I don't know what a "stock shorting fanboy" is, nor what it would have to do with the stock market. The market is simpler than people think. There are buyers and sellers. When there are more buyers, competition for shares allows sellers to raise the price. When there are more sellers, competition forces them to lower the price to entice buyers. Stock shorting (if that's what you are talking about) is just selling of shares.
Your last bit about shorting is too simple and very misleading.
What I understand about shorting a stock is selling it and buying it back at a lower price and make a profit from the difference.
The real issue here is Apple's need for cash in flows to inflate the value of the stock. Legally the largest purchasers of stock (mutual funds, and retirement funds) on the Nasdaq are limited to the amount of any one stock they will purchase...The average person is not buying Apple stock, and the result is a weird world where investing in the worlds most successful company does not return the value of investing in less successful companies.
I am largely in agreement with this statement. Note, however, that the stock popped today just by Apple's restating (in a way that the market actually heard) that they intend to funnel more or their earnings back to stockholders, one way or the other. Thus, there is a place for a much more vigorous PR effort to make some headway in bolstering the stock price. I'd like to see them actively counter as much of the negative information that's being floated as possible, in a timely fashion (that is, within hours).
As regards their burgeoning war chest, my personal preference is for Apple to use it to move the company towards becoming private. To do so means taking stock off the table every time an opportunity like the present one, where the P/E ratio gets submarined, occurs. In effect, they should put a "floor" under the P/E ratio by using their cash to buy up stock below, say, a P/E of 13.
I also see no reason to not split the stock. I'd like to see it split 20:1 personally, and then continually split to keep it under $50/share. That will bring fresh buyers into the stock.
Except Apple shares did not drop based on "bad news." It dropped when Apple reported actual numbers, which indicated the stock price need to be realigned more with reality...Apple is fine. Their products are great. Their sales are great. Their margins are high but dwindling. Based on that they are solidly in first place market cap again. There might be a shred of justification to drive them back up to a $507b company (but that is above even 'high' guidance). They don't currently justify a $700b market cap, but who knows- another awesome new surprise might change that.
Apple's reported actual numbers were misinterpreted. It was not widely known that the previous year's quarter had an extra week of earnings. Adjusting that out led to a revenue increase of 27% yoy. And their margins are not "dwindling"; they are lower due to the extraordinary number of new products Apple brought on line for fy 2013 Q1. The margins are set to improve quarter by quarter.
The reality is that, as another poster said, Apple's P/E is being compressed by its huge size, not by some supposed failure on its part. And that kind of P/E compression is close to unique. Conventional thinking like yours fails to appreciate that salient fact and thus fails to realize that Apple more than justifies a much, much larger market cap, say with a P/E on the order of Google's (presently around 24). With EPS of $44, that would equate to a price of $1,056/share. Note that this doesn't even take into account Apple's war chest of cash.
It dropped when Apple reported actual numbers, which indicated the stock price need to be realigned more with reality.
Well, that's your first bad assumption...that there is actually a tangible direct relationship between stock price movement and realignment with "reality"...whatever reality even means. Stock prices go up and down, up and down, up and down...and if every dramatic movement of price were somehow related to realignment with reality, then damn, reality is more finicky than Morris The Cat on crack.
Analysts didn't cause Apple to drop with bad news- reality caused Apple's share price to drop. Analysts and media frenzy, combined with user love, caused Apple stocks to soar way above what their actual numbers justified. When it became clear Apple couldn't meet those expectations the stock price started dropping fast. When Apple reported its actual numbers (actual sales numbers were not only below expectations, but they were below expectations even including phones Apple was giving away for free or cheap- which constituted around half of their total sales!)- that is what drove the stock down.
So, when it dropped after the last CC it was based on realignment with reality, but when it soared, it was media frenzy & user love?! Haha. Good one.
The bottom line is that anyone can make up crap about why it went up or down. I do that sometimes as well, but I know I'm mostly just entertaining myself.
Here's what I dare you to do as I do with anyone that seems to have such a wonderful justification as to AAPL's low share price...compare it to other comparable stocks in the stock market. Go ahead. And let's keep it simple, just list the other stocks with as low a PE (minus cash/SI), with as high historical and forward revenue growth, and with similar global risk (i.e. branding, customer satisfaction, industry risks, level of competition, etc.). Find 5 of those stocks. If you do, I'd be interested in buying shares in those companies as well.
Your last bit about shorting is too simple and very misleading.
What I understand about shorting a stock is selling it and buying it back at a lower price and make a profit from the difference.
You are correct about shorting. But the "market" does not know whether a seller is selling share they own or shares that are borrowed. All the market "sees" is a person offering shares for sale.
Apple doesn't really have a problem, not one that "analysts" or the competition have discovered, anyway. All the alleged problems with Apple are nitpicks compared with how Microsoft is floundering. The Surface Pro is a weird design. Looked at as a tablet that can function as a PC, there is a certain logic to it, except to function as a PC, you need a keyboard and to differentiate from ultrabooks, it has a floppy keyboard (an extra-cost option) and a kickstand, so it's a laptop you can't use on your lap. Seen as a tablet, it's too expensive. I can't see why you'd buy it over an ultrabook. Most of the comparison reviews so far are vs. the MacBook Air, and contrive to create a victory out of the MBA missing a few details (conveniently miss the point that it has a proper keyboard, and that you can buy other ultrabooks if you want more for your money).
LinkedIn is spinning circles around Apple. They may not be making any money, but they're growing like wildfire. Poor Apple. They have no growth left. Apple is DOOOOOOMED!
Comments
It's not the total profit (or the total cash-on-hand.)
It's the rate of change that gets Wall Street types excited.
Because when a company's growth rate skyrockets, investors will make mistakes.
They'll short the stock and lose money as its valuation keeps shooting up
They'll buy long just as the stock takes a dive.
It's a zero-sum game. The other guy's mistake is your opportunity for profit.
That's why there is so much spin by analysts. To convince suckers to make mistakes.
Here's a great book to read if you want to understand the stock market:
"The Theory of Poker," by David Sklansky
http://www.twoplustwo.com/books/poker/theory-of-poker/
No, you don't need to read the whole book. The fundamental theorem is pretty much
the basis of everything you do in poker. And more or less the pure application of
game theory to playing poker. Great training for playing the stocks.
Your last bit about shorting is too simple and very misleading.
What I understand about shorting a stock is selling it and buying it back at a lower price and make a profit from the difference.
Quote:
Originally Posted by Macnewsjunkie
The real issue here is Apple's need for cash in flows to inflate the value of the stock. Legally the largest purchasers of stock (mutual funds, and retirement funds) on the Nasdaq are limited to the amount of any one stock they will purchase...The average person is not buying Apple stock, and the result is a weird world where investing in the worlds most successful company does not return the value of investing in less successful companies.
I am largely in agreement with this statement. Note, however, that the stock popped today just by Apple's restating (in a way that the market actually heard) that they intend to funnel more or their earnings back to stockholders, one way or the other. Thus, there is a place for a much more vigorous PR effort to make some headway in bolstering the stock price. I'd like to see them actively counter as much of the negative information that's being floated as possible, in a timely fashion (that is, within hours).
As regards their burgeoning war chest, my personal preference is for Apple to use it to move the company towards becoming private. To do so means taking stock off the table every time an opportunity like the present one, where the P/E ratio gets submarined, occurs. In effect, they should put a "floor" under the P/E ratio by using their cash to buy up stock below, say, a P/E of 13.
I also see no reason to not split the stock. I'd like to see it split 20:1 personally, and then continually split to keep it under $50/share. That will bring fresh buyers into the stock.
Quote:
Originally Posted by Frood
Except Apple shares did not drop based on "bad news." It dropped when Apple reported actual numbers, which indicated the stock price need to be realigned more with reality...Apple is fine. Their products are great. Their sales are great. Their margins are high but dwindling. Based on that they are solidly in first place market cap again. There might be a shred of justification to drive them back up to a $507b company (but that is above even 'high' guidance). They don't currently justify a $700b market cap, but who knows- another awesome new surprise might change that.
Apple's reported actual numbers were misinterpreted. It was not widely known that the previous year's quarter had an extra week of earnings. Adjusting that out led to a revenue increase of 27% yoy. And their margins are not "dwindling"; they are lower due to the extraordinary number of new products Apple brought on line for fy 2013 Q1. The margins are set to improve quarter by quarter.
The reality is that, as another poster said, Apple's P/E is being compressed by its huge size, not by some supposed failure on its part. And that kind of P/E compression is close to unique. Conventional thinking like yours fails to appreciate that salient fact and thus fails to realize that Apple more than justifies a much, much larger market cap, say with a P/E on the order of Google's (presently around 24). With EPS of $44, that would equate to a price of $1,056/share. Note that this doesn't even take into account Apple's war chest of cash.
Quote:
Originally Posted by Frood
It dropped when Apple reported actual numbers, which indicated the stock price need to be realigned more with reality.
Well, that's your first bad assumption...that there is actually a tangible direct relationship between stock price movement and realignment with "reality"...whatever reality even means. Stock prices go up and down, up and down, up and down...and if every dramatic movement of price were somehow related to realignment with reality, then damn, reality is more finicky than Morris The Cat on crack.
Quote:
Originally Posted by Frood
Analysts didn't cause Apple to drop with bad news- reality caused Apple's share price to drop. Analysts and media frenzy, combined with user love, caused Apple stocks to soar way above what their actual numbers justified. When it became clear Apple couldn't meet those expectations the stock price started dropping fast. When Apple reported its actual numbers (actual sales numbers were not only below expectations, but they were below expectations even including phones Apple was giving away for free or cheap- which constituted around half of their total sales!)- that is what drove the stock down.
So, when it dropped after the last CC it was based on realignment with reality, but when it soared, it was media frenzy & user love?! Haha. Good one.
The bottom line is that anyone can make up crap about why it went up or down. I do that sometimes as well, but I know I'm mostly just entertaining myself.
Here's what I dare you to do as I do with anyone that seems to have such a wonderful justification as to AAPL's low share price...compare it to other comparable stocks in the stock market. Go ahead. And let's keep it simple, just list the other stocks with as low a PE (minus cash/SI), with as high historical and forward revenue growth, and with similar global risk (i.e. branding, customer satisfaction, industry risks, level of competition, etc.). Find 5 of those stocks. If you do, I'd be interested in buying shares in those companies as well.
Quote:
Originally Posted by AdamC
Your last bit about shorting is too simple and very misleading.
What I understand about shorting a stock is selling it and buying it back at a lower price and make a profit from the difference.
You are correct about shorting. But the "market" does not know whether a seller is selling share they own or shares that are borrowed. All the market "sees" is a person offering shares for sale.
Apple doesn't really have a problem, not one that "analysts" or the competition have discovered, anyway. All the alleged problems with Apple are nitpicks compared with how Microsoft is floundering. The Surface Pro is a weird design. Looked at as a tablet that can function as a PC, there is a certain logic to it, except to function as a PC, you need a keyboard and to differentiate from ultrabooks, it has a floppy keyboard (an extra-cost option) and a kickstand, so it's a laptop you can't use on your lap. Seen as a tablet, it's too expensive. I can't see why you'd buy it over an ultrabook. Most of the comparison reviews so far are vs. the MacBook Air, and contrive to create a victory out of the MBA missing a few details (conveniently miss the point that it has a proper keyboard, and that you can buy other ultrabooks if you want more for your money).
More at my blog.
Quote:
Originally Posted by AZREOSpecialist
So the argument for Apple now is "we don't suck as bad as the other guy"? Is that what you are saying, AppleInsider?
Yr right. Only 13Billion last quarter! Apple should close shop and give the money back to its shareholders!