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Shares of Apple end week at all-time high with 'iPhone 6' & 'iWatch' hype at fever pitch - Page 2

post #41 of 58
Quote:
Originally Posted by daveinpublic View Post

Apples market cap is affected by their own buyout program? Right? Had they not bought back their own shares they'd be higher?

 

 

Quote:
Originally Posted by SpamSandwich View Post
 

 

There's no telling since all we really know is where the price is today, but by reducing the number of shares it theoretically drives the price of shares up. Supply and demand.

 

 

Quote:
Originally Posted by anantksundaram View Post


No, it does not. If your argument were true, the optimal strategy for all companies would be to buy out all the shares they can all the time with all the cash they have.

 

 

Quote:
Originally Posted by Sacto Joe View Post


Wrong. Apple is in an unusual position. It's stock is extremely undervalued and it has a ton of cash, with more being generated by the minute. Buying back its own stock is tantamount to investing in itself. The result is to decrease the share count, which increases the potential dividend return of the remaining shares.

Very, very few companies are ever in a position to pull this off.

Edit: There is also the tax issue. When Apple cuts a dividend check, taxes become applicable on the dividend. When it buys back its own shares, there is no tax.
 
Quote:
Originally Posted by anantksundaram View Post


You may wish to reread his post a couple of more times to try and understand it. Especially the "theoretically" and "supply and demand" parts.

As an aside, and just so that you are 'theoretically' consistent, I assume you were a fan of iCahn's arrogant assault on Apple, where he went after Apple to not only use up all its cash, but even borrow money, to fund its buybacks?

(Buybacks are obviously more tax-efficient, but taxes are irrelevant to this discussion).
 
And you, oh supercilious one, may wish to reread the post from daveinpublic to which SpamSandwich was responding a couple of more times to try to understand the complete context. It’s obvious that daveinpublic had the wrong idea. In trying to point out why, SpamSandwich may have over-generalized, but so did you, and he was closer to the mark in the specific instance of Apple than you were.
 
As regards Mr. Icahn, I’d say he runs a distant second to you for arrogance.
 
Yes, Mr. Icahn over exaggerated, but the desired effect was achieved: Apple got off the dime and started buying back its own stock in huge amounts.
 
As regards the borrowing of money, money’s cheap these days. And Apple avoided paying taxes on repatriated income by borrowing that cheap money. Finally, the stock was hugely undervalued at the time. Looked at purely as an investment, and in the context of the time, borrowing that huge amount of money and buying back their own stock at fire sale prices would have been an incredibly smart move. As it was, Apple did indeed borrow money to buy stock, albeit not nearly as much as Mr. Icahn wanted, and it’s worked out very, very nicely for them.
 
And no, taxes aren’t irrelevant to this discussion, because they aren’t irrelevant to the original question that daveinpublic asked. You may WANT them to be irrelevant, but that’s your problem.
 
One of the prime drivers for the higher stock price has been the initiation of dividends. The reason this is so is that dividends brought in a completely different type of investor. Interestingly, the huge cash stash that Apple had built up, and continues to add to, was clearly always largely earmarked for the long term investor (via dividends), since far more cash was being generated than Apple needed in its wildest dreams. Yet until they actually started cutting dividend checks, that just hadn’t sunk in.
 
But the real attraction to long term holders came about when they started buying back their own stock. Long term holders could then see that the growing pie of net income would be getting cut into fewer, ergo larger, slices.
 
Note, however, that was only true if the pie was actually growing larger, and two years ago the conventional wisdom was that Apple was through growing. That conventional wisdom has now been shown to be a complete fabrication.
 
As to how taxes fit into this, defraying taxes is just smart business when the money thus defrayed is actually shown to be growing in value. And looking at the price of AAPL, it clearly is growing. If an investor in 2013 got a bigger dividend rather than Apple buying back shares, and the investor needed to sell a share of Apple to pay his dividend tax bill, he would have received $400 for that share. If he were instead to receive that “postponed” dividend today, he would receive over $700 for that same share. True, Apple spent money to acquire those shares. But the money spent was completely offset by the reduction in net shares outstanding.
 
Next time, anantksundaram, don’t try teaching grandpa how to suck eggs….
post #42 of 58
Quote:
Originally Posted by ThePixelDoc View Post

Regardless of the Swatch objections, Apple was granted the TM... maybe because it doesn't infringe on Swatch's territory?

It looks like they have in a few countries but it says here they were denied in Iceland due to confusion with iSwatch:

http://www.zdnet.com/swatch-wont-take-apple-to-court-over-iwatch-trademark-7000029185/

"According to watson.ch, the Swiss site that first reported Swatch's challenge, Monaco has granted a trademark for iWatch, while Iceland rejected an application for iWatch since it was "confusingly similar" to iSwatch."

No iWatch for you then Iceland, your loss.
Quote:
Originally Posted by ThePixelDoc View Post

If HealthKit is the only thing "iWatch" is. How do you wrap CarPlay, HomeKit, PayKit, HealthKit, TouchID into ONE category? What would you name that?

I don't think the iWatch will just be Healthkit but I wouldn't say all the SDKs need to be in a single category. The new product category would be the iWatch product.
Quote:
Originally Posted by ThePixelDoc View Post

I wrote earlier today a reply post to digitalclips if you care to take a look. I have some wild ideas, I know... but I bet some of them are on the mark. I would like to see what you think about the points I made. Curiousity 1smile.gif

Those ideas match up well with iWatch being a platform but I don't see why they'd sell a load of sensors to 3rd parties. Apple has always been about end-to-end products. Selling inexpensive bands, chips and so on just doesn't seem like an Apple thing to do. Sensors require having a phone nearby because they need to store data. Powering by body heat is fine in theory but they'd have to be stuck directly to the body for the heat transfer to work, otherwise kinetic energy, solar or some kind of battery will be needed.

It's an interesting take on it but I think a fully fledged product is more Apple's thing.
Quote:
Originally Posted by ThePixelDoc View Post

For the exact same reasons as many have rightly criticized here and across the web, and why "the other guys" are failing so badly with their initiatives.

The Moto 360 and LG watch shouldn't fail as badly.
post #43 of 58
Quote:
Originally Posted by SpamSandwich View Post
 

 

It is pretty awesome, isn't it? My last purchase is up 730+% so far. 2008 was a very good year to go all in.

I'm in since 2007! Been quite a ride up and down and up again. I expect a 5% retrace/retreat after 9-9 but I intend to hold, subject to change if I don't like what I see/hear. I can envision $120 AAPL by January but WTF do I know? One thing for sure is this is the best product ramp of Tim Cook's tenure.

post #44 of 58
Quote:
Originally Posted by Marvin View Post

It looks like they have in a few countries but it says here they were denied in Iceland due to confusion with iSwatch:

http://www.zdnet.com/swatch-wont-take-apple-to-court-over-iwatch-trademark-7000029185/

"According to watson.ch, the Swiss site that first reported Swatch's challenge, Monaco has granted a trademark for iWatch, while Iceland rejected an application for iWatch since it was "confusingly similar" to iSwatch."

No iWatch for you then Iceland, your loss.

I would say the trademark application and it's interpretation has a lot to do with that. AFAIK you only have to list the categories you want your trademark to cover, so if " a time piece device" was anywhere in the application, it could have failed the criteria on that alone.
Quote:
I don't think the iWatch will just be Healthkit but I wouldn't say all the SDKs need to be in a single category. The new product category would be the iWatch product.
Those ideas match up well with iWatch being a platform but I don't see why they'd sell a load of sensors to 3rd parties. Apple has always been about end-to-end products. Selling inexpensive bands, chips and so on just doesn't seem like an Apple thing to do.

I don't expect the bands to be inexpensive, nor the chipsets. Actually I'm thinking of a "headless" and complete product that connects to an iOS device AND is attachable to what ever accessory you want it to. If it's a Patek, Rolex... or just a durable stretch band for kids. That's it. However, Apple and Jony Ive will most likely produce a watch face as well with all of the bells and whistles we would expect from them.
Quote:
Sensors require having a phone nearby because they need to store data.

Exactly. That's why it's a "halo" accessory for iOS devices. Efficient production can bring 30 - 50% preferred margins, and be affordable... but certainly not cheap.
Quote:
Powering by body heat is fine in theory but they'd have to be stuck directly to the body for the heat transfer to work, otherwise kinetic energy, solar or some kind of battery will be needed.

I shared some links to this theory a few weeks ago, here's some more. Maybe the time is right and the sensors and radios optimized that it's actually feasible?

http://www.forbes.com/2010/06/07/nanotech-body-heat-technology-breakthroughs-devices.html

http://io9.com/5976148/a-chip-that-turns-your-body-into-a-battery

http://www.perpetuapower.com/technology.htm

http://www.gizmag.com/heat-powered-electronics/14241/
Quote:
It's an interesting take on it but I think a fully fledged product is more Apple's thing.

I do as well. I just think the end product is going to be in a different shape and form than most people are imagining at the moment. I DO NOT think that Apple will embed all of the technology in one piece under a screen like the others or the renderings we've seen over and over. I'm thinking the face and the band with the technology will be separate. It is this way that the rumor of an iWatch costing as little as $150 or as much as a $1000 would be possible. From utility to Bling bands.
Quote:
The Moto 360 and LG watch shouldn't fail as badly.

I've got a hunch they'll be pulled off of the market after 9.9.2014 to be honest. They didn't fail. They just didn't have time to even take off before the entire airport and runway changed under their tires.
Knowing what you are talking about would help you understand why you are so wrong. By "Realistic" - AI Forum Member
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Knowing what you are talking about would help you understand why you are so wrong. By "Realistic" - AI Forum Member
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post #45 of 58
According to another leak to re/code Apple is allegedly discussing a $400 price point for their wearable. But the rumor also claims there will be a range of models at different price points with some being cheaper than $400.

If Apple figured out a way to design a device that looks like a high end traditional watch I think they could get away with a $400 price tag. As much as the tech press wants people to believe it the Moto Almost 360 doesn't look like high end anything. I do think the only way Apple gets away with that price point is if they have other models that are cheaper. If this device is positioned as an accessory to your iPhone $400 would be hard to swallow for anything other than something finely crafted using high end materials.
post #46 of 58
^^^ $399.99!

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

Reply
post #47 of 58
Quote:
Originally Posted by Rogifan View Post

As much as the tech press wants people to believe it the Moto Almost 360 doesn't look like high end anything.

The following $459 watch has a simpler design like the 360:
http://www.amazon.com/Frederique-Constant-FC-245AS4S6-Black-Leather/dp/B008PTPFEE

The following $222 watch is more like the LG G Watch:
http://www.amazon.com/Philip-Stein-34-BB-RB-Extreme-Rubber/dp/B0060JB57M

The actual price of the 360 is reported to be $249. The LG G Watch price is now reported as $229:

http://gadgets.ndtv.com/wearables/news/lg-g-watch-r-price-revealed-most-expensive-android-wear-smartwatch-so-far-583660

I think those prices are in a good range for a smartwatch and those designs are better than sports watches in that price range and match luxury watches in that range. Being able to pick a watch face will be a huge bonus because you can make the watch look like a classic luxury watch, maybe even get some parallax working to make it look like the components have depth.
Quote:
Originally Posted by Rogifan View Post

I do think the only way Apple gets away with that price point is if they have other models that are cheaper. If this device is positioned as an accessory to your iPhone $400 would be hard to swallow for anything other than something finely crafted using high end materials.

I reckon $299 would be better. Of course if the above Android watches don't work well, an iWatch at $399 that does would be an easier sell. The fact that it would be such a supplementary device though acts against it.

It would be better to have different designs for men and women. Women have smaller wrists. The Moto 360 looks pretty large on a woman's wrist:



but normal on a man's wrist:

post #48 of 58
Quote:
Originally Posted by anantksundaram View Post

It is far from my place to try and give you any investment advice whatsoever, but you should perhaps think about the tax and transaction cost implications of getting in and out (and hoping to get back in) so quickly.

I am a new ETRADE customer and my trades (of $9) are currently refunded to me (costing me nothing) as a sign-on promotion.

Also, I am not saving for an retirement account. I am hoping to make money on my recent purchase of 284 Apple shares. I am gambling on a company that I really like (Apple).

If I sell at $120 (9/9/2014) then rebuy at $100 (post 9/9/2014) and then hold until $160 (2015?), I can't see why I would make less money (even after any type of taxes) than if I held on until $160.

I see it as a 'day trader' type of move. Maybe I should just hold on no matter what happens (because I do believe in $160 coming). There is always a little letdown after the presentation and I think I could better profit from it.
post #49 of 58
Quote:
Originally Posted by KennMSr View Post

If the shares are in your retirement account just sell what you borrowed, make the wife happy, and keep the 8-15% gain as an FREE AAPL nest egg and let it slowly appreciate with dividends. If it's like my case I borrowed from my IRA mutual funds (have 60 days to return amount with out charges) will make the short term gains w/o tax consequences repay the fund what was borrowed and invest gains in 4% + funds or equities or just leave it as a cash reserve for the next market pull back.

I don't know what I said to make people think I borrowed the money. I took money from a savings account that was sitting at the bank (earning virtually nothing) and invested them in APPL whom I knew had great things planned.
post #50 of 58
Quote:
Originally Posted by anantksundaram View Post


Nothing wrong at all with financing a repurchase with a reasonable amount of debt (as, indeed, Apple has done). My question was different: whether that would mean, taken to the extreme, that iCahn's aggressive $150B repurchase proposal -- which Apple rejected -- made sense (to the person to whom I was asking the question).

My larger point, in the original reply to SS's post -- about which some people (not SS!) seemed to get super thin-skinned -- was really that such financial decisions area a matter of balance. And that there are pros and cons to the company wandering off too much in one direction or the other.

(Add).

 

 

I don't think iCahn really expected Apple to adopt his $150B buyback plan or even anything close to it. iCahn wanted make some noise pointing out that Apple don't need all that money sitting in the bank and should return some of it back to the shareholders. If I recall, AAPL was in the mid $400's (pre split) at the time  and it was a good time for a buyback plan. As it turned, Apple did come out with a buyback plan and started paying a dividend to unload some of that money. (And later split it shares 7 to 1.) It wasn't close to the $150B buyback iCahn proposed but he was happy with the plan. Whether iCahn had anything to do with the plan Apple came out with or Apple already had it in the works before iCahn made his proposal is anybody's guess. But for sure the timing couldn't have been better with AAPL now at $102.50. ($717.50 pre split) Plus the shareholders have been benefiting directly with the dividend, for over 2 years now.

post #51 of 58
Quote:
Originally Posted by Sacto Joe View Post

Next time, anantksundaram, don’t try teaching grandpa how to suck eggs….

I have zero intererest in trying to teach you anything, leave alone on the topic of how you like your eggs.
post #52 of 58
Quote:
Originally Posted by DavidW View Post


I don't think iCahn really expected Apple to adopt his $150B buyback plan or even anything close to it.

If you're going to be creating a premise for your arguments based on what you think iCahn thought -- as opposed to what we know he filed with the SEC, what he proselytized for months on end, about which he met with Tim Cook twice (and Cook had to provide public responses), etc -- I have no idea how anyone can counter-argue.
post #53 of 58
Quote:
Originally Posted by iRun262 View Post

I am a new ETRADE customer and my trades (of $9) are currently refunded to me (costing me nothing) as a sign-on promotion.

Also, I am not saving for an retirement account. I am hoping to make money on my recent purchase of 284 Apple shares. I am gambling on a company that I really like (Apple).

If I sell at $120 (9/9/2014) then rebuy at $100 (post 9/9/2014) and then hold until $160 (2015?), I can't see why I would make less money (even after any type of taxes) than if I held on until $160.

I see it as a 'day trader' type of move. Maybe I should just hold on no matter what happens (because I do believe in $160 coming). There is always a little letdown after the presentation and I think I could better profit from it.
I don't know. Do you have the ability to predict market moves and pinpoint future highs and lows? If you believe Apple has growth potential then just hold on to your position. Don't waste your time getting all stressed out trying to max out every dollar of profit from the stock market. Nobody can do it, including the great and deceptive William D. Gann. Sit back and relax... It's more fun this way.
post #54 of 58
Quote:
Originally Posted by YvesVilleneuve View Post

I don't know. Do you have the ability to predict market moves and pinpoint future highs and lows? If you believe Apple has growth potential then just hold on to your position. Don't waste your time getting all stressed out trying to max out every dollar of profit from the stock market. Nobody can do it, including the great and deceptive William D. Gann. Sit back and relax... It's more fun this way.

Holding out for the long term was my original intention. Since I've signed up with ETRADE, though, I've kind got the 'day trader' bug and have wanted to try and make some well educated guesses.

As an experiment, I tried selling 50 of my 284 shares of Apple stock one day, thinking they would get cheaper later on in the day. That didn't happen quickly enough so I got nervous and bought them back at a slightly higher price. It wasn't a big loss because my trades are currently free of commission. However it has made a little more weary of attempting any more 'day trading' type of activity on my Apple stock.

It's been going up pretty steady for the last three weeks so I've been happy. There's always the remote possibility that I could suddenly lose all I've gained if the price dropped below the $95 that I originally paid. That would be very discouraging.
post #55 of 58

Two ways to own Apple stock. Small, individual holdings, let 'em ride. 

 

Big money likes to buy it up and sell it down. Crude, stupid, just their style. Hell, more more, faster, who cares what it does to the little people!

post #56 of 58
Quote:
Originally Posted by Swift View Post

Two ways to own Apple stock. Small, individual holdings, let 'em ride. 

Big money likes to buy it up and sell it down. Crude, stupid, just their style. Hell, more more, faster, who cares what it does to the little people!

I must admit that I am not sure I completely understand what you are saying. It almost sounds like you are saying that it is unethical to buy high / sell low.

The stock market sure is certainly not straightforward.
Edited by iRun262 - 9/1/14 at 7:03am
post #57 of 58
Quote:
Originally Posted by Swift View Post

Two ways to own Apple stock. Small, individual holdings, let 'em ride. 

Big money likes to buy it up and sell it down. Crude, stupid, just their style. Hell, more more, faster, who cares what it does to the little people!

This drivel is exactly why you should ignore opinions on the Internet and learn about investing by making your own mistakes over time at your own pace.

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #58 of 58
Quote:
Originally Posted by SpamSandwich View Post

This drivel is exactly why you should ignore opinions on the Internet and learn about investing by making your own mistakes over time at your own pace.

Thank you for your post. It validates my initial approach to on-line investing.
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