1) Changing the question to suit your answer is plain silly.
I'm not changing the question, there never was a question to begin with. MacRulez commented that if Apple was approaching Exxon that this was evidence of a bubble - I pointed out it was in fact merely evidence of retained earnings.
Then a bunch of people insisted that dividends were irrelevant - I was simply trying to get the point across that they are not.
Quote:
2) There's not much to ignore in your first three paras. As an aside, past shareholder payouts have nothing to do with the stock price, which are based on the expected future evolution of fundamentals.
If those payouts had not occurred then the firm would have retained the cash, and that would have an impact on the current share price. Saying that past dividends have no effect on current share price is as wrong as saying that past share splits have no effect on current share price. There is a reason why the historical equity price databases I worked on had a full set of corporate actions including dividends.
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Here's a simple question: Tomorrow, if XOM were to announce an increase its dividends, do you think it is more likely that its stock price would rise or fall?
Either is entirely plausible, because the result would be entirely psychological based on whether investors viewed it as an indication of financial strength or an indication of few investment opportunities. It's completely irrelevant to your point though so why on earth did you ask?
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A small request: Please refrain from making bombastic statements about things which you do not seem to have thought through well.
I suggest you go and work for a decade or so in finance, and then come back to me. Actually in your case it might take longer.
But the declining cash flows from iPods could slow the rate of growth somewhat.
There is no declining cash flow from ipods. If anything the growth of the ipod has increased 10 fold. The ipod is in every iphone and ipad sold today. Why would you buy a stand alone ipod when you can get it and a lot more for your money. Naysayers would like you to believe that Apple is loosing somewhere. They are not.
Exxon has a commodity that is used by every industry that I can think of. For Apple to even be at the verge of overtaking and being compared to a company as big as Exxon speaks volumes about how efficiently Apple runs its' business. You can complain about Apple all you want, but it is great to see an American company succeeding and doing it with quality products. I bought in at $24.00 a share and I have held on during the good and bad times. My patience is paying off.
There are too many whiner's in this forum, both Apple and non Apple fan's that don't get the big picture of what Apple is trying to accomplish. Its funny when people complain about Apple and then they turn around and try to copy everything they do. We live in a society of hypocrites, but Apple is laughing all the way to the bank.
There is no declining cash flow from ipods. If anything the growth of the ipod has increased 10 fold. The ipod is in every iphone and ipad sold today. Why would you buy a stand alone ipod when you can get it and a lot more for your money. Naysayers would like you to believe that Apple is loosing somewhere. They are not.
You are being dense, either intentionally or otherwise. Apple has a product category called iPod, they report numbers on it. That category has declining revenues. Apple does not include the iPhone in that product category, so neither should we when we're discussing Apple's finances.
It's not a problem that the iPod line is seeing decreased revenues, Apple doesn't much care and neither do investors because the rest of the business is doing so well - but there's no reason to pretend that it isn't the case.
I'm not changing the question, there never was a question to begin with. MacRulez commented that if Apple was approaching Exxon that this was evidence of a bubble - I pointed out it was in fact merely evidence of retained earnings.
LOL. You really should read what you wrote. You're the one that said QUOTE: "...the correct question isn't 'which company.....' UNQUOTE. I was simply quoting you in my response.
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Originally Posted by cloudgazer
If those payouts had not occurred then the firm would have retained the cash, and that would have an impact on the current share price.
You bet it would. I would depend on the investment decisions they made with their retained cash -- which could have added, retained, or subtracted value.
Quote:
Originally Posted by cloudgazer
Then a bunch of people insisted that dividends were irrelevant - I was simply trying to get the point across that they are not.
Don't exaggerate. A "bunch of people" didn't. One person -- melgross -- did.
Quote:
Originally Posted by cloudgazer
.... is as wrong as saying that past share splits have no effect on current share price.
Stock splits are irrelevant, whether in the past or the future. It's like my giving you two $5 bills for a $10 bill.
Quote:
Originally Posted by cloudgazer
There is a reason why the historical equity price databases I worked on had a full set of corporate actions including dividends
Of course they do. That's because dividends add to -- not subtract from -- measured returns. Total shareholder return is a function of both capital gains and dividend yields. It's possible you really did not understand the numbers you were crunching.
Quote:
Originally Posted by cloudgazer
Either is entirely plausible, because the result would be entirely psychological based on whether investors viewed it as an indication of financial strength or an indication of few investment opportunities.
Yes, either is plausible, but only one is highly probable. A massive amount of empirical evidence (and academic literature) finds that increases in dividend payout rates have a solidly positive announcement effect, on average. (PM me if you'd like the references -- I don't want to bore the folks here).
Quote:
Originally Posted by cloudgazer
It's completely irrelevant to your point though so why on earth did you ask?
It's not at all irrelevant. Your point -- an incorrect one -- has been that dividends lower value. So, according to you, higher dividends should lower value even more, no? Hence the question.
Quote:
Originally Posted by cloudgazer
I suggest you go and work for a decade or so in finance, and then come back to me. Actually in your case it might take longer.
If you told me who you worked for, I would probably avoid doing business with them if that's what a "decade of finance" with them has wrought.
Actually, don't tell me. You don't want to embarrass them in public.
It's not at all irrelevant. Your point -- an incorrect one -- has been that dividends lower value. So, according to you, higher dividends should lower value even more, no? Hence the question.
But they do, because they diminish the retained earnings. They lower market cap, once paid, even you admit this, then you deny it again. I'm not quite sure why. The fact that an announcement of future dividends may or may not increase the current market cap has NO bearing on what past dividends has done to the current market cap.
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.... is as wrong as saying that past share splits have no effect on current share price.
Stock splits are irrelevant, whether in the past or the future. It's like my giving you two $5 bills for a $10 bill.
Maybe this is your problem - an inability to read. I didn't say market cap, I said share price - stock splits don't affect that? Wow.
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it's not at all irrelevant. Your point -- an incorrect one -- has been that dividends lower value. So, according to you, higher dividends should lower value even more, no? Hence the question.
The reaction of the market to a declared future dividend is completely irrelevant to the effect on the market cap of a firm of a series of past dividends. The former is market psychology, the latter is stock fundamentals.
If Apple declared a special one time dividend of 50 billion tomorrow, do you really not think that once it went ex-dividend the market cap would be lower? Of course you don't - so why are you arguing? Because presumably you can't bear to admit that you're wrong.
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As I said, stop being a half-informed bombast.
Wow you really hate the fact that you keep losing these arguments eh? Hate leads to suffering you know.
You are being dense, either intentionally or otherwise. Apple has a product category called iPod, they report numbers on it. That category has declining revenues. Apple does not include the iPhone in that product category, so neither should we when we're discussing Apple's finances.
It's not a problem that the iPod line is seeing decreased revenues, Apple doesn't much care and neither do investors because the rest of the business is doing so well - but there's no reason to pretend that it isn't the case.
Hard to say at this point. The whole tablets-running-OSes-designed-for-phones category is barely more than a year old, and the trend is looking somewhat similar to early growth rates for Android phones:
Given that there still isn't a single competing tablet of matching overall quality, and as you note the better Android tablets are priced roughly on par with iPad, that drop probably seems likely related to lower-priced Android options.
Looking forward:
Apple's Tablet OS Share Will Shrink To 47 Percent By 2015
Hard to say at this point. The whole tablets-running-OSes-designed-for-phones category is barely more than a year old, and the trend is looking somewhat similar to early growth rates for Android phones:
Q2 2010: 94.3%
Q3 2010: 93%
Q4 2010: 73%
Q2 2011: 61.3%
Those are shipments, not sales. In Apple's case we know that the two are equivalent because we know how very little they have in the channel, but the Android tablets are a bigger problem.
In the last quarter Apple sold 9.25million iPads, so that would imply around 6 million android tablets sold last quarter alone.
But there are only 0.9% of Android devices running hummingbird, or around 1.17million in TOTAL
So either there was a LOT of channel stuffing going on, or the 7inch android tablets are a huge success compared to the 10 inch.
In fact we can put an upper bound on the success of the 7inch tablets, they can't have sold more than 3.64 million in TOTAL - and that's assuming that absolutely none of the 4inch + android phones count as large screen devices.
Let's just hope that Apple isn't vilified once it becomes the largest market cap company as Exxon-Mobil is. Of course, these two companies are in very different industries and Exxon is in a much dirtier industry. That said, Apple will have to ensure working conditions are suitable in their contracted manufacturing plants so that they don't have to deal with the allegations of worker abuse; otherwise, Apple will be looked at in the same light as Exxon.
Of course it relates to the dividend - whenever a firm pays a divided the market cap drops by a related amount, normally a little under the dividend amount.
If Exxon hadn't been paying dividends all these years they'd have even more cash than they do, and an appropriately larger market cap. Alternatively if Apple was paying out a dividend its market cap would be growing less quickly.
I don't see how we can equate this one way or the other. I've read some economic writing that claim many things about dividends, stock buybacks, etc. But I've never seen amy evidence that any of it matters in the long run.
We've got people stating that if Apple offers a dividend, the stock will go higher, as that will make it more desirable.
In the case of Exxon, over the years their market cap has risen and fallen with oil prices. What do you think will happen to their stock if oil goes to 125, what about if it drops to 75?
We'll have a good experiment shortly, as HPs' board has given Apodeker $10 billion for a buyback, another vehicle for the purpose of raising stock prices and therefor market cap.
Hard to say at this point. The whole tablets-running-OSes-designed-for-phones category is barely more than a year old, and the trend is looking somewhat similar to early growth rates for Android phones:
Given that there still isn't a single competing tablet of matching overall quality, and as you note the better Android tablets are priced roughly on par with iPad, that drop probably seems likely related to lower-priced Android options.
Looking forward:
Apple's Tablet OS Share Will Shrink To 47 Percent By 2015
But of course we can discount that because Gartner is just "manipulating Apple's stock".
Those are completely worthless numbers. As has been pointed out in a number of articles, "shipped"doesn't equal "sold". The fact that more manufactures are making tablets, and shipping them means little. When you consider that the only tablet maker so far who is willing to state how many they sold is Apple, you must take all the others numbers with a dose of salt.
I'm willing to bet that Apples' marketshare right now is a good 85%, if not more.
Comments
1) Changing the question to suit your answer is plain silly.
I'm not changing the question, there never was a question to begin with. MacRulez commented that if Apple was approaching Exxon that this was evidence of a bubble - I pointed out it was in fact merely evidence of retained earnings.
Then a bunch of people insisted that dividends were irrelevant - I was simply trying to get the point across that they are not.
2) There's not much to ignore in your first three paras. As an aside, past shareholder payouts have nothing to do with the stock price, which are based on the expected future evolution of fundamentals.
If those payouts had not occurred then the firm would have retained the cash, and that would have an impact on the current share price. Saying that past dividends have no effect on current share price is as wrong as saying that past share splits have no effect on current share price. There is a reason why the historical equity price databases I worked on had a full set of corporate actions including dividends.
Here's a simple question: Tomorrow, if XOM were to announce an increase its dividends, do you think it is more likely that its stock price would rise or fall?
Either is entirely plausible, because the result would be entirely psychological based on whether investors viewed it as an indication of financial strength or an indication of few investment opportunities. It's completely irrelevant to your point though so why on earth did you ask?
A small request: Please refrain from making bombastic statements about things which you do not seem to have thought through well.
I suggest you go and work for a decade or so in finance, and then come back to me. Actually in your case it might take longer.
Good points.
But the declining cash flows from iPods could slow the rate of growth somewhat.
There is no declining cash flow from ipods. If anything the growth of the ipod has increased 10 fold. The ipod is in every iphone and ipad sold today. Why would you buy a stand alone ipod when you can get it and a lot more for your money. Naysayers would like you to believe that Apple is loosing somewhere. They are not.
Exxon has a commodity that is used by every industry that I can think of. For Apple to even be at the verge of overtaking and being compared to a company as big as Exxon speaks volumes about how efficiently Apple runs its' business. You can complain about Apple all you want, but it is great to see an American company succeeding and doing it with quality products. I bought in at $24.00 a share and I have held on during the good and bad times. My patience is paying off.
There are too many whiner's in this forum, both Apple and non Apple fan's that don't get the big picture of what Apple is trying to accomplish. Its funny when people complain about Apple and then they turn around and try to copy everything they do. We live in a society of hypocrites, but Apple is laughing all the way to the bank.
PS. I wouldn't pay dividens to cry babies either!
There is no declining cash flow from ipods.
I should have phrased that as a declining rate of growth in cash flow from iPods. My bad.
I should have phrased that as a declining rate of growth in cash flow from iPods. My bad.
No, you were right the first time, iPod revenue is declining - it's not terribly relevant to the stock but it's true.
There is no declining cash flow from ipods. If anything the growth of the ipod has increased 10 fold. The ipod is in every iphone and ipad sold today. Why would you buy a stand alone ipod when you can get it and a lot more for your money. Naysayers would like you to believe that Apple is loosing somewhere. They are not.
You are being dense, either intentionally or otherwise. Apple has a product category called iPod, they report numbers on it. That category has declining revenues. Apple does not include the iPhone in that product category, so neither should we when we're discussing Apple's finances.
It's not a problem that the iPod line is seeing decreased revenues, Apple doesn't much care and neither do investors because the rest of the business is doing so well - but there's no reason to pretend that it isn't the case.
I'm not changing the question, there never was a question to begin with. MacRulez commented that if Apple was approaching Exxon that this was evidence of a bubble - I pointed out it was in fact merely evidence of retained earnings.
LOL. You really should read what you wrote. You're the one that said QUOTE: "...the correct question isn't 'which company.....' UNQUOTE. I was simply quoting you in my response.
If those payouts had not occurred then the firm would have retained the cash, and that would have an impact on the current share price.
You bet it would. I would depend on the investment decisions they made with their retained cash -- which could have added, retained, or subtracted value.
Then a bunch of people insisted that dividends were irrelevant - I was simply trying to get the point across that they are not.
Don't exaggerate. A "bunch of people" didn't. One person -- melgross -- did.
.... is as wrong as saying that past share splits have no effect on current share price.
Stock splits are irrelevant, whether in the past or the future. It's like my giving you two $5 bills for a $10 bill.
There is a reason why the historical equity price databases I worked on had a full set of corporate actions including dividends
Of course they do. That's because dividends add to -- not subtract from -- measured returns. Total shareholder return is a function of both capital gains and dividend yields. It's possible you really did not understand the numbers you were crunching.
Either is entirely plausible, because the result would be entirely psychological based on whether investors viewed it as an indication of financial strength or an indication of few investment opportunities.
Yes, either is plausible, but only one is highly probable. A massive amount of empirical evidence (and academic literature) finds that increases in dividend payout rates have a solidly positive announcement effect, on average. (PM me if you'd like the references -- I don't want to bore the folks here).
It's completely irrelevant to your point though so why on earth did you ask?
It's not at all irrelevant. Your point -- an incorrect one -- has been that dividends lower value. So, according to you, higher dividends should lower value even more, no? Hence the question.
I suggest you go and work for a decade or so in finance, and then come back to me. Actually in your case it might take longer.
If you told me who you worked for, I would probably avoid doing business with them if that's what a "decade of finance" with them has wrought.
Actually, don't tell me. You don't want to embarrass them in public.
As I said, stop being a half-informed bombast.
It's not at all irrelevant. Your point -- an incorrect one -- has been that dividends lower value. So, according to you, higher dividends should lower value even more, no? Hence the question.
But they do, because they diminish the retained earnings. They lower market cap, once paid, even you admit this, then you deny it again. I'm not quite sure why. The fact that an announcement of future dividends may or may not increase the current market cap has NO bearing on what past dividends has done to the current market cap.
.... is as wrong as saying that past share splits have no effect on current share price.
Stock splits are irrelevant, whether in the past or the future. It's like my giving you two $5 bills for a $10 bill.
Maybe this is your problem - an inability to read. I didn't say market cap, I said share price - stock splits don't affect that? Wow.
it's not at all irrelevant. Your point -- an incorrect one -- has been that dividends lower value. So, according to you, higher dividends should lower value even more, no? Hence the question.
The reaction of the market to a declared future dividend is completely irrelevant to the effect on the market cap of a firm of a series of past dividends. The former is market psychology, the latter is stock fundamentals.
If Apple declared a special one time dividend of 50 billion tomorrow, do you really not think that once it went ex-dividend the market cap would be lower? Of course you don't - so why are you arguing? Because presumably you can't bear to admit that you're wrong.
As I said, stop being a half-informed bombast.
Wow you really hate the fact that you keep losing these arguments eh? Hate leads to suffering you know.
Hate leads to suffering you know.
Now, you're the Buddha too!
Now, you're the Buddha too!
I see myself more as a really tall Yoda. For Buddha existence is suffering, no hate required.
Never was a response of "whatever" more deserved.
That's exactly what the shoeshine boy said.
Good points.
But the declining cash flows from iPods could slow the rate of growth somewhat.
?? I doubt it. I'm pretty sure their growth in other areas will make the iPod practically irrelevant.
You are being dense, either intentionally or otherwise. Apple has a product category called iPod, they report numbers on it. That category has declining revenues. Apple does not include the iPhone in that product category, so neither should we when we're discussing Apple's finances.
It's not a problem that the iPod line is seeing decreased revenues, Apple doesn't much care and neither do investors because the rest of the business is doing so well - but there's no reason to pretend that it isn't the case.
Pull your head out of the clouds.
Pull your head out of the clouds.
It isn't in the clouds, it's currently in Apple and MS's last quarterly SEC filing. You should try reading one someday.
Hard to say at this point. The whole tablets-running-OSes-designed-for-phones category is barely more than a year old, and the trend is looking somewhat similar to early growth rates for Android phones:
Q2 2010: 94.3%
Q3 2010: 93%
Q4 2010: 73%
Q2 2011: 61.3%
http://www.macrumors.com/2011/03/10/...-pegged-at-73/
http://www.eweek.com/c/a/Desktops-an...egy-Analytics/
http://tablets-planet.com/2011/07/21...roid-grew-big/
Given that there still isn't a single competing tablet of matching overall quality, and as you note the better Android tablets are priced roughly on par with iPad, that drop probably seems likely related to lower-priced Android options.
Looking forward:
Apple's Tablet OS Share Will Shrink To 47 Percent By 2015
http://techcrunch.com/2011/04/11/cha...rcent-by-2015/
But of course we can discount that because Gartner is just "manipulating Apple's stock".
dude
what do you mean ?
Hard to say at this point. The whole tablets-running-OSes-designed-for-phones category is barely more than a year old, and the trend is looking somewhat similar to early growth rates for Android phones:
Q2 2010: 94.3%
Q3 2010: 93%
Q4 2010: 73%
Q2 2011: 61.3%
Those are shipments, not sales. In Apple's case we know that the two are equivalent because we know how very little they have in the channel, but the Android tablets are a bigger problem.
In the last quarter Apple sold 9.25million iPads, so that would imply around 6 million android tablets sold last quarter alone.
But there are only 0.9% of Android devices running hummingbird, or around 1.17million in TOTAL
http://developer.android.com/resourc...-versions.html
So either there was a LOT of channel stuffing going on, or the 7inch android tablets are a huge success compared to the 10 inch.
In fact we can put an upper bound on the success of the 7inch tablets, they can't have sold more than 3.64 million in TOTAL - and that's assuming that absolutely none of the 4inch + android phones count as large screen devices.
Of course it relates to the dividend - whenever a firm pays a divided the market cap drops by a related amount, normally a little under the dividend amount.
If Exxon hadn't been paying dividends all these years they'd have even more cash than they do, and an appropriately larger market cap. Alternatively if Apple was paying out a dividend its market cap would be growing less quickly.
I don't see how we can equate this one way or the other. I've read some economic writing that claim many things about dividends, stock buybacks, etc. But I've never seen amy evidence that any of it matters in the long run.
We've got people stating that if Apple offers a dividend, the stock will go higher, as that will make it more desirable.
In the case of Exxon, over the years their market cap has risen and fallen with oil prices. What do you think will happen to their stock if oil goes to 125, what about if it drops to 75?
We'll have a good experiment shortly, as HPs' board has given Apodeker $10 billion for a buyback, another vehicle for the purpose of raising stock prices and therefor market cap.
Your link wants me to sign in, so I'm not sure what point you were making with it.
I don't know what stocks deserve to do, only what they actually do.
Strange, others have gotten to it.
And that an odd statement.
Hard to say at this point. The whole tablets-running-OSes-designed-for-phones category is barely more than a year old, and the trend is looking somewhat similar to early growth rates for Android phones:
Q2 2010: 94.3%
Q3 2010: 93%
Q4 2010: 73%
Q2 2011: 61.3%
http://www.macrumors.com/2011/03/10/...-pegged-at-73/
http://www.eweek.com/c/a/Desktops-an...egy-Analytics/
http://tablets-planet.com/2011/07/21...roid-grew-big/
Given that there still isn't a single competing tablet of matching overall quality, and as you note the better Android tablets are priced roughly on par with iPad, that drop probably seems likely related to lower-priced Android options.
Looking forward:
Apple's Tablet OS Share Will Shrink To 47 Percent By 2015
http://techcrunch.com/2011/04/11/cha...rcent-by-2015/
But of course we can discount that because Gartner is just "manipulating Apple's stock".
Those are completely worthless numbers. As has been pointed out in a number of articles, "shipped"doesn't equal "sold". The fact that more manufactures are making tablets, and shipping them means little. When you consider that the only tablet maker so far who is willing to state how many they sold is Apple, you must take all the others numbers with a dose of salt.
I'm willing to bet that Apples' marketshare right now is a good 85%, if not more.