Without the iTunes music store, what can be expected? That was the start of the growth here and elsewhere. It equals more iPods sold, which then leads to more cpu's being sold, etc.
Interest from investments falls under the head of revenue/income. Net profit includes this interest.
Apple has always made shitloads in interest. For several quarters in the 2002-2003 era, the only reason Apple reported a profit was because of interest.
edit:
Increases in cash other than from net profits could be accounted for by capital gains, which are not counted as revenue and are generally not taxable.
Actually, for those quarters, profits generally came from the sale of ARM stock. But generally stuff like that isn't too big a deal, because investors and analysts look more at the data prior to 'one time' events (like stock sales/buy backs, severance packages, reorginazation charges, etc).
I haven't looked at their financial statements, and I'm more of a finance guy than an accounting guy by far (I'm a university business undergrad). Here are some potential answers to your question:
- Biggest single answer is that accounting profit/loss does not necessarily always lead to increase/decrease in cash. For example, there is something called amortization (depreciation), whereby you regularly expense the decreases in value of capital assets. This type of expense is a cashless expense.
The simplest example I can give is that if you buy a brand new car, it goes down in value over time, accounting standards dictate that this decrease in value be recognized over time (on a personal basis we just know that the car isn't worth as much, but usually don't bother to formally track this).
- Inventory may have dropped during the quarter. If you have $x in inventory, then sell it, your inventory valuations go down, and your cash is likely to go up. Of course this assumes that you don't have accounts payable (people you owe money to) and accounts receivable (people that owe you money), which leads us to:
- If someone owes you money (accounts payable) and they pay off some of their debt to you, your cash goes up, and your accounts payable goes down.
- A company can sell stock (shares) in their company, which would increase their cash position.
I won't provide any further examples of this, but just think about it like this: in the business world, profit and loss generally are not directly related to cash, i.e. $30 million profit does not directly mean an increase in cash of $30 million.
I just wanted to add in short, check out the "Statement of Cash Flows" to see where the money really goes. This statement is required for any public company and the cash flow statement would show you how their cash & liquid assets increased more when compared to net income.
Noncash expenses (as mentioned above amort/depr) are the love of income statement reporters because it reduces taxable income without any cash outlay. So again, it's money in the bank (check out that cash flow statement) but none of that money has to go back to Uncle Sam. Of course there's the reconciliation of different types of depreciation; for example, AAPL could be using straight line depreciation on their statements but everyone has to use the MACRS tables (double declining balance) depreciation when filing taxes. So you really need to dig into the SEC filings to see what the differences are in order to try and reconcile this stuff.
I disagree with the lack of the iTunes Music Store responses. Japan will embrace any cool new technology. You can argue that the music store is a huge part of getting people in some countries to use Apple, however Japan is the exception to this rule. Japan likes cool looking designs. I honestly think it's Apple's inability to make laptops with better screens (Been a complaint of mine for a long time, my co-worker's 800 dollar Compaq laptop has a much better screen then my other Coworkers brand new PBook)
Apple needs a subnotebook I think or nicer laptops to compete in Japan...
Also, accounting is fun. I just finished my intro Financial Accounting class at my university. It's fun.
I disagree with the lack of the iTunes Music Store responses. Japan will embrace any cool new technology. You can argue that the music store is a huge part of getting people in some countries to use Apple, however Japan is the exception to this rule. Japan likes cool looking designs. I honestly think it's Apple's inability to make laptops with better screens (Been a complaint of mine for a long time, my co-worker's 800 dollar Compaq laptop has a much better screen then my other Coworkers brand new PBook)
Apple needs a subnotebook I think or nicer laptops to compete in Japan...
Also, accounting is fun. I just finished my intro Financial Accounting class at my university. It's fun.
I agree about a sub notebook, but disagree about iTunes. There's far more more to consider than that. Japanese and Korean's watch Tv through their computers because they don't have room for both devices. A sub notebook isn't ideal for that purpose.
iTunes has made more non Apple using people more aware of Apple's other products. Japan is no different in that. If anything, they are even more faddish than we are. If using iTunes is cool, then you just know that they are going to do it. also, the keeping up with the uh, Jones' is even stronger there.
I don't think that Apple needs a subnotebook in Japan.
I'm not a market analyst but common sense tells me that Apple needs to stop thinking different for a short while.
Here are the facts that I base my opinion on:
1. The computer sales has been growing yearly here in Japan. I don't remember the exact numbers but I heard it on the news the other day. OTOH, Apples sales are apparently going down. So obviously, Apple is doing something wrong while others are doing something right. Apple needs to learn from the others.
2. There are very few subnotebooks on the market. Probably because few people actually carry them around. As I mentioned in a previous post, notebooks sell because they are the new desktop. The only movement they see is when the Japanese take the notebook off the shelf to put it on the living room table and vice versa. People want a desktop quality notebook that they can put away when not in use. Screen quality is more important than battery consumption. BTW, in any computer shop approximately 60-70% of floor space is occupied by laptops.
3. People watch TV on their computers. Do you enjoy watching TV regularly on 10" screens? Didn't think so. Which is why 15"-17" screens are the most popular size. Subnotebooks are too small.
4. ITMS is important. But Japan might be one of the few markets where people will prefer to subscribe to a music service rather than buy music online. Japan already has several successful music subscription services which has been in business since the early 80s. It's not internet-based but a company called Yuusen seems to have a huge marketshare. Japanese are notoriously trend-driven and they are not very likely to listen to last years music very frequently. Which is probably why people prefer to rent music rather than buy. (Yes, you can rent CDs in Japan. The same store will even sell you a blank CD or MD to copy the music illegally.)
5. The Japanese are very, very design-conscious. Personally, I think Japanese lean toward cute looking designs rather than cool-looking designs but it's hard for me judge. Either way, the simple and clean lines of Apples products seem to be doing very good in this regard.
Hey there's plenty of Mac heads in Japan - as far as I remember.
But it's true there was sub-notebooks on the scene there almost four years ago now. I had an internet phone 6 years ago. And the photo phones was 5 years ago I guess. I read somewhere there's 20 odd millions with video phones these days
Wasn't it they made a Japan only slightly, sub-PB3400(c) that was big success over there....
Moreover, it's a good testing ground for new products. As millions will buy new non-standard experimental electronics..
Cummon Apple Sub ibooks plz!
yatte kure!
--- Whoever said Japanese are small these days - should simply go there --- There's an equal number of grotesquely obese kids walking/waddling about as there is in the Apple motherland...
interesting idea re: Japan becomes their "advanced r+d" market testing playground.
oh, and maybe its just me but i think scavenger was referring to a specific body part being small
I just wanted to add in short, check out the "Statement of Cash Flows" to see where the money really goes. This statement is required for any public company and the cash flow statement would show you how their cash & liquid assets increased more when compared to net income.
Noncash expenses (as mentioned above amort/depr) are the love of income statement reporters because it reduces taxable income without any cash outlay. So again, it's money in the bank (check out that cash flow statement) but none of that money has to go back to Uncle Sam. Of course there's the reconciliation of different types of depreciation; for example, AAPL could be using straight line depreciation on their statements but everyone has to use the MACRS tables (double declining balance) depreciation when filing taxes. So you really need to dig into the SEC filings to see what the differences are in order to try and reconcile this stuff.
Isn't accounting/finance/reporting fun?
Good point. I think that it is critical to gain at least a basic knowledge of how key financial statements (balance sheet, income statement, cashflow statement) work if one is going to invest in publicly traded companies.
I was waiting for the first "analyst" to declare that no matter how great Apple is doing, fear-uncertainty-doubt should be first and foremost in the headline.
I was waiting for the first "analyst" to declare that no matter how great Apple is doing, fear-uncertainty-doubt should be first and foremost in the headline.
The byline is misleading. If you read the article, analysts actually believe AAPL will do better then what Oppenheimer suggested during the meeting.
The analysts believe AAPL will do better, but I do think Oppenheimer's guidance is prudent, as the Intel switch was announced only 3 weeks before quarter end. I would figure preordered stuff was being built in those 3 weeks, so any hesitation to buy Mac CPUs won't show up until the Q4 results are announced.
Good point. I think that it is critical to gain at least a basic knowledge of how key financial statements (balance sheet, income statement, cashflow statement) work if one is going to invest in publicly traded companies.
Absolutely. If you can't be bothered to wade through the financial statements or don't understand what is being reported, you might as well hang up Section C of the WSJ on the wall and throw darts at it. Whatever the darts hit are your investment decisions. It's just as reliable if you aren't checking out the statements, value line for co. & industry, etc.
Absolutely. If you can't be bothered to wade through the financial statements or don't understand what is being reported, you might as well hang up Section C of the WSJ on the wall and throw darts at it. Whatever the darts hit are your investment decisions. It's just as reliable if you aren't checking out the statements, value line for co. & industry, etc.
On the other hand it is too easy to get hung up on those statements as well. My broker is always talking about the "technicals". I've yet, in over 40 years of investing, to see a stock go up because the technicals looked good. There is more to investing successfully than churning through the balance sheets.
It's far more important to know the industry, and the relations between the companies in it, as well as the industries around them, than it is to know detailed financial statements.
One reason that analysts are usually off in their understanding of what's going on (other than the illegal building up of stocks that their companies hope to do business with), is that they truly do NOT know the industries as well as they should. They depend too much on those financial reports which, after all, are giving a history, but not telling us much about future performance.
Take Gateway, for example. No one could have predicted this new $250 million deal which drove their price up. Is Gateway now a good investment? If other organizations now look at them differently because of this.
It's complex, but investing involves a "feel" as much as anything else.
I'm part of an NAIC stock club and we have a simple motto; we don't invest in stocks, we invest in companies. The numbers help with analysis but more of it is like you said, reading about what the company is doing, where it wants to go, how effective the management is, etc. and see how their products are perceived in the marketplace.
The point is, you need to invest in good companies that have a future, not the 'insider's tip of the day'.
On the other hand it is too easy to get hung up on those statements as well. My broker is always talking about the "technicals". I've yet, in over 40 years of investing, to see a stock go up because the technicals looked good. There is more to investing successfully than churning through the balance sheets.
It's far more important to know the industry, and the relations between the companies in it, as well as the industries around them, than it is to know detailed financial statements.
One reason that analysts are usually off in their understanding of what's going on (other than the illegal building up of stocks that their companies hope to do business with), is that they truly do NOT know the industries as well as they should. They depend too much on those financial reports which, after all, are giving a history, but not telling us much about future performance.
Take Gateway, for example. No one could have predicted this new $250 million deal which drove their price up. Is Gateway now a good investment? If other organizations now look at them differently because of this.
It's complex, but investing involves a "feel" as much as anything else.
I agree, analysts generally speaking suck, and one should never, ever base buy/sell decisions on what an analyst is telling you to do (and no, I'm not being sarcastic either hehe).
I'm currently at the "learning about the markets stage", been trading with a very small account thus far, since like many other uni students, I don't have a lot of extra money. I tend to look at technical analysis first and foremost, but I also always review fundamentals on the companies I'm looking at.
The amusing thing it that finance theory basically tells you that technical analysis is some sort of voodoo magic, that nobody can predict the future movements of a stock, and that it's therefore impossible to make money in the markets (efficient market hypothesis). The best explanations relating to how the markets move have been Schiller's, we wrote quite a bit about the stock market bubble that took place about 5-6 years ago.
I agree, analysts generally speaking suck, and one should never, ever base buy/sell decisions on what an analyst is telling you to do (and no, I'm not being sarcastic either hehe).
I'm currently at the "learning about the markets stage", been trading with a very small account thus far, since like many other uni students, I don't have a lot of extra money. I tend to look at technical analysis first and foremost, but I also always review fundamentals on the companies I'm looking at.
The amusing thing it that finance theory basically tells you that technical analysis is some sort of voodoo magic, that nobody can predict the future movements of a stock, and that it's therefore impossible to make money in the markets (efficient market hypothesis). The best explanations relating to how the markets move have been Schiller's, we wrote quite a bit about the stock market bubble that took place about 5-6 years ago.
Based on past performance and the balance sheets, would you have quessed that Apple would be a good investment around three years ago? I think not. Yet I invested in them when their stock fell to $16.90. It hasn't done too badly since then.
Based on past performance and the balance sheets, would you have quessed that Apple would be a good investment around three years ago? I think not. Yet I invested in them when their stock fell to $16.90. It hasn't done too badly since then.
I put together an SSG when AAPL was $14 and change (pre-split don't forget). The SSG said that AAPL was overvalued (?) which is weird since at the time their bank account was worth about $12/share. Anyway I couldn't get my stock club on board (mostly IT peeps) at the time. Talk about silly mistakes. I wish I had just gone ahead and personally invested in AAPL at that time.
But then how come net profit was reported as $320 million when their cash reserve went up by $450 million ?
Where did the money go?
Here: Book Value Per Share (mrq)t7.758
The Book value of Apple went up. The price of the stock includes all, the valus of the buildings and holdings. In this case the book value or cash holdings went up by $450 mil. That figure os of course diluted by the amount of stock on the market, since each share is actually just components of all things AAPL. In this case there are 813mil shares floating on the market, so the intrest income added about $0.50 to each share of AAPL of book value. What you are really buying in a stock to forward earnings, a large book value means nothing if Wall Street does not believe that you have a forward earnings plan that you can execute. Witness Apple when Steve took over. The stock was traiding at $15 of which $12.50 was cash holdings, so that means that the rest of the business buildings, inventory, ect, was valued at $2.50 and no forward earnings reflected in the stock.
The Book value of Apple went up. The price of the stock includes all, the valus of the buildings and holdings. In this case the book value or cash holdings went up by $450 mil. That figure os of course diluted by the amount of stock on the market, since each share is actually just components of all things AAPL. In this case there are 813mil shares floating on the market, so the intrest income added about $0.50 to each share of AAPL of book value. What you are really buying in a stock to forward earnings, a large book value means nothing if Wall Street does not believe that you have a forward earnings plan that you can execute. Witness Apple when Steve took over. The stock was traiding at $15 of which $12.50 was cash holdings, so that means that the rest of the business buildings, inventory, ect, was valued at $2.50 and no forward earnings reflected in the stock.
Comments
Originally posted by Sceptic
Interest from investments falls under the head of revenue/income. Net profit includes this interest.
Apple has always made shitloads in interest. For several quarters in the 2002-2003 era, the only reason Apple reported a profit was because of interest.
edit:
Increases in cash other than from net profits could be accounted for by capital gains, which are not counted as revenue and are generally not taxable.
Actually, for those quarters, profits generally came from the sale of ARM stock. But generally stuff like that isn't too big a deal, because investors and analysts look more at the data prior to 'one time' events (like stock sales/buy backs, severance packages, reorginazation charges, etc).
Originally posted by Chagi
I haven't looked at their financial statements, and I'm more of a finance guy than an accounting guy by far (I'm a university business undergrad). Here are some potential answers to your question:
- Biggest single answer is that accounting profit/loss does not necessarily always lead to increase/decrease in cash. For example, there is something called amortization (depreciation), whereby you regularly expense the decreases in value of capital assets. This type of expense is a cashless expense.
The simplest example I can give is that if you buy a brand new car, it goes down in value over time, accounting standards dictate that this decrease in value be recognized over time (on a personal basis we just know that the car isn't worth as much, but usually don't bother to formally track this).
- Inventory may have dropped during the quarter. If you have $x in inventory, then sell it, your inventory valuations go down, and your cash is likely to go up. Of course this assumes that you don't have accounts payable (people you owe money to) and accounts receivable (people that owe you money), which leads us to:
- If someone owes you money (accounts payable) and they pay off some of their debt to you, your cash goes up, and your accounts payable goes down.
- A company can sell stock (shares) in their company, which would increase their cash position.
I won't provide any further examples of this, but just think about it like this: in the business world, profit and loss generally are not directly related to cash, i.e. $30 million profit does not directly mean an increase in cash of $30 million.
I just wanted to add in short, check out the "Statement of Cash Flows" to see where the money really goes. This statement is required for any public company and the cash flow statement would show you how their cash & liquid assets increased more when compared to net income.
Noncash expenses (as mentioned above amort/depr) are the love of income statement reporters because it reduces taxable income without any cash outlay. So again, it's money in the bank (check out that cash flow statement) but none of that money has to go back to Uncle Sam. Of course there's the reconciliation of different types of depreciation; for example, AAPL could be using straight line depreciation on their statements but everyone has to use the MACRS tables (double declining balance) depreciation when filing taxes. So you really need to dig into the SEC filings to see what the differences are in order to try and reconcile this stuff.
Isn't accounting/finance/reporting fun?
Apple needs a subnotebook I think or nicer laptops to compete in Japan...
Also, accounting is fun. I just finished my intro Financial Accounting class at my university. It's fun.
Originally posted by scavanger
I disagree with the lack of the iTunes Music Store responses. Japan will embrace any cool new technology. You can argue that the music store is a huge part of getting people in some countries to use Apple, however Japan is the exception to this rule. Japan likes cool looking designs. I honestly think it's Apple's inability to make laptops with better screens (Been a complaint of mine for a long time, my co-worker's 800 dollar Compaq laptop has a much better screen then my other Coworkers brand new PBook)
Apple needs a subnotebook I think or nicer laptops to compete in Japan...
Also, accounting is fun. I just finished my intro Financial Accounting class at my university. It's fun.
I agree about a sub notebook, but disagree about iTunes. There's far more more to consider than that. Japanese and Korean's watch Tv through their computers because they don't have room for both devices. A sub notebook isn't ideal for that purpose.
iTunes has made more non Apple using people more aware of Apple's other products. Japan is no different in that. If anything, they are even more faddish than we are. If using iTunes is cool, then you just know that they are going to do it. also, the keeping up with the uh, Jones' is even stronger there.
I'm not a market analyst but common sense tells me that Apple needs to stop thinking different for a short while.
Here are the facts that I base my opinion on:
1. The computer sales has been growing yearly here in Japan. I don't remember the exact numbers but I heard it on the news the other day. OTOH, Apples sales are apparently going down. So obviously, Apple is doing something wrong while others are doing something right. Apple needs to learn from the others.
2. There are very few subnotebooks on the market. Probably because few people actually carry them around. As I mentioned in a previous post, notebooks sell because they are the new desktop. The only movement they see is when the Japanese take the notebook off the shelf to put it on the living room table and vice versa. People want a desktop quality notebook that they can put away when not in use. Screen quality is more important than battery consumption. BTW, in any computer shop approximately 60-70% of floor space is occupied by laptops.
3. People watch TV on their computers. Do you enjoy watching TV regularly on 10" screens? Didn't think so. Which is why 15"-17" screens are the most popular size. Subnotebooks are too small.
4. ITMS is important. But Japan might be one of the few markets where people will prefer to subscribe to a music service rather than buy music online. Japan already has several successful music subscription services which has been in business since the early 80s. It's not internet-based but a company called Yuusen seems to have a huge marketshare. Japanese are notoriously trend-driven and they are not very likely to listen to last years music very frequently. Which is probably why people prefer to rent music rather than buy. (Yes, you can rent CDs in Japan. The same store will even sell you a blank CD or MD to copy the music illegally.)
5. The Japanese are very, very design-conscious. Personally, I think Japanese lean toward cute looking designs rather than cool-looking designs but it's hard for me judge. Either way, the simple and clean lines of Apples products seem to be doing very good in this regard.
So we can forget that idea!
for all of the "interesting accountants" out ther I wish congratulations - the world is just set-up nicely for you!
Originally posted by OfficerDigby
Hey there's plenty of Mac heads in Japan - as far as I remember.
But it's true there was sub-notebooks on the scene there almost four years ago now. I had an internet phone 6 years ago. And the photo phones was 5 years ago I guess. I read somewhere there's 20 odd millions with video phones these days
Wasn't it they made a Japan only slightly, sub-PB3400(c) that was big success over there....
Moreover, it's a good testing ground for new products. As millions will buy new non-standard experimental electronics..
Cummon Apple Sub ibooks plz!
yatte kure!
--- Whoever said Japanese are small these days - should simply go there --- There's an equal number of grotesquely obese kids walking/waddling about as there is in the Apple motherland...
interesting idea re: Japan becomes their "advanced r+d" market testing playground.
oh, and maybe its just me but i think scavenger was referring to a specific body part being small
............................
Originally posted by sunilraman
interesting idea re: Japan becomes their "advanced r+d" market testing playground.
oh, and maybe its just me but i think scavenger was referring to a specific body part being small
............................
Yes, I've noticed that Japanses forefingers are small.
Originally posted by PBG4 Dude
I just wanted to add in short, check out the "Statement of Cash Flows" to see where the money really goes. This statement is required for any public company and the cash flow statement would show you how their cash & liquid assets increased more when compared to net income.
Noncash expenses (as mentioned above amort/depr) are the love of income statement reporters because it reduces taxable income without any cash outlay. So again, it's money in the bank (check out that cash flow statement) but none of that money has to go back to Uncle Sam. Of course there's the reconciliation of different types of depreciation; for example, AAPL could be using straight line depreciation on their statements but everyone has to use the MACRS tables (double declining balance) depreciation when filing taxes. So you really need to dig into the SEC filings to see what the differences are in order to try and reconcile this stuff.
Isn't accounting/finance/reporting fun?
Good point. I think that it is critical to gain at least a basic knowledge of how key financial statements (balance sheet, income statement, cashflow statement) work if one is going to invest in publicly traded companies.
http://news.zdnet.co.uk/software/mac...9209221,00.htm
I was waiting for the first "analyst" to declare that no matter how great Apple is doing, fear-uncertainty-doubt should be first and foremost in the headline.
Originally posted by JimDreamworx
Oh, no! The sky is falling!
http://news.zdnet.co.uk/software/mac...9209221,00.htm
I was waiting for the first "analyst" to declare that no matter how great Apple is doing, fear-uncertainty-doubt should be first and foremost in the headline.
The byline is misleading. If you read the article, analysts actually believe AAPL will do better then what Oppenheimer suggested during the meeting.
The analysts believe AAPL will do better, but I do think Oppenheimer's guidance is prudent, as the Intel switch was announced only 3 weeks before quarter end. I would figure preordered stuff was being built in those 3 weeks, so any hesitation to buy Mac CPUs won't show up until the Q4 results are announced.
Originally posted by Chagi
Good point. I think that it is critical to gain at least a basic knowledge of how key financial statements (balance sheet, income statement, cashflow statement) work if one is going to invest in publicly traded companies.
Absolutely. If you can't be bothered to wade through the financial statements or don't understand what is being reported, you might as well hang up Section C of the WSJ on the wall and throw darts at it. Whatever the darts hit are your investment decisions. It's just as reliable if you aren't checking out the statements, value line for co. & industry, etc.
Originally posted by PBG4 Dude
Absolutely. If you can't be bothered to wade through the financial statements or don't understand what is being reported, you might as well hang up Section C of the WSJ on the wall and throw darts at it. Whatever the darts hit are your investment decisions. It's just as reliable if you aren't checking out the statements, value line for co. & industry, etc.
On the other hand it is too easy to get hung up on those statements as well. My broker is always talking about the "technicals". I've yet, in over 40 years of investing, to see a stock go up because the technicals looked good. There is more to investing successfully than churning through the balance sheets.
It's far more important to know the industry, and the relations between the companies in it, as well as the industries around them, than it is to know detailed financial statements.
One reason that analysts are usually off in their understanding of what's going on (other than the illegal building up of stocks that their companies hope to do business with), is that they truly do NOT know the industries as well as they should. They depend too much on those financial reports which, after all, are giving a history, but not telling us much about future performance.
Take Gateway, for example. No one could have predicted this new $250 million deal which drove their price up. Is Gateway now a good investment? If other organizations now look at them differently because of this.
It's complex, but investing involves a "feel" as much as anything else.
The point is, you need to invest in good companies that have a future, not the 'insider's tip of the day'.
Originally posted by melgross
On the other hand it is too easy to get hung up on those statements as well. My broker is always talking about the "technicals". I've yet, in over 40 years of investing, to see a stock go up because the technicals looked good. There is more to investing successfully than churning through the balance sheets.
It's far more important to know the industry, and the relations between the companies in it, as well as the industries around them, than it is to know detailed financial statements.
One reason that analysts are usually off in their understanding of what's going on (other than the illegal building up of stocks that their companies hope to do business with), is that they truly do NOT know the industries as well as they should. They depend too much on those financial reports which, after all, are giving a history, but not telling us much about future performance.
Take Gateway, for example. No one could have predicted this new $250 million deal which drove their price up. Is Gateway now a good investment? If other organizations now look at them differently because of this.
It's complex, but investing involves a "feel" as much as anything else.
I agree, analysts generally speaking suck, and one should never, ever base buy/sell decisions on what an analyst is telling you to do (and no, I'm not being sarcastic either hehe).
I'm currently at the "learning about the markets stage", been trading with a very small account thus far, since like many other uni students, I don't have a lot of extra money. I tend to look at technical analysis first and foremost, but I also always review fundamentals on the companies I'm looking at.
The amusing thing it that finance theory basically tells you that technical analysis is some sort of voodoo magic, that nobody can predict the future movements of a stock, and that it's therefore impossible to make money in the markets (efficient market hypothesis). The best explanations relating to how the markets move have been Schiller's, we wrote quite a bit about the stock market bubble that took place about 5-6 years ago.
Originally posted by Chagi
I agree, analysts generally speaking suck, and one should never, ever base buy/sell decisions on what an analyst is telling you to do (and no, I'm not being sarcastic either hehe).
I'm currently at the "learning about the markets stage", been trading with a very small account thus far, since like many other uni students, I don't have a lot of extra money. I tend to look at technical analysis first and foremost, but I also always review fundamentals on the companies I'm looking at.
The amusing thing it that finance theory basically tells you that technical analysis is some sort of voodoo magic, that nobody can predict the future movements of a stock, and that it's therefore impossible to make money in the markets (efficient market hypothesis). The best explanations relating to how the markets move have been Schiller's, we wrote quite a bit about the stock market bubble that took place about 5-6 years ago.
Based on past performance and the balance sheets, would you have quessed that Apple would be a good investment around three years ago? I think not. Yet I invested in them when their stock fell to $16.90. It hasn't done too badly since then.
Originally posted by melgross
Based on past performance and the balance sheets, would you have quessed that Apple would be a good investment around three years ago? I think not. Yet I invested in them when their stock fell to $16.90. It hasn't done too badly since then.
I put together an SSG when AAPL was $14 and change (pre-split don't forget). The SSG said that AAPL was overvalued (?) which is weird since at the time their bank account was worth about $12/share. Anyway I couldn't get my stock club on board (mostly IT peeps) at the time. Talk about silly mistakes.
Originally posted by sunilraman
But then how come net profit was reported as $320 million when their cash reserve went up by $450 million ?
Where did the money go?
Here: Book Value Per Share (mrq)
The Book value of Apple went up. The price of the stock includes all, the valus of the buildings and holdings. In this case the book value or cash holdings went up by $450 mil. That figure os of course diluted by the amount of stock on the market, since each share is actually just components of all things AAPL. In this case there are 813mil shares floating on the market, so the intrest income added about $0.50 to each share of AAPL of book value. What you are really buying in a stock to forward earnings, a large book value means nothing if Wall Street does not believe that you have a forward earnings plan that you can execute. Witness Apple when Steve took over. The stock was traiding at $15 of which $12.50 was cash holdings, so that means that the rest of the business buildings, inventory, ect, was valued at $2.50 and no forward earnings reflected in the stock.
Originally posted by Brendon
Where did the money go?
Here: Book Value Per Share (mrq)
The Book value of Apple went up. The price of the stock includes all, the valus of the buildings and holdings. In this case the book value or cash holdings went up by $450 mil. That figure os of course diluted by the amount of stock on the market, since each share is actually just components of all things AAPL. In this case there are 813mil shares floating on the market, so the intrest income added about $0.50 to each share of AAPL of book value. What you are really buying in a stock to forward earnings, a large book value means nothing if Wall Street does not believe that you have a forward earnings plan that you can execute. Witness Apple when Steve took over. The stock was traiding at $15 of which $12.50 was cash holdings, so that means that the rest of the business buildings, inventory, ect, was valued at $2.50 and no forward earnings reflected in the stock.
edit: deleted my ramblings, thanks Brendon