-term oscillations in the stock price can be ignored. He has not made such an argument, and the dive in Apple's share price is now "medium-term", as opposed to short term.

 

 

I am usually just a lurker, but I had to comment on this.

 

Tim Cook's job is to make sure the company is headed down the best path possible.  To make sure all the teams are united to a common goal.  And that goal is most certainly NOT shareholder value.  It is to produce the BEST PRODUCTS POSSIBLE.  Not the products that make the most money, not the products that "know-it-all" bloggers say they need to make or get trampled by the competition.  To make fantastic products.  

 

As a shareholder, I want to see the price go up.  But we will see it go back up as people realize how great the products are, and buy them year after year.  

 

Every product I try to buy (most recently the new 27" iMac, which is the most amazing machine I have ever had), I have to wait weeks/months to get because of demand.

Everyone is trying to emulate, copy, or flat out steal what Apple is doing.

Every quarter they make more money then they ever have before.

The war chest continues to grow

 

These are only the signs of a hugely successful company, and Mr. Cook, I applaud you. 

post #65 of 95
Quote:
Originally Posted by cyberjedi View Post

I am usually just a lurker, but I had to comment on this.

 

Tim Cook's job is to make sure the company is headed down the best path possible.  To make sure all the teams are united to a common goal.  And that goal is most certainly NOT shareholder value.  It is to produce the BEST PRODUCTS POSSIBLE.  Not the products that make the most money, not the products that "know-it-all" bloggers say they need to make or get trampled by the competition.  To make fantastic products.

 

Well, you're sorta right and mostly wrong.

 

The goal of any company is to increase shareholder value. It does this by making the most profitable products it can in whatever its market and area of expertise is. Some companies (Apple being one of them) have chosen a strategy of making great technology products.

 

So, the first goal is to increase shareholder value. The other goals (next profit, after that making great products) are goals in service of the first.

 

The bottom line is that Apple can make the greatest products on the planet, but they cannot sell them profitably they will soon be out of business and no longer making any products at all.

 

In fact, Apple could make even better products than it does right now if profit was no concern. It would use the absolutely best materials and best processes all regardless of cost and deliver even better products. But it doesn't do this because profit is a requirement.

 

Further, if they stop making profit (even only breaking even) or lower levels of profit, investors will retract their investment in Apple and invest their capital in other ventures that provide a greater profit.

The state is nothing more than a criminal gang writ large.

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The state is nothing more than a criminal gang writ large.

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post #66 of 95
Quote:
Originally Posted by MJ1970 View Post

So, the first goal is to increase shareholder value. The other goals (next profit, after that making great products) are goals in service of the first.

It's not, because that would mean their primary goal is to service shareholders even if that meant the decisions were detrimental to the success of the company e.g depleting cash reserves to pay investors. The primary goal of the staff at Apple is towards the success of the company itself and shareholders come second. Shareholders can't exist without the company surviving so the most important goal is the success of the company.
Quote:
Originally Posted by MJ1970 View Post

The bottom line is that Apple can make the greatest products on the planet, but they cannot sell them profitably they will soon be out of business and no longer making any products at all.

Further, if they stop making profit (even only breaking even) or lower levels of profit, investors will retract their investment in Apple and invest their capital in other ventures that provide a greater profit.

Why does this keep coming up? How quickly do you think the most profitable company in the world is going to become unprofitable and 'soon be out of business'? It's the weirdest kind of fear-mongering clearly designed to try and encourage Apple to make bad decisions for the company to boost the profile of AAPL towards investors. It's like saying McDonalds serves around 70 million people per day but y'know if tomorrow people decide they don't want a burger, they don't make any money so they need new management and should think about making a 50c burger for emerging markets. It's totally absurd reasoning.

Apple is selling more devices than ever, they are making more profits than ever in a poor economy and more profits than any company in the world and yet people ponder about their near-term collapse. Their iPad shipments are up nearly 50% over last year. The potential iPad market is huge.

Who else in this industry is holding ~40% gross margins and 20-25% net margins? Likely nobody, so what's the problem? The problem is that investors are not happy with the stock price drop (which they ultimately control anyway) and in spite of the price rising from $420 to $700 in under a year under Tim's management and dropping back to $420 in under a year under Tim's management, claim that Tim is the problem and needs to either get out or do better by making cheaper, lower margin products (which is silly because it obviously makes matters worse).

If anybody has any suggestions about what they should be doing to be better than making more profit than anyone the world, I'm sure they'll be all ears. Vague suggestions like 'be more innovative', 'make a watch/TV/cheap phone' or 'give investors more money' are not good enough reasons to ensure the success of the company, which is their primary goal. They are doing a pretty awesome job at it and if people started acknowledging that, instead of spreading bad news around, then maybe the stock price would go back up.
post #67 of 95
Quote:
Originally Posted by Marvin View Post

It's not, because that would mean their primary goal is to service shareholders even if that meant the decisions were detrimental to the success of the company e.g depleting cash reserves to pay investors. The primary goal of the staff at Apple is towards the success of the company itself and shareholders come second.

 

1oyvey.gif

 

But then that would not be increasing shareholder value, now would it. 1rolleyes.gif

 

 

 

Quote:
Originally Posted by Marvin View Post

Shareholders can't exist without the company surviving so the most important goal is the success of the company.

 

Yes, the company must survive. But its purpose for existing and surviving is to provide a profitable return to shareholders. It achieves this by creating great (and profitable) products.

 

 

Quote:
Originally Posted by Marvin View Post

Why does this keep coming up?

 

Because it is true and sometimes it must be repeated because some people don't believe it.

 

 

Quote:
Originally Posted by Marvin View Post

How quickly do you think the most profitable company in the world is going to become unprofitable and 'soon be out of business'?

 

First, perhaps faster than you think if they insist on selling unprofitable products. If there focus was exclusively making the greatest products without regard to their profitability.

 

 

Quote:
Originally Posted by Marvin View Post

It's the weirdest kind of fear-mongering clearly designed to try and encourage Apple to make bad decisions for the company to boost the profile of AAPL towards investors.

 

No one is "fear-mongering" here. That's a straw man.

 

 

Quote:
Originally Posted by Marvin View Post

It's like saying McDonalds serves around 70 million people per day but y'know if tomorrow people decide they don't want a burger, they don't make any money so they need new management and should think about making a 50c burger for emerging markets. It's totally absurd reasoning.

 

What's absurd is your second straw man in a row.

 

 

Quote:
Originally Posted by Marvin View Post

Apple is selling more devices than ever, they are making more profits than ever in a poor economy and more profits than any company in the world and yet people ponder about their near-term collapse. Their iPad shipments are up nearly 50% over last year. The potential iPad market is huge.

 

Indeed. I have not claimed otherwise. Perhaps someone else has. None of those facts, though, refute the possibility that there might be an even larger market for Apple products when different features and price points are considered.

 

 

Quote:
Originally Posted by Marvin View Post

Who else in this industry is holding ~40% gross margins and 20-25% net margins? Likely nobody, so what's the problem? The problem is that investors are not happy with the stock price drop (which they ultimately control anyway) and in spite of the price rising from $420 to $700 in under a year under Tim's management and dropping back to $420 in under a year under Tim's management, claim that Tim is the problem and needs to either get out or do better by making cheaper, lower margin products (which is silly because it obviously makes matters worse).

 

Certainly investors are sometimes wrong. However, it's important to realize that a company's stock price is about the future more than the present. If investors (especially those who watch closely and have a very strong interest in an increased stock price) see a darker future for the company, they will begin to bail on the company's stock. They may be right. They may be wrong. No one can predict the future with certainty (including Apple.) So some investors may be seeing somethings now and projecting into the future a less successful Apple. For example they may be seeing early trends that look successful in the present but are only short term and actually make things worse longer term.

 

Either way, if you feel strongly (or "know") that Apple's stock is currently undervalued, then I suggest you buy as much as you can. You will reap the material benefits of your insight.

 

 

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Originally Posted by Marvin View Post

If anybody has any suggestions about what they should be doing to be better than making more profit than anyone the world, I'm sure they'll be all ears. Vague suggestions like 'be more innovative', 'make a watch/TV/cheap phone' or 'give investors more money' are not good enough reasons to ensure the success of the company, which is their primary goal. They are doing a pretty awesome job at it and if people started acknowledging that, instead of spreading bad news around, then maybe the stock price would go back up.

 

You must be ranting against someone else here.


Edited by MJ1970 - 4/10/13 at 8:04am

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post #68 of 95
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Originally Posted by MJ1970 View Post

Yes, the company must survive. But its purpose for existing and surviving is to provide a profitable return to shareholders. It achieves this by creating great (and profitable) products.

Right but the point is that the company success comes first, even if that means shareholders have to suffer in the interim. For example, it may be more beneficial for the company to leave money overseas for investment opportunities and that could come at the expense of shareholder dividends. Bringing the money home and handing it out is not their primary motive, it is to make the best decisions for the long term success of the company.
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Originally Posted by MJ1970 View Post

First, perhaps faster than you think if they insist on selling unprofitable products.

When did they start selling unprofitable products? Some of their gross margin drop was probably down to the iPad Mini and the iPhone 4/4S at lower prices, which is what people are suggesting they actually do more of.
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Originally Posted by MJ1970 View Post

No one is "fear-mongering" here. That's a straw man.

How is it not fear-mongering to use phrases that suggest the most profitable company in the world might soon be out of business? That's appropriate for a company like RIM or Nokia. Apple is so far from that, it's mind-boggling how commonly it's used.
Quote:
Originally Posted by MJ1970 View Post

None of those facts, though, refute the possibility that there might be an even larger market for Apple products when different features and price points are considered.

This is what it always comes down to though: market volume. Amazon has a large market volume and for some reason investors love this but their profits are non-existent. Would you rather that Apple sells 100 million iPhones per quarter and drops their gross margins down to 20%? All that's going to achieve is that when they can't hit massive volumes again, their profits will be ruined because they can't put the prices back up. Just watch what happens to Samsung. They are already struggling to maintain high margins and while they ship higher volumes than Apple, they make about half the profit. It's not going to get better than that for them.
Quote:
Originally Posted by MJ1970 View Post

it's important to realize that a company's stock price is about the future more than the present. If investors (especially those who watch closely and have a very strong interest in an increased stock price) see a darker future for the company, they will begin to bail on the company's stock. They may be right. They may be wrong.

That's exactly the problem though. People are making guesses about the future of a very secretive company and suggesting change needs to happen right now because the guesses about the future look like things are going bad. The people at the company know better than anyone what their long term goals and products are and a lot of them are significant shareholders in the company.

This happened to Intel recently where their shares were downgraded because people assumed they were delaying Haswell and Intel decided to speak up and say there's no problem at all and Haswell is on track. Neither Apple nor Intel has to do that. The stock market is always going to play the guesswork game, the mistake is in thinking that the companies have to acknowledge and make decisions based on it.
Quote:
Originally Posted by MJ1970 View Post

Either way, if you feel strongly (or "know") that Apple's stock is currently undervalued, then I suggest you buy as much as you can. You will reap the material benefits of your insight.

Given how fast the stock went up and how it came back down in roughly the same time, it looks as though it was overvalued at the time it hit its peak but it's an entirely different market from Apple's day to day operations. I don't think it's wise to stock up now for the purposes of selling at a high price in the near-term. I do think that Apple is a safe bet for the long term. I think the comments about them failing, becoming unprofitable, going out of business are just totally unlinked to the reality. Their growth is going to slow down and they will play out the current strategy, which has a long way to go and they will continue to make a lot of profit. If people want a high growth opportunity with Apple now, that's not going to happen, that opportunity has passed but it's crazy to think that it would. If people want high growth, that's what startups are for.

Apple went from near bankruptcy to where they are now in 15 years. That's a gravy train that's not coming around again. That's not to say it's downhill from here, just like it's not downhill for Microsoft. It's just steady. Look at Microsoft's stock next to Apple's. They had that massive spike too around 1999 and it settled around half that:

http://www.google.co.uk/finance?client=ob&q=NASDAQ:MSFT
http://www.google.co.uk/finance?client=ob&q=NASDAQ:AAPL

I reckon that will happen with Apple but I do think that it will rise from where it is now as Apple does have some growth opportunities.

edit: here's a graph overlay of AAPL (green) vs MSFT (blue):



I suspect much the same thing will happen but like I say, I don't expect it to fall as much with Apple as they still have high demand products. I could see it settling between 450-500.
post #69 of 95
Quote:
Originally Posted by Marvin View Post

Right but the point is that the company success comes first, even if that means shareholders have to suffer in the interim. For example, it may be more beneficial for the company to leave money overseas for investment opportunities and that could come at the expense of shareholder dividends. Bringing the money home and handing it out is not their primary motive, it is to make the best decisions for the long term success of the company.

 

I totally understand this and do not disagree.

 

 

Quote:
Originally Posted by Marvin View Post

When did they start selling unprofitable products?

 

I never claimed they are. The comment was in response to "all Apple needs to do is focus on making the best products."

 

 

Quote:
Originally Posted by Marvin View Post

How is it not fear-mongering to use phrases that suggest the most profitable company in the world might soon be out of business?

 

Seeing as how I did not say they "might soon be out of business" you must be referring to someone else. I simply pointed put that any business that does not focus on profitability and shareholder value (over the long term) and focused exclusively on "making the best products"  would find itself unprofitable and eventually out of business.

 

Based on the above three items I feel you have grossly misunderstood what I have said. Whether this is intentional or not I cannot tell.

 

 

Quote:
Originally Posted by Marvin View Post

This is what it always comes down to though: market volume. Amazon has a large market volume and for some reason investors love this but their profits are non-existent. Would you rather that Apple sells 100 million iPhones per quarter and drops their gross margins down to 20%? All that's going to achieve is that when they can't hit massive volumes again, their profits will be ruined because they can't put the prices back up. Just watch what happens to Samsung. They are already struggling to maintain high margins and while they ship higher volumes than Apple, they make about half the profit. It's not going to get better than that for them.

 

I would prefer that Apple pursued the most profitable course they could over the long term. Given that I do not have access to the information they surely do, it's hard for me to know exactly what that means. Do I care if their margins are lower for more revenue and more profit? I don't know. To suggest that there is no profit it in the volume market seems silly to me.

 

 

Quote:
Originally Posted by Marvin View Post

That's exactly the problem though. People are making guesses about the future of a very secretive company and suggesting change needs to happen right now because the guesses about the future look like things are going bad. The people at the company know better than anyone what their long term goals and products are and a lot of them are significant shareholders in the company.

This happened to Intel recently where their shares were downgraded because people assumed they were delaying Haswell and Intel decided to speak up and say there's no problem at all and Haswell is on track. Neither Apple nor Intel has to do that. The stock market is always going to play the guesswork game, the mistake is in thinking that the companies have to acknowledge and make decisions based on it.

 

Agreed. But companies make mistakes. They misread the future and the market. Some investors are simply currently saying that Apple might be doing that. If you disagree, then buy their stock.

 

The issue with regard to lower cost iPhone as an example has to do with the long term prospects of owning the OS platform. There's risk, for Apple, that it could get out-maneuvered by Android much as it was by Microsoft (vs. Mac). I'm not saying that is or will happen, simply that it is a risk and a real one and one to not be taken lightly. More importantly, it could be a risk whose seeds have already been planted, and you don't realize you've lost it until you're already sitting under the shade of the Android tree looking over at the iOS shrub.

 

I'm not actually suggesting that Apple makes it decisions based on the stock price or what some investors are suggesting. Again this seems to be a misinterpretation of what I've said.

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post #70 of 95
Quote:
Originally Posted by MJ1970 View Post

The comment was in response to "all Apple needs to do is focus on making the best products."

Ok, I see what you're saying with that.
Quote:
Originally Posted by MJ1970 View Post

I simply pointed put that any business that does not focus on profitability and shareholder value (over the long term) and focused exclusively on "making the best products"  would find itself unprofitable and eventually out of business.

But you are implying this is the case with Apple. You seem to be for short term changes to prevent your implied long term outcomes, which includes going out of business. I just think even mentioning the possibility of going out of business when it comes to Apple is so far off track considering how well Apple is doing right now. I don't think it's anywhere near the time for concern over the company strategy.
Quote:
Originally Posted by MJ1970 View Post

To suggest that there is no profit it in the volume market seems silly to me.

It's a race to the bottom just like it is in any market and more risky if they have manufacturing issues.

The very idea of high volume suggests low price. This means Apple has to build a lower quality product as you can see comparing the iPhone and iPod Touch. The existence of a lower priced option drives people to it (e.g the iPad Mini), which lowers the average selling price. So Apple just ends up trying to sell more units for very little gain in profit if any. This dilutes their brand as a premium brand, like what happened with Sony. These days, people wouldn't care about a Sony vs a Samsung TV. That's not a good strategy for Apple and it's never been one they've followed.

I'm not suggesting they shouldn't have done the iPad Mini, I'm just saying it shows what happens aiming for volume by lowering price.

Also when we are talking about the volume market, I know it's relative but Apple sells about 100 million units per year. That seems like they are covering volume just fine.
Quote:
Originally Posted by MJ1970 View Post

Agreed. But companies make mistakes. They misread the future and the market. Some investors are simply currently saying that Apple might be doing that. If you disagree, then buy their stock.

It doesn't stop there though. The media blows up the hype/guesses and it triggers sell-offs and it's self-fulfilling. The sequence goes:

- investors and analysts put out negative guesses and exaggerate slowed growth
- investors start selling
- stock starts falling
- investors who haven't sold start yelling, 'Tim what are your playing at!'

The blame is being misplaced and the stock is moving mostly independently of what Apple is doing. Apple is doing exactly the same thing they've always done. They are just hitting the limits of what the market will sustain through no fault of their own.
Quote:
Originally Posted by MJ1970 View Post

The issue with regard to lower cost iPhone as an example has to do with the long term prospects of owning the OS platform. There's risk, for Apple, that it could get out-maneuvered by Android much as it was by Microsoft (vs. Mac). I'm not saying that is or will happen, simply that it is a risk and a real one and one to not be taken lightly. More importantly, it could be a risk whose seeds have already been planted, and you don't realize you've lost it until you're already sitting under the shade of the Android tree looking over at the iOS shrub.

The Windows comparison has been mentioned in the past and I still think it's a different situation with this. Apple will have sold over 550 million iOS devices by now. Android is at over 750 million. Android will be getting installed into all sorts of things so the OS will spread further. It will grow faster but there's a limit to the market that can buy the phones:

http://www.engadget.com/2013/01/25/global-mobile-phone-shipments-2012/

I guess eventually smartphones will make up the entire volume and Apple might end up with less than 10% like with the desktop OS but what's the implication of that? It's not going to mean less software support because we are talking about hundreds of millions of people. It's going to have no effect unless people stop buying Apple's products. That can only happen if the competition starts building better products and they can't because they don't have an integrated eco-system. If one manufacturer tries to do it, they fragment the OS. Even now, we can see modern hardware running Android with laggy interfaces at price points competing with Apple.

Apple planned this for years and I think they nailed it big time. I really don't see them having problems maintaining a healthy marketshare. They don't need to have a 50/50 split with Android of the entire market. Apple alone can't ship 800 million premium devices in a year. That's never going to happen and it doesn't have to. If they tried, all they'd do is kill their margins and saturate the market. They can do 200m, maybe 300m - in fact that might happen this year. They shipped 70+million in Q1 so it'll be somewhere in between, which is massive growth over last year.

They have a good balance between the profit and the volume and I think if they just stick to this strategy, they won't have problems for a very long time.
post #71 of 95
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Originally Posted by Marvin View Post

But you are implying this is the case with Apple.

 

I'm not. Maybe you're inferring that from what I said. I was replying (if you look back) to a poster who seemed to be implying that that was all Apple needed to do (i.e., focus on making the bets products.)

 

 

Quote:
Originally Posted by Marvin View Post

You seem to be for short term changes to prevent your implied long term outcomes, which includes going out of business. I just think even mentioning the possibility of going out of business when it comes to Apple is so far off track considering how well Apple is doing right now.

 

Again, this is your inference. I'm going to discontinue our discussion if this continues. If you look back at the context of my original comments (i.e., a response to a specific post) I think you'll see that your interpretation of my comments is a bit off.

 

 

Quote:
Originally Posted by Marvin View Post

The very idea of high volume suggests low price. This means Apple has to build a lower quality product as you can see comparing the iPhone and iPod Touch. The existence of a lower priced option drives people to it (e.g the iPad Mini), which lowers the average selling price. So Apple just ends up trying to sell more units for very little gain in profit if any. This dilutes their brand as a premium brand, like what happened with Sony. These days, people wouldn't care about a Sony vs a Samsung TV. That's not a good strategy for Apple and it's never been one they've followed.

 

Mostly right, but not completely. Yes the volume/mass market does require lower price points. I doubt seriously that Apple would sell products that make them no profit (as your 4th sentence implies.) In fact there is an issue of price elasticity of demand that factors into all of this. Finally I disagree with what killed Sony and am doubtful Apple will suffer the same fate (at least for the same reasons.)

 

 

Quote:
Originally Posted by Marvin View Post

Also when we are talking about the volume market, I know it's relative but Apple sells about 100 million units per year. That seems like they are covering volume just fine.

 

That depends on how big the market is now doesn't it? Which product are you referring to?

 

 

Quote:
Originally Posted by Marvin View Post

Also when we are talking about the volume market, I know it's relative but Apple sells about 100 million units per year. That seems like they are covering volume just fine.
It doesn't stop there though. The media blows up the hype/guesses and it triggers sell-offs and it's self-fulfilling. The sequence goes:

- investors and analysts put out negative guesses and exaggerate slowed growth
- investors start selling
- stock starts falling
- investors who haven't sold start yelling, 'Tim what are your playing at!'

The blame is being misplaced and the stock is moving mostly independently of what Apple is doing. Apple is doing exactly the same thing they've always done. They are just hitting the limits of what the market will sustain through no fault of their own.

 

I understand your analysis of the situation. A couple of points here though:

 

- You're begging the question on point 1.

- Regarding "Apple is doing exactly the same thing they've always done" your assuming that this is not the issue leading to a lower stock price. To give a rather extreme example to make the point more clear: Buggy whip makers kept "doing exactly the same thing they've always done" all the way to bankruptcy.

- If they are "hitting the limits of what the market will sustain" then they probably ought to be considering whether they should be doing exactly what they've always done. If the market conditions are changing, then Apple may need to change also. For example, if their goal is to always be in the business of high margin software/hardware products and things like smart phones are starting to go commodity, then Apple must adapt. If they want to continue to be in the smart phone business and that business is changing (and looks like it is), they may need to adjust their product strategy.

 

 

Quote:
Originally Posted by Marvin View Post

The Windows comparison has been mentioned in the past and I still think it's a different situation with this. Apple will have sold over 550 million iOS devices by now. Android is at over 750 million. Android will be getting installed into all sorts of things so the OS will spread further. It will grow faster but there's a limit to the market that can buy the phones:

http://www.engadget.com/2013/01/25/global-mobile-phone-shipments-2012/

 

So your 100M (out of 700M) suddenly doesn't look so much like the "volume" part of the market.

 

 

Quote:
Originally Posted by Marvin View Post

I guess eventually smartphones will make up the entire volume...

 

You can guess that's what will happen and you will have about a 99% chance of being right. This is the pattern of the market. The (luxury) products of yesterday/yesteryear are the commonplace products for everyone today.

 

 

Quote:
Originally Posted by Marvin View Post

...and Apple might end up with less than 10% like with the desktop OS but what's the implication of that? It's not going to mean less software support because we are talking about hundreds of millions of people. It's going to have no effect unless people stop buying Apple's products.

 

Actually that could happen. I suspect it is much easier for people to switch phones (even smart phones) that to have switched PCs.

 

 

Quote:
Originally Posted by Marvin View Post

Apple planned this for years and I think they nailed it big time. I really don't see them having problems maintaining a healthy marketshare. They don't need to have a 50/50 split with Android of the entire market. Apple alone can't ship 800 million premium devices in a year. That's never going to happen and it doesn't have to. If they tried, all they'd do is kill their margins and saturate the market. They can do 200m, maybe 300m - in fact that might happen this year. They shipped 70+million in Q1 so it'll be somewhere in between, which is massive growth over last year.

They have a good balance between the profit and the volume and I think if they just stick to this strategy, they won't have problems for a very long time.

 

Yep. Maybe you're right. In fact you probably are. Many markets tend to settle in at a natural number of competitors (often 3-5) with 2-3 being dominant and a handful of much smaller ones. This may happen for many many years with the smart phone market until something disruptive comes along.


Edited by MJ1970 - 4/10/13 at 1:30pm

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post #72 of 95
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Originally Posted by MJ1970 View Post

I doubt seriously that Apple would sell products that make them no profit (as your 4th sentence implies.)

Little to no gain in profit is what I was saying, not no profit.
Quote:
Originally Posted by MJ1970 View Post

Regarding "Apple is doing exactly the same thing they've always done" your assuming that this is not the issue leading to a lower stock price. To give a rather extreme example to make the point more clear: Buggy whip makers kept "doing exactly the same thing they've always done" all the way to bankruptcy.

There it is again with the examples of bankruptcy, even if it is labelled as extreme. Apple has not directly caused the fluctuation in the stock price. It went up as fast as it went down. The entire industry didn't change in the single year and a half that happened. The stock change was obviously just the market figuring out Apple's true long term value and it seems to be holding at a market cap higher than any other company. Maybe it'll keep sliding if the numbers are down when they report them in 2 weeks but I doubt they will be.
Quote:
Originally Posted by MJ1970 View Post

If they are "hitting the limits of what the market will sustain" then they probably ought to be considering whether they should be doing exactly what they've always done. If the market conditions are changing, then Apple may need to change also. For example, if their goal is to always be in the business of high margin software/hardware products and things like smart phones are starting to go commodity, then Apple must adapt. If they want to continue to be in the smart phone business and that business is changing (and looks like it is), they may need to adjust their product strategy.

It is possible though to maintain a steady marketshare. They can continue to be in the smartphone business without growth. Like Microsoft isn't growing in desktop marketshare but they don't need to. RIM/Blackberry has managed to stay in business with a steady share of the market.
Quote:
Originally Posted by MJ1970 View Post

So your 100M (out of 700M) suddenly doesn't look so much like the "volume" part of the market.

It's 135m and it is high volume even relative to the 700m. This is the same thing people focus on with Windows. The operating system share is split between many manufacturers and Android is even free. In terms of hardware, which is where Apple makes the profit, they are doing really well. Only Samsung and Nokia outsell Apple in mobile. I'd say coming in behind Nokia puts them in the volume market and Nokia has shown that they have nothing to come back with so they are dead in the water. Their share will continue to drop to the benefit of Android devices and Apple.
Quote:
Originally Posted by MJ1970 View Post

Actually that could happen. I suspect it is much easier for people to switch phones (even smart phones) that to have switched PCs.

It could but Apple keeps an eye on this. Schiller even said recently more people were switching from Android to iOS than the other way round. Most of Android's growth comes from people ditching Blackberry and Nokia and Apple's and Android's growth pretty much mirrors the decline of the dying brands.
post #73 of 95
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Originally Posted by Marvin View Post

Little to no gain in profit is what I was saying, not no profit.

 

Still, you're making an assumption here. Do a little reading on the price-elasticity of demand to understand the other possibilities.

 

 

Quote:
Originally Posted by Marvin View Post

There it is again with the examples of bankruptcy, even if it is labelled as extreme.

 

1hmm.gif I think you need to chill a bit. It was offered as an example. Sheesh.

 

 

Quote:
Originally Posted by Marvin View Post

Apple has not directly caused the fluctuation in the stock price. It went up as fast as it went down. The entire industry didn't change in the single year and a half that happened.

 

Maybe. Maybe not.

 

 

Quote:
Originally Posted by Marvin View Post

The stock change was obviously just the market figuring out Apple's true long term value and it seems to be holding at a market cap higher than any other company.

 

So what is your issue here then?

 

 

Quote:
Originally Posted by Marvin View Post

It is possible though to maintain a steady marketshare. They can continue to be in the smartphone business without growth.

 

Of course. Obviously. No question. I have not claimed otherwise. You appear to be arguing against points that I haven't made. 1confused.gif

 

 

Quote:
Originally Posted by Marvin View Post

It's 135m and it is high volume even relative to the 700m.

 

Well since we're dealing in rather subjective and vague terms like "high volume" I'll just let you have this point even though this "high volume" appear to mathematically only appear to be a smallish (20%) percentage.

 

 

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Originally Posted by Marvin View Post

It could but Apple keeps an eye on this.

 

I'm sure they do. If they didn't, I'd short them now!

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post #74 of 95
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Originally Posted by MJ1970 View Post

Quote:
Originally Posted by Marvin View Post

The stock change was obviously just the market figuring out Apple's true long term value and it seems to be holding at a market cap higher than any other company.

So what is your issue here then?

The issue is the (possibly subconscious) negativity. You can see it all the way through the comments people make about the stock drop (on other sites too) as if somehow Apple is to blame for this. Here's another recent article that demonstrates it:

http://www.forbes.com/sites/greatspeculations/2013/04/10/disappointing-sales-at-foxconn-fail-to-bruise-apple-stock-for-now/

You are saying that you're not pointing to Apple's impending demise but you keep using phrases and examples that point to potential bankruptcy or going of business or not making any profit and needing to make changes like going after high volume. I can understand using these things merely as examples but why use them unless you are implying that they somehow apply to Apple's current situation? There seems to be a strange way of thinking that's taken over because of the massive drop and somehow people have forgotten the massive gain that preceded it. Nobody seems to question why the stock goes up so quickly but when it goes down, something needs to be done about it.

Do you acknowledge that Apple is currently the most profitable company in the history of the world and that suggestions of bankruptcy or unprofitability are not near-term possibilities and in light if this, do you acknowledge that there is no need for them to change their business strategy?
Quote:
Originally Posted by MJ1970 View Post

Well since we're dealing in rather subjective and vague terms like "high volume" I'll just let you have this point even though this "high volume" appear to mathematically only appear to be a smallish (20%) percentage.

I misread the chart earlier, Apple is 2nd, Nokia is 3rd:

http://www.engadget.com/2013/01/25/global-mobile-phone-shipments-2012/

Samsung is the only manufacturer ahead of Apple in shipments with 30% of the market. If you don't think 20% is high volume, then Samsung with 30% can't be either so no manufacturer is shipping in high volumes. Given that the terms are all relative, someone has to be shipping in high volumes so like I say, I'd describe Apple's ~20% share as high volume.

If you expect Apple to outsell all Android device manufacturers combined with only premium products in order to be considered a high volume seller, I'd say that's a bit unrealistic.

Tim Cook addressed the issue of volume specifically:

http://appleinsider.com/articles/13/02/27/apple-ceo-tim-cook-on-android-growth-success-is-not-making-the-most

"The CEO told shareholders that his company could press "a button or two" that would have Apple make the most products in a particular category. But that "wouldn't be good for Apple," he said."
post #75 of 95
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Originally Posted by igriv View Post

 

Apple has high-demand products, but you might recall that MS did too in 1999, and still does.


Microsoft had a P/E of 100 or so in 1999, then dropped in half to 50 P/E, then grew into that valuation over a decade by growing earnings leaving the stock price flat.  There is no parallel with Apple that currently has a 6 P/E ex-cash.

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post #76 of 95
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Originally Posted by igriv View Post

 

Yes, you are right, but there is a (scary, for apple holders) parallel: The way you are describing the process (with which I agree), in effect the MS valuation post the 2x drop was essentially correct (in fact, somewhat high), which is why the price stayed flat.


No - the 50 P/E was in no way a good valuation of Microsoft after the dot com crash, which is why shareholders got 0% return over the next 12 years after that - the company had to grow into the valuation.

If Apple does the same thing over the next 12 years, the cash horde will be way more than the stock price and the P/E will be effectively zero or better.  If you want to show a parallel you are going to have to work harder to show it.

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post #77 of 95
Quote:
Originally Posted by e1618978 View Post


No - the 50 P/E was in no way a good valuation of Microsoft after the dot com crash, which is why shareholders got 0% return over the next 12 years after that - the company had to grow into the valuation.

If Apple does the same thing over the next 12 years, the cash horde will be way more than the stock price and the P/E will be effectively zero or better.  If you want to show a parallel you are going to have to work harder to show it.

 

exactly. Even Dell has a higher P/E than Apple right now.  Its all market manipulation.  The big funds want a higher ownership% of Apple.  They were sick when Apple ran up to 700 yet they only owned about 60% of the shares.  In contrast the funds own 86% of Google.  They are really trying to scare the private investor away and buy their shares for cheap.

post #78 of 95
Quote:
Originally Posted by igriv View Post

"The funds"? Which funds? Pension funds, which have YOUR money in it? They could not manipulate the price of a can of soda. Almost all of the S&P is owned by mutual and pension funds (both of which are pools of individual investors), so go take a chill pill.

 

Hedge funds.  Same hedge funds that can buy 50-1 margin.

post #79 of 95
Quote:
Originally Posted by igriv View Post

 

a. MSFT hit bottom at the end of 2000, from which point on its adjusted (for splits and dividends) return through yesterday has been close to a factor 2, SPY (S&P with dividends reinvested, similarly adjusted) is up by almost exactly 50%. So, MSFT was, if anything, undervalued at its 50 P/E, by around 30%. If you multiply AAPLE stock price by 1.3, you will get around 610, which would not be viewed as grossly undervalued.


http://finance.yahoo.com/echarts?s=MSFT+Interactive#symbol=msft;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Microsoft has been flat, those wiggles don't count.  If you managed to buy when it spiked down exactly at the right time in 2000, and sold last year when it was at its high, you could have gotten good return (not a 50% return though), but that would have been luck.  Mostly it is the same price as now as it was in 2000.

And you didn't address the fact that Apple has a P/E of 6, not 50.  How exactly do you propose that the situation is the same over the next 10 years?

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post #80 of 95
Quote:
Originally Posted by igriv View Post

 

What? Look at ADJUSTED return. As for the P/E, I am not comparing the statistics of MSFT and AAPL. The point of what I am saying is that MSFT was reasonably fairly valued in 2001, and it is quite likely that so is AAPL now. As for why the MSFT P/E was 50 vs AAPL's 6 -- same reason GOOG has a higher P/E than AAPL: MSFT was perceived at the time as untouchable in their core markets (OS, Office suite), while AAPL's lead in phones is viewed as quite precarious.

 

Apple has a worst PE than Dell, HP, and Garmin.  Sure that makes alot of sense.

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