What, you think that the folks here need protection from remarks that they might not like? I find that attitude highly condescending, do you see yourself as a mother figure?
No, I don't mean to be condescending, I just see you guys ripping Andy a new a**hole. ...I guess I was trying to "protect", or at least, warn, Andy himself, not you all. I wasn't worried about him offending you all so much as Andy saying "You're all F***tards! I'm never writing another article for you ever again!!".
..."income smoothing." It should help answer your question about shifting from explosive growth to regular growth. Good managers are able to make the transition smoothly. Allowing the stock to change its character over time...
That's actually a good point. Do you see this rarely in Nasdaq companies? Why is Apple different, what drives them to resist the temptation of raking in the big bucks during explosive growth?
You suggest the stock is changing character perhaps... Does this mean it is moving away from a purely growth-driven stock? Is the market coming to terms with this?
Hi Andy, welcome to AI Forums... Appreciate your articles and insight, but statements like that, well, the forum people here are pretty touchy.
Let me qualify this. What I'm saying here is that analysts, investors and any major players in Apple don't care about iPhone sales and revenue this quarter. It's not the focus of this earnings statement. This is in response to someone mentioning that Apple is going to tank due to analysts misstating that 700K iPhone sales results in revenue recognition this quarter.
Why do you think the stock is being punished harshly today down to $161.xx?
I own a private hedge fund and it looks like all the financial shorts are now shorting tech big time regardless of whether Apple blows out the numbers or not. It seems that for each iPhone that is sold, Apple sells 3 to 4 Macs. My family owns 5. I think the shorts should be taken out and shot on this one. What do you think?
Greg
Greg, let's consider what Andy is saying and what I have suggested now. Why is everyone shorting Apple so much? There are two questions.
A. Does Apple operate in a way (eg, income smoothing) that is counter to a lot of other Tech stocks? I mean, they're going to be selling over 20 million phones this year, from just a few million last year, and they're *deferring a huge chunk of that revenue*...
B. Does the market even know what the hell Apple is about? In this day and age, what the way they go about things is actually, pretty strange. Financials show a certain side of the story. But anyone that knows the company, will know how enigmatic it is. Does the market have any understanding of this? If not, well, then people will just treat it using whatever formula or estimate they use for most "Tech stocks".
That's actually a good point. Do you see this rarely in Nasdaq companies? Why is Apple different, what drives them to resist the temptation of raking in the big bucks during explosive growth?
You suggest the stock is changing character perhaps... Does this mean it is moving away from a purely growth-driven stock? Is the market coming to terms with this?
Its just smoothing its growth to be consistent rather than explosive. People may or may not know this, but Apple grew its earnings 47% last year. When adding Q2, Q1, Q3 and Q4 revenue, its 47% higher than last year. Apple can't continue that type of explosive growth. Thus, what they will do is try to smoothen that income to a more consistent 30% growth rate.
Notice there is no real reason why Apple needs to do the subscription method of accounting for the iPhone. They chose to do so for income smoothing purposes. Its very obvious. I can't believe that Apple really expects us to believe that they decided to use this complicated method of revenue recognition that most people cannot fully grasp just to avoid charging people $10.00 for iPhone 2.0 upgrade? That doesn't make any sense at all. But it does when thinking about income smoothing.
The market won't have to come to terms with it because Apple will probably do a good job at managing expectations while bringing it growth rate down nice and easy.
Let me qualify this. What I'm saying here is that analysts, investors and any major players in Apple don't care about iPhone sales and revenue this quarter. It's not the focus of this earnings statement. This is in response to someone mentioning that Apple is going to tank due to analysts misstating that 700K iPhone sales results in revenue recognition this quarter.
The interesting thing is I wonder if the market will understand the subtleties regarding Apple very recently selling out 1 million phones in just a few days, when it just did 700,000 in an entire quarter. While Apple may be trying to smooth their income, their public's perception definitely is experiencing explosive growth. (Zing! I should be a writer... )
Its just smoothing its growth to be consistent rather than explosive. People may or may not know this, but Apple grew its earnings 47% last year. When adding Q2, Q1, Q3 and Q4 revenue, its 47% higher than last year. Apple can't continue that type of explosive growth. Thus, what they will do is try to smoothen that income to a more consistent 30% growth rate.
Notice there is no real reason why Apple needs to do the subscription method of accounting for the iPhone. They chose to do so for income smoothing purposes. Its very obvious. I can't believe that Apple really expects us to believe that they decided to use this complicated method of revenue recognition that most people cannot fully grasp just to avoid charging people $10.00 for iPhone 2.0 upgrade? That doesn't make any sense at all. But it does when thinking about income smoothing...
That's actually some pretty good insight, that really *no other analyst* seems to be offering. Maybe I've just been reading at all the wrong places.
Instead of pushing Apple to be on a massive growth path (as people may interpret from a lot of the other analysts), you're actually saying that Apple is in and of itself acknowledging that they are in a great position, but it's not sustainable.
Wow. This is new, from an analyst. Really, I'm not being facetious.
Because if some people are pushing for Apple to have say 20% of PC market share by the end of 2010, these same people don't realise that because of the size of the PC market in 2010 itself, this is not practical due to the amount of explosive growth required to attain such market share...
Quote:
Originally Posted by andyzaky
The market won't have to come to terms with it because Apple will probably do a good job at managing expectations while bringing it growth rate down nice and easy...
Ah, this makes sense in some way, due to the assumptions that people make about Apple simply because "its Tech". Given these assumptions, the jitters about the US and world economy, the looming election and Apple managing expectations, these are strong factors that limit huge gains (whatever that may imply, I'm not an investor) in AAPL stock prices over the next year or so. They could push $200 or so by the end of the year but there would still be a lot of shorting(?) over the next few months.
I think these numbers are outstanding. Apple always grew in large chunks of increases, I don't understand Wall St. As a shareholder (even small) I think Apple is a great investment. I don't see any other computer company investing in. Anyone?
Andy is the only one here that deals with the numbers and not off the top of the head opinions. At least his analysis has merit whereas others have various agendas. Sophisticated investors know the difference and respect it. People who have run public companies know that.
When you say "I own AAPL", no one thinks you mean you own the whole company. He owns stock in a hedge fund.
So you're saying I should lighten up because of the comment I made before he clarified his position? He said "I own a private hedge fund" - that is an unequivocal statement. Sure, he turned out to have used the wrong words, but how am I supposed to know that?
When you say I own AAPL, no one thinks you own the entire company. When you say "I own a private hedge fund", everyone thinks you are saying you own the entire thing, because that's what that means.
...... shifting from explosive growth to regular growth. Good managers are able to make the transition smoothly. Allowing the stock to change its character over time.
Wow, that's one heck of a sweeping generalization. Can you provide some examples of well-known companies that managed this 'gentle landing' process without their PEs falling or going sideways subsequently?
Wow, that's one heck of a sweeping generalization. Can you provide some examples of well-known companies that managed this 'gentle landing' process without their PEs falling or going sideways subsequently?
Doesn't happen. The fact is if you go from high growth to lower, your PE will fall and the stock will either drop quickly or go sideways for a while. You can't fight the laws of math.
Earnings out. Exceeds all expectations. But the USUAL LOW GUIDANCE!! Dammit!!!!
Stock at $159.
What are you complaining about? Were you hoping to sell this week? If not, I assume that you own and like the stock. So it's now on sale, buy more. The only people who should be upset are those who think it is not going to get back to 170 in the next month, and were hoping to sell.
Doesn't happen. The fact is if you go from high growth to lower, your PE will fall and the stock will either drop quickly or go sideways for a while. You can't fight the laws of math.
Comments
What, you think that the folks here need protection from remarks that they might not like? I find that attitude highly condescending, do you see yourself as a mother figure?
No, I don't mean to be condescending, I just see you guys ripping Andy a new a**hole.
..."income smoothing." It should help answer your question about shifting from explosive growth to regular growth. Good managers are able to make the transition smoothly. Allowing the stock to change its character over time...
That's actually a good point. Do you see this rarely in Nasdaq companies? Why is Apple different, what drives them to resist the temptation of raking in the big bucks during explosive growth?
You suggest the stock is changing character perhaps... Does this mean it is moving away from a purely growth-driven stock? Is the market coming to terms with this?
Hi Andy, welcome to AI Forums... Appreciate your articles and insight, but statements like that, well, the forum people here are pretty touchy.
Let me qualify this. What I'm saying here is that analysts, investors and any major players in Apple don't care about iPhone sales and revenue this quarter. It's not the focus of this earnings statement. This is in response to someone mentioning that Apple is going to tank due to analysts misstating that 700K iPhone sales results in revenue recognition this quarter.
Why do you think the stock is being punished harshly today down to $161.xx?
I own a private hedge fund and it looks like all the financial shorts are now shorting tech big time regardless of whether Apple blows out the numbers or not. It seems that for each iPhone that is sold, Apple sells 3 to 4 Macs. My family owns 5. I think the shorts should be taken out and shot on this one. What do you think?
Greg
Greg, let's consider what Andy is saying and what I have suggested now. Why is everyone shorting Apple so much? There are two questions.
A. Does Apple operate in a way (eg, income smoothing) that is counter to a lot of other Tech stocks? I mean, they're going to be selling over 20 million phones this year, from just a few million last year, and they're *deferring a huge chunk of that revenue*...
B. Does the market even know what the hell Apple is about? In this day and age, what the way they go about things is actually, pretty strange. Financials show a certain side of the story. But anyone that knows the company, will know how enigmatic it is. Does the market have any understanding of this? If not, well, then people will just treat it using whatever formula or estimate they use for most "Tech stocks".
That's actually a good point. Do you see this rarely in Nasdaq companies? Why is Apple different, what drives them to resist the temptation of raking in the big bucks during explosive growth?
You suggest the stock is changing character perhaps... Does this mean it is moving away from a purely growth-driven stock? Is the market coming to terms with this?
Its just smoothing its growth to be consistent rather than explosive. People may or may not know this, but Apple grew its earnings 47% last year. When adding Q2, Q1, Q3 and Q4 revenue, its 47% higher than last year. Apple can't continue that type of explosive growth. Thus, what they will do is try to smoothen that income to a more consistent 30% growth rate.
Notice there is no real reason why Apple needs to do the subscription method of accounting for the iPhone. They chose to do so for income smoothing purposes. Its very obvious. I can't believe that Apple really expects us to believe that they decided to use this complicated method of revenue recognition that most people cannot fully grasp just to avoid charging people $10.00 for iPhone 2.0 upgrade? That doesn't make any sense at all. But it does when thinking about income smoothing.
The market won't have to come to terms with it because Apple will probably do a good job at managing expectations while bringing it growth rate down nice and easy.
Let me qualify this. What I'm saying here is that analysts, investors and any major players in Apple don't care about iPhone sales and revenue this quarter. It's not the focus of this earnings statement. This is in response to someone mentioning that Apple is going to tank due to analysts misstating that 700K iPhone sales results in revenue recognition this quarter.
The interesting thing is I wonder if the market will understand the subtleties regarding Apple very recently selling out 1 million phones in just a few days, when it just did 700,000 in an entire quarter. While Apple may be trying to smooth their income, their public's perception definitely is experiencing explosive growth. (Zing! I should be a writer...
Its just smoothing its growth to be consistent rather than explosive. People may or may not know this, but Apple grew its earnings 47% last year. When adding Q2, Q1, Q3 and Q4 revenue, its 47% higher than last year. Apple can't continue that type of explosive growth. Thus, what they will do is try to smoothen that income to a more consistent 30% growth rate.
Notice there is no real reason why Apple needs to do the subscription method of accounting for the iPhone. They chose to do so for income smoothing purposes. Its very obvious. I can't believe that Apple really expects us to believe that they decided to use this complicated method of revenue recognition that most people cannot fully grasp just to avoid charging people $10.00 for iPhone 2.0 upgrade? That doesn't make any sense at all. But it does when thinking about income smoothing...
That's actually some pretty good insight, that really *no other analyst* seems to be offering. Maybe I've just been reading at all the wrong places.
Instead of pushing Apple to be on a massive growth path (as people may interpret from a lot of the other analysts), you're actually saying that Apple is in and of itself acknowledging that they are in a great position, but it's not sustainable.
Wow. This is new, from an analyst. Really, I'm not being facetious.
Because if some people are pushing for Apple to have say 20% of PC market share by the end of 2010, these same people don't realise that because of the size of the PC market in 2010 itself, this is not practical due to the amount of explosive growth required to attain such market share...
The market won't have to come to terms with it because Apple will probably do a good job at managing expectations while bringing it growth rate down nice and easy...
Ah, this makes sense in some way, due to the assumptions that people make about Apple simply because "its Tech". Given these assumptions, the jitters about the US and world economy, the looming election and Apple managing expectations, these are strong factors that limit huge gains (whatever that may imply, I'm not an investor) in AAPL stock prices over the next year or so. They could push $200 or so by the end of the year but there would still be a lot of shorting(?) over the next few months.
You own a hedge fund and you are asking an internet forum what to do?
(I wonder what your clients would think of that.)
Make a call and put your money where your mouth is.
I think most of us immediately saw through that lie
I think most of us immediately saw through that lie
Oh lighten up and cut the guy some slack.
When you say "I own AAPL", no one thinks you mean you own the whole company. He owns stock in a hedge fund.
Oh lighten up and cut the guy some slack.
When you say "I own AAPL", no one thinks you mean you own the whole company. He owns stock in a hedge fund.
So you're saying I should lighten up because of the comment I made before he clarified his position? He said "I own a private hedge fund" - that is an unequivocal statement. Sure, he turned out to have used the wrong words, but how am I supposed to know that?
When you say I own AAPL, no one thinks you own the entire company. When you say "I own a private hedge fund", everyone thinks you are saying you own the entire thing, because that's what that means.
...... shifting from explosive growth to regular growth. Good managers are able to make the transition smoothly. Allowing the stock to change its character over time.
Wow, that's one heck of a sweeping generalization. Can you provide some examples of well-known companies that managed this 'gentle landing' process without their PEs falling or going sideways subsequently?
Wow, that's one heck of a sweeping generalization. Can you provide some examples of well-known companies that managed this 'gentle landing' process without their PEs falling or going sideways subsequently?
Doesn't happen. The fact is if you go from high growth to lower, your PE will fall and the stock will either drop quickly or go sideways for a while. You can't fight the laws of math.
Stock at $159.
Earnings out. Exceeds all expectations. But the USUAL LOW GUIDANCE!! Dammit!!!!
Stock at $159.
What are you complaining about? Were you hoping to sell this week? If not, I assume that you own and like the stock. So it's now on sale, buy more. The only people who should be upset are those who think it is not going to get back to 170 in the next month, and were hoping to sell.
Doesn't happen. The fact is if you go from high growth to lower, your PE will fall and the stock will either drop quickly or go sideways for a while. You can't fight the laws of math.
That's what I would say too.....