Apple pretty much confirmed the supply chain noise when they forecasted the first quarterly YOY sales decline for iPhone.
"Supply chain noise" predicted a major drop in Q2 and a significant guidance miss in Q1. It was wrong on both counts.
On the other hand, it was already widely known that there would be a "difficult compare" and widely believed that the 6s would not be as attractive as the 6 line, nor be able to repeat the same "1 time" surge based on pent up demand for tablet-sized iPhones.
Supply chain noise about order cuts therefore offered nothing new, and exaggerated things into falsehood. Nothing was "confirmed." It was wrong.
Supply chain noise paraded around by CNBC about "Apple Suppliers" reporting Q1 results below original estimates in early January (Cirrus down 10%, Qorvo down 15%) did not reflect on Apple's Q1 sales at all. And the media kept lying about the fact that those companies had major exposure (larger than their miss) to Samsung's premium Galaxy products that were not selling well.
There was no "confirmation" that supply chain rumors mean whatever hacks interpret them to mean. Think critically.
And it's not literally "off shore," it's just recognized as coming from overseas sales and therefore can be set aside to be reinvested outside the US without paying a large tax that would kick in if it were to be simply handed to shareholders, or spent on US infrastructure.
I would have thought when Apple sells an iPhone in China it was sold in Yuan and deposited in a Chinese bank. Are you saying that those Yuan are converted to dollars and sent to the US only to be set aside?
And if I owned stock in Exxon, I'd care. I don't. This is Apple, not Exxon. Stay on topic.
He is on topic. He's comparing two roughly similar-sized companies, both of which consistently deliver their product and are the market leaders. The point you missed is two-fold: first, lots of established companies are down because of market manipulation, and second, there's absolutely nothing -- literally nothing -- Tim Cook can do about it. There's a lot an SEC with balls could do, but we evidently don't have one of those. Tim Cook isn't in charge of the stock market, and he's not even in charge of AAPL. You know he mostly gets paid in stock right? That means he suffers a tangible financial penalty (both in terms of the value of his stock and how much stock he is awarded) when AAPL doesn't do well, even if its through absolutely no fault of his own as is quite clearly the case here.
So certainly if he could resort to cheap tricks to raise AAPL he would, but he can't. So the logical approach is to keep focusing on what Apple *actually* does (instead of blow investors as you seem to think it exists to do); keep making great products and don't worry about the stock, as it will probably sort itself out.
The only thing that crosses Tim Cook's mind -- ever -- that has directly to do with AAPL is when it is a good time to buy back a ton of it. Like now, for example. Apple (the company) benefits when AAPL goes down, and it benefits with AAPL goes up. But when a CEO becomes focused on the stock rather than the company, the products, and most importantly the customers -- that's when a company becomes awful (Facebook and Google, perfect examples). I'll take a CEO that continues to emphasize the customer experience over giving a toss about the shareholders -- it's the right and most Steve Jobs thing to do.
Another Sunday, another TL;DR Everyone is Stupid, Apple is Fine article from AI.
Want to another graph? Here ya go:
As long as Apple remains a publicly traded company, this is what Cook needs to be concerned about. Even after Apple released their sales numbers, the stock continued to fall so obviously that's not the problem. No Apple isn't doomed, and no we don't need a page full of "Apple is doomed /s" posts, but clearly there's a problem here that Apple needs to address in the future. Hopefully March will be an opportunity for that.
I will never invest in a company where the CEO is more concerned about the stock price than the long term viability of the company. Maybe you should not have invested in AAPL. Seems to me you're a herd investor who buys a stock without first finding out the company's culture and philosophy. Apple doesn't give a patoot what short-horizon investors think. He already said as much last year in the stockholders meeting.
I have another graph for you. Exxon's CEO has been with the company for a long time and even though in the last two years Exxon is down almost 12%, he's still there and recently got a huge salary increase. AAPL is still up 26% in the last two years, which is 5x what the Dow increased and 10x what Nasdaq increased. The overall market is messed up, AAPL is part of that market, which is why AAPL has been pulled down. We all know the market is manipulated and this is a perfect example. Even Apple turncoat Philip Elmer-Dewitt is questioning APPL's "bizarre stock valuation" (P/E 10) especially compared to Amazon's equally bizarre valuation (P/E 405). All Mr. Cook can do is continue to push Apple to create products people are willing to buy. There's nothing he can do to alter the insanity happening in the market.
And if I owned stock in Exxon, I'd care. I don't. This is Apple, not Exxon. Stay on topic.
Why did you buy AAPL in the first place? This is not a stock for short-term horizon investors. Jobs and Cook have not only implied but said as much for years and years. I've held the stock since 2005 and there have been ups and downs, mostly ups interspersed with down years that had nervous nellies soiling their pants like poorly potty trained toddlers.
I wouldn't invest in a company whose CEO is more concerned about the stock price than the company's long term profitability.
I have another graph for you. Exxon's CEO has been with the company for a long time and even though in the last two years Exxon is down almost 12%, he's still there and recently got a huge salary increase. AAPL is still up 26% in the last two years, which is 5x what the Dow increased and 10x what Nasdaq increased. The overall market is messed up, AAPL is part of that market, which is why AAPL has been pulled down. We all know the market is manipulated and this is a perfect example. Even Apple turncoat Philip Elmer-Dewitt is questioning APPL's "bizarre stock valuation" (P/E 10) especially compared to Amazon's equally bizarre valuation (P/E 405). All Mr. Cook can do is continue to push Apple to create products people are willing to buy. There's nothing he can do to alter the insanity happening in the market.
And if I owned stock in Exxon, I'd care. I don't. This is Apple, not Exxon. Stay on topic.
So you owned appl you mean the rest of us don't. I want TC and the rest of the gang to stay focus on making great products and not great perceptions for the bizarros in WS. As had been mentioned appl is disconnected from Apple the company that has billions in the kitty and every division is making healthy profits and I can't say for company like Amazon and btw Enron is also a great company until a whistleblower came on the scene.
I have another graph for you. Exxon's CEO has been with the company for a long time and even though in the last two years Exxon is down almost 12%, he's still there and recently got a huge salary increase. AAPL is still up 26% in the last two years, which is 5x what the Dow increased and 10x what Nasdaq increased. The overall market is messed up, AAPL is part of that market, which is why AAPL has been pulled down. We all know the market is manipulated and this is a perfect example. Even Apple turncoat Philip Elmer-Dewitt is questioning APPL's "bizarre stock valuation" (P/E 10) especially compared to Amazon's equally bizarre valuation (P/E 405). All Mr. Cook can do is continue to push Apple to create products people are willing to buy. There's nothing he can do to alter the insanity happening in the market.
And if I owned stock in Exxon, I'd care. I don't. This is Apple, not Exxon. Stay on topic.
I feel for you: his logic basically ruined your apple bash attempt
I have another graph for you. Exxon's CEO has been with the company for a long time and even though in the last two years Exxon is down almost 12%, he's still there and recently got a huge salary increase. AAPL is still up 26% in the last two years, which is 5x what the Dow increased and 10x what Nasdaq increased. The overall market is messed up, AAPL is part of that market, which is why AAPL has been pulled down. We all know the market is manipulated and this is a perfect example. Even Apple turncoat Philip Elmer-Dewitt is questioning APPL's "bizarre stock valuation" (P/E 10) especially compared to Amazon's equally bizarre valuation (P/E 405). All Mr. Cook can do is continue to push Apple to create products people are willing to buy. There's nothing he can do to alter the insanity happening in the market.
And if I owned stock in Exxon, I'd care. I don't. This is Apple, not Exxon. Stay on topic.
Excuse us, but his example is totally relevant. Who are you to tell others what to say? And his point that there isn't much Apple can do about the insanity of the market is right on target. Further, you seem to be clueless about Apple, and how it historically has been the most manipulated stock on the market, making its share price irrelevant compared to actual performance and market forces. Share price IS NOT what Cook needs to be focused on, other than the fact that this is a great time to implement buybacks. As Rob53 stated, what Apple needs to continue to focus on is building great products that people actually want to buy. Period.
DED said: "It can also build internationally with strong US Dollars (including those dozen new retail stores planned for Mainland China)."
I will bet you that those stores are NOT being built with U.S. dollars, but with a part of the off-shore cash pile.
That is something I don't understand, I guess because I'm not an attorney or an accountant, but if there is a separate Chinese corporation, say Apple China, why couldn't they order giant slabs of glass from the US just like any other Chinese company and pay with funds held abroad? Also why can't the same Apple China corporation pay a US contractor to have something built in the US just like any other foreign corporation does when they build a headquarters here, again using cash held abroad?
I have another graph for you. Exxon's CEO has been with the company for a long time and even though in the last two years Exxon is down almost 12%, he's still there and recently got a huge salary increase. AAPL is still up 26% in the last two years, which is 5x what the Dow increased and 10x what Nasdaq increased. The overall market is messed up, AAPL is part of that market, which is why AAPL has been pulled down. We all know the market is manipulated and this is a perfect example. Even Apple turncoat Philip Elmer-Dewitt is questioning APPL's "bizarre stock valuation" (P/E 10) especially compared to Amazon's equally bizarre valuation (P/E 405). All Mr. Cook can do is continue to push Apple to create products people are willing to buy. There's nothing he can do to alter the insanity happening in the market.
And if I owned stock in Exxon, I'd care. I don't. This is Apple, not Exxon. Stay on topic.
Excuse us, but his example is totally relevant. Who are you to tell others what to say? And his point that there isn't much Apple can do about the insanity of the market is right on target. Further, you seem to be clueless about Apple, and how it historically has been the most manipulated stock on the market, making its share price irrelevant compared to actual performance and market forces. Share price IS NOT what Cook needs to be focused on, other than the fact that this is a great time to implement buybacks. As Rob53 stated, what Apple needs to continue to focus on is building great products that people actually want to buy. Period.
And it's not literally "off shore," it's just recognized as coming from overseas sales and therefore can be set aside to be reinvested outside the US without paying a large tax that would kick in if it were to be simply handed to shareholders, or spent on US infrastructure.
I would have thought when Apple sells an iPhone in China it was sold in Yuan and deposited in a Chinese bank. Are you saying that those Yuan are converted to dollars and sent to the US only to be set aside?
Apple reports its earnings in USD. So while it accepts other currencies overseas, that foreign currency is then translated into USD for accounting / reporting purposes. When FX changes the USD received on a foreign sale, that impacts Apple's earnings, even if the units sold remained equal. That's why Apple has increased the foreign price of hw and apps, which is bad for unit sales, but perhaps better than selling stuff at a loss (as in many cases, products will sell regardless of the price). Either way is generally bad for Apple.
In the Q1 call, Tim Cook noted:
Since the end of fiscal 2014, for instance, the Euro and British Pound are down double-digits, and major currencies such as the Canadian Dollar, Australian Dollar, Mexican Peso, and Turkish Lira have declined 20 percent or more.
The Brazillian Real is down more than 40 percent, and the Russian Ruble has declined more than 50 percent. Two-thirds of Apple's revenue is now generated outside the United States, so foreign currency fluctuations have a very meaningful impact on our results.
Page one of our supplemental material illustrates this point. $100 of Apple's non-US dollar revenue in Q4 of '14 translated to only $85 last quarter, due to the weakening currencies in our international markets. As you can see, the movement has been dramatic.
Last quarter alone, the currency impact has been very large. Page two of our supplemental material illustrates our Q1 revenue and growth rates expressed in constant currency. The 8 percent growth rate I spoke about earlier translates to $80.8 billion in constant currency revenue, which is $5 billion more than our reported revenue.
So currency alone took 15% off the top of Apple's reported earnings, just due to external accounting of overseas transactions.
But Apple details its holdings in USD, and it manages its portfolio of investments (govt bonds, corporate securities, other stuff) from Reno. It just doesn't "recognize" foreign capital as being money it can spend on things like buybacks or dividends (or otherwise invest in the USA) without being hit with an additional tax liability.
Also remember that money is a made up idea, not bills and coins that must be shipped around on boats. It's not like Apple has a Scrooge McDuck room in China full of Yuan gold coins that it can't bring to the US. I believe most of the "foreign funds" are actually invested in corporate securities. They just can't be invested in building US retail stores without the IRS demanding a ~35% cut for "repatriation."
Knowing that, the whole repatriation tax scheme makes little sense for the US, because it's too high for companies volunteer to pay, and achieves little good because the taxes and benefits of domestic investments and dividend payments would benefit the US far more than a one time tax windfall that's (for Apple) not going to ever fall.
There is no cure for stupid investors and stock manipulation, AAPL is vastly undervalued. Evidently not even Icahn has enough juice to make it move - or he pissed the wrong people off.
And if I owned stock in Exxon, I'd care. I don't. This is Apple, not Exxon. Stay on topic.
He is on topic. He's comparing two roughly similar-sized companies, both of which consistently deliver their product and are the market leaders. The point you missed is two-fold: first, lots of established companies are down because of market manipulation, and second, there's absolutely nothing -- literally nothing -- Tim Cook can do about it. There's a lot an SEC with balls could do, but we evidently don't have one of those. Tim Cook isn't in charge of the stock market, and he's not even in charge of AAPL. You know he mostly gets paid in stock right? That means he suffers a tangible financial penalty (both in terms of the value of his stock and how much stock he is awarded) when AAPL doesn't do well, even if its through absolutely no fault of his own as is quite clearly the case here.
So certainly if he could resort to cheap tricks to raise AAPL he would, but he can't. So the logical approach is to keep focusing on what Apple *actually* does (instead of blow investors as you seem to think it exists to do); keep making great products and don't worry about the stock, as it will probably sort itself out.
The only thing that crosses Tim Cook's mind -- ever -- that has directly to do with AAPL is when it is a good time to buy back a ton of it. Like now, for example. Apple (the company) benefits when AAPL goes down, and it benefits with AAPL goes up. But when a CEO becomes focused on the stock rather than the company, the products, and most importantly the customers -- that's when a company becomes awful (Facebook and Google, perfect examples). I'll take a CEO that continues to emphasize the customer experience over giving a toss about the shareholders -- it's the right and most Steve Jobs thing to do.
And if I owned stock in Exxon, I'd care. I don't. This is Apple, not Exxon. Stay on topic.
He is on topic. He's comparing two roughly similar-sized companies, both of which consistently deliver their product and are the market leaders. The point you missed is two-fold: first, lots of established companies are down because of market manipulation, and second, there's absolutely nothing -- literally nothing -- Tim Cook can do about it. There's a lot an SEC with balls could do, but we evidently don't have one of those. Tim Cook isn't in charge of the stock market, and he's not even in charge of AAPL. You know he mostly gets paid in stock right? That means he suffers a tangible financial penalty (both in terms of the value of his stock and how much stock he is awarded) when AAPL doesn't do well, even if its through absolutely no fault of his own as is quite clearly the case here.
So certainly if he could resort to cheap tricks to raise AAPL he would, but he can't. So the logical approach is to keep focusing on what Apple *actually* does (instead of blow investors as you seem to think it exists to do); keep making great products and don't worry about the stock, as it will probably sort itself out.
The only thing that crosses Tim Cook's mind -- ever -- that has directly to do with AAPL is when it is a good time to buy back a ton of it. Like now, for example. Apple (the company) benefits when AAPL goes down, and it benefits with AAPL goes up. But when a CEO becomes focused on the stock rather than the company, the products, and most importantly the customers -- that's when a company becomes awful (Facebook and Google, perfect examples). I'll take a CEO that continues to emphasize the customer experience over giving a toss about the shareholders -- it's the right and most Steve Jobs thing to do.
It is an old axe - we live in an oil economy, and i do tend to agree. But rather than consider one company (Exon) i suggest it would be better to cosider the muscle memory of traders and trading programs (business rules coded into the financial systems). Historically if x happens them y happens next. Those are to a significant degree the rules computer systems follow.
But what if the additional incremental discretionary income available allws poeples wants and desires to exteed the day to day (and therefore implied) need? Does the oil benefit - whether through cheaper fertilizers or fuel for combine harvsters - exceed the impact of other chabnge and risk agents? Do people feel better with cheaper fuel? Hustory says yes but stock markets suggest the opposite .... Are they invested in the market or in their own portfolios maybe only time will tell.
The point? To measure Apple against the totality of market forces is borh reasonable and unreasonable. It is not a binary but a dscretionary call. Where do you or i wish to place our bet?
As for everyone's favourite company to compare to Apple - Amazon - in this case it isn't simply that they have next to no profits. The company has chosen specifically to invest almost all its money into growth (capex, devices, services) all the time, thus not showing earnings/profit per say, but growing the business. That is why analysts tend to look at cash flow as another metric for a company. Here Amazon is showing consistent growing cash flow every year. Ability to generate cash shows that they "could" have profits (to some degree) if they wanted to. Now, I still think Amazon is overvalued (I wouldn't put my own money there), but it isn't like some here think - they have a PE of almost 1000 so there is some conspiracy against Apple.
I think Amazon is the last of the dot-com bubble stocks. During the bubble, the usual business plan was to give stuff away, get high volume, and make money for the investors on the stock price. Twenty years later pets.com is gone, amazon.com still makes no profit, and Jeff Bezos is worth $45 billion from his stock. I like Amazon and buy a lot of stuff from them, but if they ever try to raise their prices significantly I'll just buy somewhere else. Apple had almost two and a half times the total revenue of Amazon last year just selling their own stuff, a 40% gross margin, and their revenue grew faster than Amazon's, year over year. I'm not saying AAPL should have an insane PE like Amazon, but their current one is insane.
And it's not literally "off shore," it's just recognized as coming from overseas sales and therefore can be set aside to be reinvested outside the US without paying a large tax that would kick in if it were to be simply handed to shareholders, or spent on US infrastructure.
I would have thought when Apple sells an iPhone in China it was sold in Yuan and deposited in a Chinese bank. Are you saying that those Yuan are converted to dollars and sent to the US only to be set aside?
The 'offshore' money is mostly onshore in bank accounts in NY. It probably gets converted to US$ and transferred when the exchange rates seem favourable.
I would have thought when Apple sells an iPhone in China it was sold in Yuan and deposited in a Chinese bank. Are you saying that those Yuan are converted to dollars and sent to the US only to be set aside?
Apple reports its earnings in USD. So while it accepts other currencies overseas, that foreign currency is then translated into USD for accounting / reporting purposes. When FX changes the USD received on a foreign sale, that impacts Apple's earnings, even if the units sold remained equal. That's why Apple has increased the foreign price of hw and apps, which is bad for unit sales, but perhaps better than selling stuff at a loss (as in many cases, products will sell regardless of the price). Either way is generally bad for Apple.
In the Q1 call, Tim Cook noted:
Since the end of fiscal 2014, for instance, the Euro and British Pound are down double-digits, and major currencies such as the Canadian Dollar, Australian Dollar, Mexican Peso, and Turkish Lira have declined 20 percent or more.
The Brazillian Real is down more than 40 percent, and the Russian Ruble has declined more than 50 percent. Two-thirds of Apple's revenue is now generated outside the United States, so foreign currency fluctuations have a very meaningful impact on our results.
Page one of our supplemental material illustrates this point. $100 of Apple's non-US dollar revenue in Q4 of '14 translated to only $85 last quarter, due to the weakening currencies in our international markets. As you can see, the movement has been dramatic.
Last quarter alone, the currency impact has been very large. Page two of our supplemental material illustrates our Q1 revenue and growth rates expressed in constant currency. The 8 percent growth rate I spoke about earlier translates to $80.8 billion in constant currency revenue, which is $5 billion more than our reported revenue.
So currency alone took 15% off the top of Apple's reported earnings, just due to external accounting of overseas transactions.
But Apple details its holdings in USD, and it manages its portfolio of investments (govt bonds, corporate securities, other stuff) from Reno. It just doesn't "recognize" foreign capital as being money it can spend on things like buybacks or dividends (or otherwise invest in the USA) without being hit with an additional tax liability.
Also remember that money is a made up idea, not bills and coins that must be shipped around on boats. It's not like Apple has a Scrooge McDuck room in China full of Yuan gold coins that it can't bring to the US. I believe most of the "foreign funds" are actually invested in corporate securities. They just can't be invested in building US retail stores without the IRS demanding a ~35% cut for "repatriation."
Knowing that, the whole repatriation tax scheme makes little sense for the US, because it's too high for companies volunteer to pay, and achieves little good because the taxes and benefits of domestic investments and dividend payments would benefit the US far more than a one time tax windfall that's (for Apple) not going to ever fall.
Nice cartoon fantasy. Corporate securities investments? Like what? I doubt they are commingling funds from US revenue and foreign revenue through their Utah financial services. I still think the China revenue is in Chinese banks or Chinese securities, certainly not US corporate bonds or stocks. I could be wrong but your view is quite suspect in my opinion.
I would have thought when Apple sells an iPhone in China it was sold in Yuan and deposited in a Chinese bank. Are you saying that those Yuan are converted to dollars and sent to the US only to be set aside?
The 'offshore' money is mostly onshore in bank accounts in NY. It probably gets converted to US$ and transferred when the exchange rates seem favourable.
That bizarrely cynical fantasy is based upon what? Apple has cited FX headwinds as an ongoing challenge and drew out a chart showing that currency shifts have erased 15 percent of its revenues and turned its Q1 8% growth globally into what looks like 2% growth.
The strengthening USD is a long term trend, not a fluctuation Apple can cherrypick "when rates seem favorable." I mean, come on, read a little.
Comments
"Supply chain noise" predicted a major drop in Q2 and a significant guidance miss in Q1. It was wrong on both counts.
On the other hand, it was already widely known that there would be a "difficult compare" and widely believed that the 6s would not be as attractive as the 6 line, nor be able to repeat the same "1 time" surge based on pent up demand for tablet-sized iPhones.
Supply chain noise about order cuts therefore offered nothing new, and exaggerated things into falsehood. Nothing was "confirmed." It was wrong.
Supply chain noise paraded around by CNBC about "Apple Suppliers" reporting Q1 results below original estimates in early January (Cirrus down 10%, Qorvo down 15%) did not reflect on Apple's Q1 sales at all. And the media kept lying about the fact that those companies had major exposure (larger than their miss) to Samsung's premium Galaxy products that were not selling well.
There was no "confirmation" that supply chain rumors mean whatever hacks interpret them to mean. Think critically.
"...Samsung initially experienced a "crisis of design" and responded by initiating an iPhone counterfeiting program."
I wouldn't invest in a company whose CEO is more concerned about the stock price than the company's long term profitability.
I want TC and the rest of the gang to stay focus on making great products and not great perceptions for the bizarros in WS.
As had been mentioned appl is disconnected from Apple the company that has billions in the kitty and every division is making healthy profits and I can't say for company like Amazon and btw Enron is also a great company until a whistleblower came on the scene.
In the Q1 call, Tim Cook noted:
The Brazillian Real is down more than 40 percent, and the Russian Ruble has declined more than 50 percent. Two-thirds of Apple's revenue is now generated outside the United States, so foreign currency fluctuations have a very meaningful impact on our results.
Page one of our supplemental material illustrates this point. $100 of Apple's non-US dollar revenue in Q4 of '14 translated to only $85 last quarter, due to the weakening currencies in our international markets. As you can see, the movement has been dramatic.
Last quarter alone, the currency impact has been very large. Page two of our supplemental material illustrates our Q1 revenue and growth rates expressed in constant currency. The 8 percent growth rate I spoke about earlier translates to $80.8 billion in constant currency revenue, which is $5 billion more than our reported revenue.
So currency alone took 15% off the top of Apple's reported earnings, just due to external accounting of overseas transactions.
But Apple details its holdings in USD, and it manages its portfolio of investments (govt bonds, corporate securities, other stuff) from Reno. It just doesn't "recognize" foreign capital as being money it can spend on things like buybacks or dividends (or otherwise invest in the USA) without being hit with an additional tax liability.
Also remember that money is a made up idea, not bills and coins that must be shipped around on boats. It's not like Apple has a Scrooge McDuck room in China full of Yuan gold coins that it can't bring to the US. I believe most of the "foreign funds" are actually invested in corporate securities. They just can't be invested in building US retail stores without the IRS demanding a ~35% cut for "repatriation."
Knowing that, the whole repatriation tax scheme makes little sense for the US, because it's too high for companies volunteer to pay, and achieves little good because the taxes and benefits of domestic investments and dividend payments would benefit the US far more than a one time tax windfall that's (for Apple) not going to ever fall.
http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/#7354c6742224
But what if the additional incremental discretionary income available allws poeples wants and desires to exteed the day to day (and therefore implied) need? Does the oil benefit - whether through cheaper fertilizers or fuel for combine harvsters - exceed the impact of other chabnge and risk agents? Do people feel better with cheaper fuel? Hustory says yes but stock markets suggest the opposite .... Are they invested in the market or in their own portfolios maybe only time will tell.
The point? To measure Apple against the totality of market forces is borh reasonable and unreasonable. It is not a binary but a dscretionary call. Where do you or i wish to place our bet?