His final statement is correct in that Apple did very well, just not as well as was expected by Wall Street.
In his example, Apple could increase revenue's 400%, but if Wall Street had expected them to increase it 500%, it's a disappointment. The share price was based on the expectations (inflated) and thus returns closer to where it should be based on the hard numbers released.
Perception is reality, and even though I'm not a fan of analysts, the fact is that the stock price was based on a combination of their expectations and Apple's guidance (plus other external factors and market conditions). If the analysts had been more conservative, the stock price likely would have been lower to start with.
Yes, but the truth of the matter is the most conservative/pessimistic analysts were much closer to the mark this time. We've heard these analysts ridiculed here in the past for always being low. So what's the explanation now? Just the opposite logic is applied.
Yes, but the truth of the matter is the most conservative/pessimistic analysts were much closer to the mark this time. We've heard these analysts ridiculed here in the past for always being low. So what's the explanation now? Just the opposite logic is applied.
The difference is that in the past, the analysts' projections were reasonable based on Apple's history and Apple's guidance. This time, the projections were far out of line with Apple's guidance and history. Basically, Apple has beaten their own guidance by 12-18% each quarter (with one exception) for the last 2 years. As long as the analysts were less than 12-18% above Apple's guidance, then Apple could still beat the Analysts' projections. This time, however, the analysts were projecting a number about 50-60% above Apple's guidance - which is clearly absurd and way out of line with historical results.
The analysts blew it. If they had continued to estimate a number based on history, there wouldn't be an issue.
Yeah, I'd love to see their earnings call after a move like that. Incredible how you would be so disconnected from reality as to advocate financial suicide. If there's no other way around it. Most of us, who aren't living in lala-land like yourself, recognize that producing their products in the US is an impossibility.
Yeah I suspect instead of making Insane record profits it would only be "insane" record profits without the capital "I". However, from a macro economic standpoint and the health of the country that enabled them to design such great products it would be good. The cut in profits would be a fraction of their total profit - far from being an "impossibility"
Instead of living in lala-land I am able to see the big picture and see that the track we are on in this country is neither sustainable or good. As a stockholder I would gladly rather see a slightly smaller profit and be able to buy my Apple products made in America.
I think the link jragosta included was one of the most relevant here. This moment offers an opportunity for a sober reassessment of fundamentals, which have been sorely off base. Not Apple's fundamentals, which have generally been proven sound, but the fundamentals of analysis.
In recent years Apple's growth rate caused analysts to get completely wild with their predictions, and when Apple beat even those the predictions the next round got even more wild, continuing into a stratosphere that risked becoming unrealistic given the complex factors involved. At some point, it was inevitable that expectations return to Earth.
IMNSHO, the problem here isn't Apple at all, but the same sort of "irrational exuberance" that led to the dot-bomb bust. The details differ, but the unrealistic expectations are quite similar.
At some point, the so-called professionals entrusted with other people's money need to slow down and look at the big picture.
This doesn't mean Apple needs to slow down; they're fine. It's the analysts who need to get a grip and understand that stratospheric growth isn't infinitely sustainable in any economy, not Apple's nor anyone else's.
All systems are cyclic, even Apple's. That Apple's last quarter was merely great rather than insanely great isn't Apple's fault, but merely the fault of the insane.
I think both of you miss the point of what I was saying. No matter how you cut it, it is new that the pessimists, the ones who are generally ridiculed on these boards for not being giddy enough, were right this time. It is also new that the unaffiliated analysts, who are generally lionized here for being so much more accurate than the (as you've put it) the "so-called professionals," were far off the mark.
Also, none of this really creates any kind of "issue." Investors read the guidance and make pre-earnings investing decisions accordingly. The bullish estimates caused the stock to rise to record levels (and I don't recall anyone complaining about that). If the company doesn't produce those earnings, then the stock is going to get beaten back down some. The same is true for AAPL or any other stock. If that's a problem for you, then you aren't a person who should be buying individual stocks, because it will drive you crazy on a daily basis.
So? I'm really not following this line of argument.
Apple has managed to plow through some powerful economic headwinds for several years running. Can they continue to do so? Is this earnings report a sign that they can't? That's the question I am asking. I don't pretend to know the answer.
Millmoss, maybe holding this stock is more than you can handle. Your worrying is sometimes grating. Just sell already.
Millmoss, maybe holding this stock is more than you can handle. Your worrying is sometimes grating. Just sell already.
No thanks. I've been in AAPL since 1997. Ignorance was not the reason for my investing in the first place, and it won't play any part in any decisions to hold or sell. Of course, YMMV. In fact I'm quite sure it does.
Comments
His final statement is correct in that Apple did very well, just not as well as was expected by Wall Street.
In his example, Apple could increase revenue's 400%, but if Wall Street had expected them to increase it 500%, it's a disappointment. The share price was based on the expectations (inflated) and thus returns closer to where it should be based on the hard numbers released.
Perception is reality, and even though I'm not a fan of analysts, the fact is that the stock price was based on a combination of their expectations and Apple's guidance (plus other external factors and market conditions). If the analysts had been more conservative, the stock price likely would have been lower to start with.
Yes, but the truth of the matter is the most conservative/pessimistic analysts were much closer to the mark this time. We've heard these analysts ridiculed here in the past for always being low. So what's the explanation now? Just the opposite logic is applied.
Yes, but the truth of the matter is the most conservative/pessimistic analysts were much closer to the mark this time. We've heard these analysts ridiculed here in the past for always being low. So what's the explanation now? Just the opposite logic is applied.
The difference is that in the past, the analysts' projections were reasonable based on Apple's history and Apple's guidance. This time, the projections were far out of line with Apple's guidance and history. Basically, Apple has beaten their own guidance by 12-18% each quarter (with one exception) for the last 2 years. As long as the analysts were less than 12-18% above Apple's guidance, then Apple could still beat the Analysts' projections. This time, however, the analysts were projecting a number about 50-60% above Apple's guidance - which is clearly absurd and way out of line with historical results.
The analysts blew it. If they had continued to estimate a number based on history, there wouldn't be an issue.
http://tech.fortune.cnn.com/2011/10/...oesn?t-matter/
Oracle puts all its faith into databases.
Microsoft puts all its faith into office.
Google puts all its faith into a search engine.
They seem to be doing quite alright with themselves.
Not quite the same thing, really.
Yeah, I'd love to see their earnings call after a move like that. Incredible how you would be so disconnected from reality as to advocate financial suicide. If there's no other way around it. Most of us, who aren't living in lala-land like yourself, recognize that producing their products in the US is an impossibility.
Yeah I suspect instead of making Insane record profits it would only be "insane" record profits without the capital "I". However, from a macro economic standpoint and the health of the country that enabled them to design such great products it would be good. The cut in profits would be a fraction of their total profit - far from being an "impossibility"
http://thesocietypages.org/socimages...aving-america/
Instead of living in lala-land I am able to see the big picture and see that the track we are on in this country is neither sustainable or good. As a stockholder I would gladly rather see a slightly smaller profit and be able to buy my Apple products made in America.
I think the link jragosta included was one of the most relevant here. This moment offers an opportunity for a sober reassessment of fundamentals, which have been sorely off base. Not Apple's fundamentals, which have generally been proven sound, but the fundamentals of analysis.
In recent years Apple's growth rate caused analysts to get completely wild with their predictions, and when Apple beat even those the predictions the next round got even more wild, continuing into a stratosphere that risked becoming unrealistic given the complex factors involved. At some point, it was inevitable that expectations return to Earth.
IMNSHO, the problem here isn't Apple at all, but the same sort of "irrational exuberance" that led to the dot-bomb bust. The details differ, but the unrealistic expectations are quite similar.
At some point, the so-called professionals entrusted with other people's money need to slow down and look at the big picture.
This doesn't mean Apple needs to slow down; they're fine. It's the analysts who need to get a grip and understand that stratospheric growth isn't infinitely sustainable in any economy, not Apple's nor anyone else's.
All systems are cyclic, even Apple's. That Apple's last quarter was merely great rather than insanely great isn't Apple's fault, but merely the fault of the insane.
I think both of you miss the point of what I was saying. No matter how you cut it, it is new that the pessimists, the ones who are generally ridiculed on these boards for not being giddy enough, were right this time. It is also new that the unaffiliated analysts, who are generally lionized here for being so much more accurate than the (as you've put it) the "so-called professionals," were far off the mark.
Also, none of this really creates any kind of "issue." Investors read the guidance and make pre-earnings investing decisions accordingly. The bullish estimates caused the stock to rise to record levels (and I don't recall anyone complaining about that). If the company doesn't produce those earnings, then the stock is going to get beaten back down some. The same is true for AAPL or any other stock. If that's a problem for you, then you aren't a person who should be buying individual stocks, because it will drive you crazy on a daily basis.
So? I'm really not following this line of argument.
Apple has managed to plow through some powerful economic headwinds for several years running. Can they continue to do so? Is this earnings report a sign that they can't? That's the question I am asking. I don't pretend to know the answer.
Millmoss, maybe holding this stock is more than you can handle. Your worrying is sometimes grating. Just sell already.
Millmoss, maybe holding this stock is more than you can handle. Your worrying is sometimes grating. Just sell already.
No thanks. I've been in AAPL since 1997. Ignorance was not the reason for my investing in the first place, and it won't play any part in any decisions to hold or sell. Of course, YMMV. In fact I'm quite sure it does.