I think its simpler... AAPL is a volatile stock that's easy to manipulate because of its click-bait nature. That means that you can play the frequent rises and drops to virtually day trade it. Takes a strong stomach or a deep wallet, but there's lots of $$ to be made playing the dips. I did it on the last visit to $80-$100 territory (when it swung predictably $5/day), but at 4X that, the risk is too big. It was only luck that kept me in on the last dip before the explosion.
Yes, this is very true, Prior to apple hitting and staying over $200/share I made lots on the ups and downs. It was buy on rumor sell on fact and watch the stock fly up and down 10% to 20% easily, Other than the most recent dip apple stock has been pretty stable, it would only bounce round less then 5%, unless you have lots of money and can buy lots of stock trying to chase the 5% upside on 50 shares is not worth it. It better now to just hold the position.
But big investors can make million on the 5% swings in a weeks time.
Apple guided revenue to $37 billion for fiscal Q1 2012 which is expected to be released sometime in the third week of January. Based on Apple's history of offering revenue guidance that is 12-18 percent below what it generally reports, that would suggest that Apple will report between $41.5 billion and $43.7 billion in revenue.
I also find it quite fascinating that people try to argue that Apple's guidance has become “more aggressive” for fiscal Q1 just because Apple guided above the street on revenue.
Well compare to previous revenu estimate, 37 billions seems a lot. I hope your right and Apple will beat this by 10%, but maybe since SJ is gone they decided to publish estimate that are closer to actual results instead of being conservative. 37 billions means Apple will beat the crap out of the iphones and ipads unit sales predictions. That also means we will have a P/E below 10 which put AAPL at extremely undervalue. We will see.
Either way I will own lots of AAPL before next quarter results.
Thank you for a clear, thorough article. Please ignore the requests to shorten and simplify.
For those who wonder about the irrational gyrations of the market and the apparent incompetence of experts, and also for those who hypothesize conspiracies of market manipulation, just read the comments here. We humans are wildly imperfect, full of peculiar, confused beliefs. And this isn't a special affliction of forum posters, it's the way we are. The market merely reflects our imperfections.
We achieve occasional moments of relative clarity when we devote quality time to a particular subject. Mr. Zaky appears to be providing such a moment. For those who are listening he offers extraordinarily valuable advice. Thanks again.
I will admit, that I haven't read this entire masturbatory article. But, I read far enough to get the impression that Andy thought he was smarter than the rest of the analysts. However I distinctly remember, last Quarter, Andy was farther off than the average analyst in predicting apples earnings. So, while he says that it's child's play to understand that Apple consistently underestimates its own revenue and profit guidance by a certain percentage, he was just as dumb, in fact worse than the average analyst last quarter. I'd be very surprised if he mentioned that fact in this article.
I will admit, that I haven't read this entire masturbatory article. But, I read far enough to get the impression that Andy thought he was smarter than the rest of the analysts. However I distinctly remember, last Quarter, Andy was farther off than the average analyst in predicting apples earnings. So, while he says that it's child's play to understand that Apple consistently underestimates its own revenue and profit guidance by a certain percentage, he was just as dumb, in fact worse than the average analyst last quarter. I'd be very surprised if he mentioned that fact in this article.
Precisely. The guy is a jerk. I'm certainly not taking lessons from someone who has a proven track record of being wrong! Everyone else may have a short memory but I certainly do not.
Precisely. The guy is a jerk. I'm certainly not taking lessons from someone who has a proven track record of being wrong! Everyone else may have a short memory but I certainly do not.
I suspect you are seeing this article due to the blogger analysts being wrong last quarter:
See:
Apple earnings smackdown: The bloggers got clobbered
I'd rather see a piece on why the numbers are what they are. For example, does Apple guide <20% low because they have 25% excess production capacity maximum? Are operating expenses $50M high because of stock-based compensation, temporary help, or whatever...
So I've been reading AI for many years now (actually since years still started with "19"). Never bothered to register before, but this is it, couldn't stand it any more. So I've registered to say this:
Interesting article, but I'm more interested in finding out why Apple is deliberately being set up to fail on earning's announcements and how this all relates to Apple's stagnant share price. It still doesn't make sense how a company can be making more and more money every quarter and the share price basically stays flat. There wouldn't seem to be any incentive to invest into a successful company that prevents a shareholder from making any significant gains over a six months period. We'll see when this quarter ends if it holds that way.
I still feel that Apple shareholders are being punished because they invested in a fundamentally solid, successful company. The stagnant share price indicates that Apple is doing something wrong, despite doing everything right. That being the case, I'd say that the stock market is either temporarily or permanently broken possibly by factions that are either gambling wildly or tightly controlling which stocks appear to be worthwhile investments. Case in point, over the past year the once stodgy IBM seems to be doing much better than Apple based on share price gains although I can't directly pinpoint why aside from Warren Buffett backing the company. That company's P/E is even slightly higher than Apple's.
IBM Pays a (paltry) dividend. Apple's revenue is approaching 0.2% of the world GDP... for "trinkets." What percentage of world economic activity can reasonably belong to Apple? Eventually, the conventional wisdom goes, Apple simply won't be able to maintain revenue growth.
Personally, I think that Apple has a few more good years of growth in it, but might need to start transitioning business strategy to being less growth-centric.
It would be a scheming, obsessive, money-mad fool with a loutish intelligence that is eternally fixated on, "What is there in it for ME?", and "Who is out there that can be turned into a straw man to blame if I don't get exactly what I want!!!!"
Watch CNBC and the other stock-touting cable channels. There's a reason why it doesn't make any sense. Lots of stock touts make a good living on confusing small investors.
Stock prices and estimates aren't based on actual earnings????
Holy Cannoli! Just wait till investors hear about this! If we're not careful people might start to think the stock market is basically just gambling, only with way more corruption!
Oh wait. The stock market is basically just gambling, only with waaay more corruption.
Like, documented, deep, deep, corruption.
Here's your stock tip kids:
Put it all on black.
I am surprised at myself for continuing to be amazed at how brutally stupid Americans are. I guess I'm a little bit American, too.
Interesting article, but I'm more interested in finding out why Apple is deliberately being set up to fail on earning's announcements and how this all relates to Apple's stagnant share price. It still doesn't make sense how a company can be making more and more money every quarter and the share price basically stays flat. There wouldn't seem to be any incentive to invest into a successful company that prevents a shareholder from making any significant gains over a six months period. We'll see when this quarter ends if it holds that way.
I still feel that Apple shareholders are being punished because they invested in a fundamentally solid, successful company. The stagnant share price indicates that Apple is doing something wrong, despite doing everything right. That being the case, I'd say that the stock market is either temporarily or permanently broken possibly by factions that are either gambling wildly or tightly controlling which stocks appear to be worthwhile investments. Case in point, over the past year the once stodgy IBM seems to be doing much better than Apple based on share price gains although I can't directly pinpoint why aside from Warren Buffett backing the company. That company's P/E is even slightly higher than Apple's.
It's easy. Speculators make money on speculating, since Apple doesn't give dividends. (And they shouldn't!) So they go for the low estimate, and buy in the shadow of the pessimistic figure, which depresses stock price, and then the rumors build up (and what's WSJ and CNBC but big rumor bloggers?) before an announcement, which drives up the price, and then they sell at the peak before the rumors of fatal flaws and -gates and Google propaganda start spreading post-announcement, or post-launch. "Jobs isn't there, they can't keep up this streak, the Microsoft Software Proprietorship gets Market Share," you know, the geniuses who thought that selling Mac clones would be a good way to expand the business, who got Apple in the bad times of the '90s. Apple has a different business model than stock-shilling. Don't get it for quick profits, but for long. I think it's a company that will be a fixture for a while if they stick to their guns. They make things that lots of people will buy, and will be happy with (odds are). Once they start worrying too much about their stock price, they become a bunch of bottom-liners, people who know balance sheets and not reality.
Comments
.... Apple's EPS guidance is entirely useless.
Understanding how to properly use Apple's guidance ...
I noted the hyperbole.
I saw the hyperbole contradicted in the very next paragraph.
I stopped reading.
I think its simpler... AAPL is a volatile stock that's easy to manipulate because of its click-bait nature. That means that you can play the frequent rises and drops to virtually day trade it. Takes a strong stomach or a deep wallet, but there's lots of $$ to be made playing the dips. I did it on the last visit to $80-$100 territory (when it swung predictably $5/day), but at 4X that, the risk is too big. It was only luck that kept me in on the last dip before the explosion.
Yes, this is very true, Prior to apple hitting and staying over $200/share I made lots on the ups and downs. It was buy on rumor sell on fact and watch the stock fly up and down 10% to 20% easily, Other than the most recent dip apple stock has been pretty stable, it would only bounce round less then 5%, unless you have lots of money and can buy lots of stock trying to chase the 5% upside on 50 shares is not worth it. It better now to just hold the position.
But big investors can make million on the 5% swings in a weeks time.
Sorry, but your response is too long and complicated. Over 140 characters.
:-)
NOTE: I stopped at the smily but that message was too short. 5 character minimum.
Apple guided revenue to $37 billion for fiscal Q1 2012 which is expected to be released sometime in the third week of January. Based on Apple's history of offering revenue guidance that is 12-18 percent below what it generally reports, that would suggest that Apple will report between $41.5 billion and $43.7 billion in revenue.
I also find it quite fascinating that people try to argue that Apple's guidance has become “more aggressive” for fiscal Q1 just because Apple guided above the street on revenue.
Well compare to previous revenu estimate, 37 billions seems a lot. I hope your right and Apple will beat this by 10%, but maybe since SJ is gone they decided to publish estimate that are closer to actual results instead of being conservative. 37 billions means Apple will beat the crap out of the iphones and ipads unit sales predictions. That also means we will have a P/E below 10 which put AAPL at extremely undervalue. We will see.
Either way I will own lots of AAPL before next quarter results.
For those who wonder about the irrational gyrations of the market and the apparent incompetence of experts, and also for those who hypothesize conspiracies of market manipulation, just read the comments here. We humans are wildly imperfect, full of peculiar, confused beliefs. And this isn't a special affliction of forum posters, it's the way we are. The market merely reflects our imperfections.
We achieve occasional moments of relative clarity when we devote quality time to a particular subject. Mr. Zaky appears to be providing such a moment. For those who are listening he offers extraordinarily valuable advice. Thanks again.
if so, please provide a link to his estimates vs. actual. i want to see how close he really is.
i love when an analyst uses the word exact followed by a range of numbers.
"by the same exact 12-18 percent every single quarter"
and then shows data for 8 quarters, where one of those is inconsistent with his "exact" findings for "every single quarter".
so it's exact, within 7%, but only 87% of the time [as proven by a HUGE sample set of 8 figures].
still, it's a good analysis, doesn't need the hyperbole.
I will admit, that I haven't read this entire masturbatory article. But, I read far enough to get the impression that Andy thought he was smarter than the rest of the analysts. However I distinctly remember, last Quarter, Andy was farther off than the average analyst in predicting apples earnings. So, while he says that it's child's play to understand that Apple consistently underestimates its own revenue and profit guidance by a certain percentage, he was just as dumb, in fact worse than the average analyst last quarter. I'd be very surprised if he mentioned that fact in this article.
Precisely. The guy is a jerk. I'm certainly not taking lessons from someone who has a proven track record of being wrong! Everyone else may have a short memory but I certainly do not.
Precisely. The guy is a jerk. I'm certainly not taking lessons from someone who has a proven track record of being wrong! Everyone else may have a short memory but I certainly do not.
I suspect you are seeing this article due to the blogger analysts being wrong last quarter:
See:
Apple earnings smackdown: The bloggers got clobbered
http://tech.fortune.cnn.com/tag/earnings-smackdown/
The WS analysts rarely admit when they are wrong -- the blogger analysts admit mistakes and try to learn from them.
See Horace as an example: http://www.asymco.com/2011/07/20/how...mber-so-wrong/
This article is probably a reminder to all blogger analysts to not blow it a second quarter in a row.
P.S. Andy is considered a PRO now. He has given a lot to the Apple community and sure isn't "wall street".
Edit: It looks like AZ was ranked #11 for Q3-11, #2 for Q2-11 and #5 for Q1-11
http://fortunebrainstormtech.files.w...8-23-38-pm.png
But, all in an interesting read.
The WS analysts rarely admit when they are wrong -- the blogger analysts admit mistakes and try to learn from them.
See Horace as an example: http://www.asymco.com/2011/07/20/how...mber-so-wrong/
That's great, wouldn't it be great if Andy did the same thing.
P.S. Andy is considered a PRO now. He has given a lot to the Apple community and sure isn't "wall street".
I'm not sure Pro means what you think it means.
Edit: It looks like AZ was ranked #11 for Q3-11, #2 for Q2-11 and #5 for Q1-11
http://fortunebrainstormtech.files.w...8-23-38-pm.png
How about Q4? You know, the quarter that he's using as an example for how badly the professional analysts screwed up?
Thanks Andy. Brilliant post.
How about Q4? You know, the quarter that he's using as an example for how badly the professional analysts screwed up?
See:
Apple earnings smackdown: The bloggers got clobbered
http://tech.fortune.cnn.com/tag/earnings-smackdown/
I still feel that Apple shareholders are being punished because they invested in a fundamentally solid, successful company. The stagnant share price indicates that Apple is doing something wrong, despite doing everything right. That being the case, I'd say that the stock market is either temporarily or permanently broken possibly by factions that are either gambling wildly or tightly controlling which stocks appear to be worthwhile investments. Case in point, over the past year the once stodgy IBM seems to be doing much better than Apple based on share price gains although I can't directly pinpoint why aside from Warren Buffett backing the company. That company's P/E is even slightly higher than Apple's.
IBM's P/E is even slightly higher than Apple's.
IBM Pays a (paltry) dividend. Apple's revenue is approaching 0.2% of the world GDP... for "trinkets." What percentage of world economic activity can reasonably belong to Apple? Eventually, the conventional wisdom goes, Apple simply won't be able to maintain revenue growth.
Personally, I think that Apple has a few more good years of growth in it, but might need to start transitioning business strategy to being less growth-centric.
Less Andy Zaky articles please.
I'd like to counter that request. Andy Zaky is great.
Watch CNBC and the other stock-touting cable channels. There's a reason why it doesn't make any sense. Lots of stock touts make a good living on confusing small investors.
Put your money in your damn mattress!
Holy Cannoli! Just wait till investors hear about this! If we're not careful people might start to think the stock market is basically just gambling, only with way more corruption!
Oh wait. The stock market is basically just gambling, only with waaay more corruption.
Like, documented, deep, deep, corruption.
Here's your stock tip kids:
Put it all on black.
I am surprised at myself for continuing to be amazed at how brutally stupid Americans are. I guess I'm a little bit American, too.
Interesting article, but I'm more interested in finding out why Apple is deliberately being set up to fail on earning's announcements and how this all relates to Apple's stagnant share price. It still doesn't make sense how a company can be making more and more money every quarter and the share price basically stays flat. There wouldn't seem to be any incentive to invest into a successful company that prevents a shareholder from making any significant gains over a six months period. We'll see when this quarter ends if it holds that way.
I still feel that Apple shareholders are being punished because they invested in a fundamentally solid, successful company. The stagnant share price indicates that Apple is doing something wrong, despite doing everything right. That being the case, I'd say that the stock market is either temporarily or permanently broken possibly by factions that are either gambling wildly or tightly controlling which stocks appear to be worthwhile investments. Case in point, over the past year the once stodgy IBM seems to be doing much better than Apple based on share price gains although I can't directly pinpoint why aside from Warren Buffett backing the company. That company's P/E is even slightly higher than Apple's.
It's easy. Speculators make money on speculating, since Apple doesn't give dividends. (And they shouldn't!) So they go for the low estimate, and buy in the shadow of the pessimistic figure, which depresses stock price, and then the rumors build up (and what's WSJ and CNBC but big rumor bloggers?) before an announcement, which drives up the price, and then they sell at the peak before the rumors of fatal flaws and -gates and Google propaganda start spreading post-announcement, or post-launch. "Jobs isn't there, they can't keep up this streak, the Microsoft Software Proprietorship gets Market Share," you know, the geniuses who thought that selling Mac clones would be a good way to expand the business, who got Apple in the bad times of the '90s. Apple has a different business model than stock-shilling. Don't get it for quick profits, but for long. I think it's a company that will be a fixture for a while if they stick to their guns. They make things that lots of people will buy, and will be happy with (odds are). Once they start worrying too much about their stock price, they become a bunch of bottom-liners, people who know balance sheets and not reality.