Per usual, you chime in when I was asking someone else a question
Oh, that was like a test then? You didn't really want an answer, you wanted to know if HE had an answer. Gotcha. No prob.
Now that you threw out some potentially incorrect analysis out there -- or perhaps not -- why don't you answer my substantive questions? Regressions on prices or returns? Total returns or just price returns? Over what time period? Monthly, weekly, or daily returns?
There is no "test" of any kind at all. If you're putting out analysis and numbers, and if I happen to know something about how those numbers should be calculated, I view it as it as my responsibility to other readers to ask you these questions.
Now that you threw out some potentially incorrect analysis out there -- or perhaps not -- why don't you answer my substantive questions? Regressions on prices or returns? Total returns or just price returns? Over what time period? Monthly, weekly, or daily returns?
There is no "test" of any kind at all. If you're putting out analysis and numbers, and if I happen to know something about how those numbers should be calculated, I view it as it as my responsibility to other readers to ask you these questions.
I already knew you'd recognize the algorithms.
I would not for a moment pretend to know as much about the subject as a published author would. Your original question had only to do with what risk analysis might be out there. I'm a bit wiser than you give me credit for and know full-well that you are the expert in this. I would only be the poor disadvantaged student so no reason to get into another silly back and forth. Your recent replies to me have been a bit pithy to say the least, showing you don't enjoy the opportunity for discussion either.
I think this is another Post 109 opportunity.
But with that said if you wanted to take the time to explain to others here how those calculations should be done I'm sure there's some reader that would appreciate it.
Now that you threw out some potentially incorrect analysis out there -- or perhaps not -- why don't you answer my substantive questions? Regressions on prices or returns? Total returns or just price returns? Over what time period? Monthly, weekly, or daily returns?
There is no "test" of any kind at all. If you're putting out analysis and numbers, and if I happen to know something about how those numbers should be calculated, I view it as it as my responsibility to other readers to ask you these questions.
I already knew you'd recognize the algorithms. I would not for a moment pretend to know as much about the subject as a published expect would. Your original question had only to do with what risk analysis might be out there. I'm a bit wiser than you give me credit for and know full-well that you are the expert, I would only be the poor student. No reason to get into another silly back and forth. Your recent replies to me have been a bit pithy to say the least, showing you don't enjoy the opportunity for discussion either.
I think this is another Post 109 opportunity.
You're being awfully defensive. But you've avoided my questions again.
Seriously, do you think it matters if it's correct? Or, is your standard for whether something is legitimate one of simply throwing out some link or doing a calculation, regardless whether they may be relevant or correct, respectively?
?If you'd like to share the details of the calculation (I don't know what you mean by 'algorithm'), I'd be happy to tell you if it's done correctly. If it is, wouldn't you like the readers to be wiser too? And if it's not, do you think it is important to redo or withdraw?
I welcome the discussion, assuming we can keep it honest!
But with that said if you wanted to take the time to explain to others here how those calculations should be done I'm sure there's some reader that would appreciate it.
Sure, happy to. Post a link to your analysis somewhere: I'd be happy to download and take a look at it, and 'explain' if necessary.
And if it's totally correct, I'd be the first to applaud you.
Heck. the advice is all over the spectrum. Some are rating it a strong buy, others a hold. IMHO go with your gut. I've not yet seen anyone that's always right. All I know is that Apple stock has been going up for years and if I wanted to play in the market (I don't) without much risk I'd probably make sure to include AAPL.
If these are true, no one lost in stock market. So, just trust your own, not anyone else. BTW, I don't believe in math for stock market. One fucking bad news, stocks sink.
"Investment managers on Wall Street believe that Apple stock is currently undervalued, but they're also reportedly concerned that shares of the company could drop even further before their eventual rebound."
What the investment managers are doing here is called "talking the stock down". Shame on AI for helping enable these Wall Street bastards.
I got completely caught up with other stuff for the past couple of hours.
I took a look at the first website you cited. It is very good. The methodology for calculation of betas is nearly fully right -- my only slight quibble is that, while they consider the total returns (i.e., dividend yields + capital gains) for the stock (in this case, AAPL), they do not seem to do so for the S&P500 before running the regression. While it may not change the coefficients much, it is a bit flawed (inconsistent) methodologically. The only other comment I would have is the monthly returns over the six-year period is a somewhat long time frame in rapidly-shifting industries. Most academics would recommend doing a regression based on weekly returns over a two- to three-year period (i.e., 104 to 156 data points).
Re. the NASDAQ calculation of the "risk metric", I have no comment except to say that it measures 'total' risk (i.e., not beta risk), and that it is a partial measure at best from the standpoint of a diversified shareholder. It is certainly not something someone would use in isolation to truly capture "risk."
If these are true, no one lost in stock market. So, just trust your own, not anyone else. BTW, I don't believe in math for stock market. One fucking bad news, stocks sink.
It's your choice whether to believe in math for the stock market (or anything else) or not, but nothing in any of the calculations that Gatorguy showed imply that "no one lost in the stock market."
The coefficients and the alphas are merely long-run means (averages). Maybe you should look up the concept of 'variance.'
Your suggestions are why the market is no longer for investing in companies, it's simply gambling that on any particular day,
Gambling is a or maybe potentially, is a skill. A good poker player understands the games odds but also is skilled at reading people. The way the stock market works of late is far more reckless than gambling.
the stock price will be at a level that makes you money in the short term (anything less than a long term investment). It's sad the entire world's economy is based on Las Vegas style gambling, which as we all know is fixed.
Unfortunately it isn't based on Las Vegas style gambling. An individual that know what he is doing can beat the odds in Vegas on some of the games. Things like poker are really games about being able to read an opponent as much as anything else. The world economy has far far more factors at play in determining how the economy will go at any minute.
While I am bullish on Apple, I also tend to agree that there is risk that Apple will linger in the 100-115 range until October.
Except it's at over 119 right now (3:18 pm EDT).
These fund managers change their minds every day so that they can occasionally be coincidentally correct. If Apple stock isn't worth what it once was, then what is? Just about every other company in the world dreams of Apple's numbers.
Unfortunately, I didn't react quickly enough. I should have bought some more when it was unnaturally down.
The emotionalism and herd mentality on Wall Street is absurd. Something bad happens in a small country that the U.S. sells almost nothing to and the market drops 2%. Oil falls because the price of a barrel falls (even though the gasoline companies make the same profits at the pump and will actually make more because people drive more when the gas price falls) and it takes stocks with it that should actually go up because lower fuel costs means higher profits for them. Etc., etc.
If you are somewhat bullish on AAPL longterm but are neutral-to-bearish in the near term, and you have a price target to buy more shares that is somewhat below current market value, then there is a tailor-made options strategy for you...
...yeah, that strategy cost me more than I would have thought possible in 2012. Specific to the context of my advice, selling puts is not a good investing neophyte strategy.
The reason I personally am skeptical in the near term is that I simply think there won't be any real news to change sentiment dramatically. Today's performance is encouraging, though. My portfolio is 75-80% Apple, and last time I calculated it there was a 2:1 leveraging with options and margin. The margin balance is at the upper end of what I am comfortable with, as is my leverage ratio.
The rule I follow with investing is to never invest with emotion. Any company can have a great product, but do terribly as a stock. Tesla is a great example. I'll buy their car, not their stock. Apple has some good products, but I don't own many shares because their stock is too volatile. When Jobs left it was a big loss and there has been legitimate speculation about the future of the company since. I'm not saying AAPL is doomed, they'll weather the current storm, but the speculation continues now because they haven't shown they can execute at the same level as they did with Jobs. I think the Watch launch would have been much different with Jobs here. The way I see it there's a lot of opportunity for Apple to pivot some of their more neglected products (Apple TV, Mac Pro, and non-touch iPods) and their less successful ones (the Watch...yeah, I said it) and get back in the innovator seat. That's when I'll buy again, but right now AAPL and Apple Inc. both look like pricey also-rans.
Comments
Per usual, you chime in when I was asking someone else a question
Oh, that was like a test then? You didn't really want an answer, you wanted to know if HE had an answer. Gotcha. No prob.
Now that you threw out some potentially incorrect analysis out there -- or perhaps not -- why don't you answer my substantive questions? Regressions on prices or returns? Total returns or just price returns? Over what time period? Monthly, weekly, or daily returns?
There is no "test" of any kind at all. If you're putting out analysis and numbers, and if I happen to know something about how those numbers should be calculated, I view it as it as my responsibility to other readers to ask you these questions.
I would not for a moment pretend to know as much about the subject as a published author would. Your original question had only to do with what risk analysis might be out there. I'm a bit wiser than you give me credit for and know full-well that you are the expert in this. I would only be the poor disadvantaged student so no reason to get into another silly back and forth. Your recent replies to me have been a bit pithy to say the least, showing you don't enjoy the opportunity for discussion either.
I think this is another Post 109 opportunity.
But with that said if you wanted to take the time to explain to others here how those calculations should be done I'm sure there's some reader that would appreciate it.
Now that you threw out some potentially incorrect analysis out there -- or perhaps not -- why don't you answer my substantive questions? Regressions on prices or returns? Total returns or just price returns? Over what time period? Monthly, weekly, or daily returns?
There is no "test" of any kind at all. If you're putting out analysis and numbers, and if I happen to know something about how those numbers should be calculated, I view it as it as my responsibility to other readers to ask you these questions.
I already knew you'd recognize the algorithms. I would not for a moment pretend to know as much about the subject as a published expect would. Your original question had only to do with what risk analysis might be out there. I'm a bit wiser than you give me credit for and know full-well that you are the expert, I would only be the poor student. No reason to get into another silly back and forth. Your recent replies to me have been a bit pithy to say the least, showing you don't enjoy the opportunity for discussion either.
I think this is another Post 109 opportunity.
You're being awfully defensive. But you've avoided my questions again.
Seriously, do you think it matters if it's correct? Or, is your standard for whether something is legitimate one of simply throwing out some link or doing a calculation, regardless whether they may be relevant or correct, respectively?
?If you'd like to share the details of the calculation (I don't know what you mean by 'algorithm'), I'd be happy to tell you if it's done correctly. If it is, wouldn't you like the readers to be wiser too? And if it's not, do you think it is important to redo or withdraw?
I welcome the discussion, assuming we can keep it honest!
But with that said if you wanted to take the time to explain to others here how those calculations should be done I'm sure there's some reader that would appreciate it.
Sure, happy to. Post a link to your analysis somewhere: I'd be happy to download and take a look at it, and 'explain' if necessary.
And if it's totally correct, I'd be the first to applaud you.
EDIT: Noticed that NASDAQ has it's own risk assessment tool. Is it worthwhile Anant?
http://www.nasdaq.com/symbol/aapl/risk
IMO my judgment error was replying in the first place. You're certainly not to be blamed. It's all good.
Up more than $4 at this point. Screw Fund managers.
Heck. the advice is all over the spectrum. Some are rating it a strong buy, others a hold. IMHO go with your gut. I've not yet seen anyone that's always right. All I know is that Apple stock has been going up for years and if I wanted to play in the market (I don't) without much risk I'd probably make sure to include AAPL.
Systematic Risk (?) Estimation
VarianceAAPL 60.10
VarianceS&P 500 19.51
CovarianceAAPL, S&P 500 18.34
Correlation CoefficientAAPL, S&P 5001 0.54
?AAPL2 0.94
?AAPL3 2.01
Calculations
1 CovarianceAAPL, S&P 500 ÷ (Standard DeviationAAPL × Standard DeviationS&P 500)
= 18.34 ÷ (7.75 × 4.42)
2 CovarianceAAPL, S&P 500 ÷ VarianceS&P 500
= 18.34 ÷ 19.51
3 AverageAAPL – ?AAPL × AverageS&P 500
= 3.04 – 0.94 × 1.10
If these are true, no one lost in stock market. So, just trust your own, not anyone else. BTW, I don't believe in math for stock market. One fucking bad news, stocks sink.
"Investment managers on Wall Street believe that Apple stock is currently undervalued, but they're also reportedly concerned that shares of the company could drop even further before their eventual rebound."
What the investment managers are doing here is called "talking the stock down". Shame on AI for helping enable these Wall Street bastards.
https://www.stock-analysis-on.net/NASDAQ/Company/Apple-Inc/DCF/CAPM
EDIT: Noticed that NASDAQ has it's own risk assessment tool. Is it worthwhile Anant?
http://www.nasdaq.com/symbol/aapl/risk
I got completely caught up with other stuff for the past couple of hours.
I took a look at the first website you cited. It is very good. The methodology for calculation of betas is nearly fully right -- my only slight quibble is that, while they consider the total returns (i.e., dividend yields + capital gains) for the stock (in this case, AAPL), they do not seem to do so for the S&P500 before running the regression. While it may not change the coefficients much, it is a bit flawed (inconsistent) methodologically. The only other comment I would have is the monthly returns over the six-year period is a somewhat long time frame in rapidly-shifting industries. Most academics would recommend doing a regression based on weekly returns over a two- to three-year period (i.e., 104 to 156 data points).
Re. the NASDAQ calculation of the "risk metric", I have no comment except to say that it measures 'total' risk (i.e., not beta risk), and that it is a partial measure at best from the standpoint of a diversified shareholder. It is certainly not something someone would use in isolation to truly capture "risk."
"I predict next earnings call Apple notifies us of another multi-billion dollar share buy back."
Agreed!
If these are true, no one lost in stock market. So, just trust your own, not anyone else. BTW, I don't believe in math for stock market. One fucking bad news, stocks sink.
It's your choice whether to believe in math for the stock market (or anything else) or not, but nothing in any of the calculations that Gatorguy showed imply that "no one lost in the stock market."
The coefficients and the alphas are merely long-run means (averages). Maybe you should look up the concept of 'variance.'
Fund managers need to come back to their senses, before they are caught with their pants down..
Unfortunately it isn't based on Las Vegas style gambling. An individual that know what he is doing can beat the odds in Vegas on some of the games. Things like poker are really games about being able to read an opponent as much as anything else. The world economy has far far more factors at play in determining how the economy will go at any minute.
While I am bullish on Apple, I also tend to agree that there is risk that Apple will linger in the 100-115 range until October.
Except it's at over 119 right now (3:18 pm EDT).
These fund managers change their minds every day so that they can occasionally be coincidentally correct. If Apple stock isn't worth what it once was, then what is? Just about every other company in the world dreams of Apple's numbers.
Unfortunately, I didn't react quickly enough. I should have bought some more when it was unnaturally down.
The emotionalism and herd mentality on Wall Street is absurd. Something bad happens in a small country that the U.S. sells almost nothing to and the market drops 2%. Oil falls because the price of a barrel falls (even though the gasoline companies make the same profits at the pump and will actually make more because people drive more when the gas price falls) and it takes stocks with it that should actually go up because lower fuel costs means higher profits for them. Etc., etc.
The reason I personally am skeptical in the near term is that I simply think there won't be any real news to change sentiment dramatically. Today's performance is encouraging, though. My portfolio is 75-80% Apple, and last time I calculated it there was a 2:1 leveraging with options and margin. The margin balance is at the upper end of what I am comfortable with, as is my leverage ratio.
The rule I follow with investing is to never invest with emotion. Any company can have a great product, but do terribly as a stock. Tesla is a great example. I'll buy their car, not their stock. Apple has some good products, but I don't own many shares because their stock is too volatile. When Jobs left it was a big loss and there has been legitimate speculation about the future of the company since. I'm not saying AAPL is doomed, they'll weather the current storm, but the speculation continues now because they haven't shown they can execute at the same level as they did with Jobs. I think the Watch launch would have been much different with Jobs here. The way I see it there's a lot of opportunity for Apple to pivot some of their more neglected products (Apple TV, Mac Pro, and non-touch iPods) and their less successful ones (the Watch...yeah, I said it) and get back in the innovator seat. That's when I'll buy again, but right now AAPL and Apple Inc. both look like pricey also-rans.
While I am bullish on Apple, I also tend to agree that there is risk that Apple will linger in the 100-115 range until October.
LOL.
I might add (and I am right
), that there is risk that Apple shares will fall to 0.01 price until December.
Your naive allocation is funny because you believe that you are smart
Well, you might be right. But there is a risk that you are not. 