Originally Posted by matrix07
Originally Posted by rcfa
Samsung doesn't pay analysts.
How do you know exactly? They may not pay analysts, bloggers or writers directly but how do you know the massive advertising money they poured to publications have no effects on the reports?
Or do you think all Bloomberg writers are just anti-Apple?
They are neither pro Apple nor anti Apple. They are pro trading profits. Talking companies up, then talking them down, then talking them up, etc. makes a lot of money if you're part of the gang doing the game on the clueless public.
No analyst can be that stupid:
a) they claim they dump Apple because Apple has slowing growth, so they stock price goes down.
b) even at the peak of the stock price, Apple paid a good dividend and kept still piling up cash
c) so in other words, Apple doesn't need to grow at all to reliably pay handsome dividends, and it had a low P/E ratio even then
d) so Apple's sales and profits would actually have to shrink for their P/E ratio to come into more normal ranges, and to stop piling up cash while even paying the same dividends.
In other words, for Apple's stock price to be where it's now, it would actually have to see its business collapse, but Apple is growing. So the valuation is factually wrong. But the market isn't about facts, it's about psychology, and if people know how to talk a company up and down, they can make massively profitable trades; and that's what's happening. This was particularly obvious when they chose to ignore the different length of Q4 last fiscal year, or when they chose to ignore the effect of the timing of new product releases into the sales and revenue and profit margins. These things follow known patterns and need to be averaged out to be meaningful, but they choose not to do that, when it serves their narrative.
Everyone looking at the figures knows Apple isn't going anywhere. The eco system is too sticky, the products are too good, the company financially too healthy, too much R&D going on, etc. Just because feature phones are being replaced with low-end smart phones that hardly see any use besides a bit of Facebook reading doesn't mean Apple's real market is being taken away from them.
Of course, ANY MARKET that a company creates will see competition eventually, and competition will always take some part of that market, regardless of the relative qualities of the competing products. There are always enough people who don't get the difference between a better and a worse product, or people who just want to be different, or products that fulfill some very special requirements and thus gain some customers.
None of that is new or surprising, but if you're in the business of talking companies up and down for trading profits, then you can spin all of these obvious facts in various ways to suit your goals, and you will succeed when too many clueless people buy stock and get spooked by these analysts.
Unfortunately, there's much too little investigation in these things. Just like the rating agencies played a huge part in the mortgage securities scam (and thus the collapse of the housing market), so the analysts play a huge part in the stock market scam. We had that sort of pattern already before the tech bubble burst way back when: analysts talked companies up for profit, until things collapsed. Now they are a bit smarter: they don't talk entire sectors up, they talk individual companies up and down, that way they prevent the entire market from melting down, but they can still make their profits.
Short of Samsung speculating with Apple stock, they have nothing to gain or lose from Apple's stock price. Not even Apple cares about the stock price. Both companies care about marketing, sales, profits, products and intellectual property, everything else is a side show. Neither Apple nor Samsung does better or worse because their stocks are up or down. They do better or worse when their profits are up or down.