At first I thought Apples share price drop was all about the world economy. It is now dawning on me that part of the problem is investors who STILL think that Apples success is solely due to the iPod.
When Apple posts continued high profits in the face of recession and declining iPod sales over the first and second quarters, then hopefully the reality of Apple being a multi horse pony will kickstart another upsurge.
I have never 'got' quite why people dont 'get it' with apple. But then I'm an atheist, I'm used to being in the switched on minority .
That's exactly what I'm saying. If you pick randomly, your portfolio is going to follow the index, e.g. nasdaq. If you claim your method beats random picking, you have found a method to beat the market. To my knowledge, there is no proven way to beat the market.
The indices don't contain all publicly traded companies, just select ones. And they're selected because they are the biggest and most successful companies. Meaning they have strong historical performance.
The indices have done well historically because they are made up of companies that have done well historically. If a company goes down the toilet, it ends up getting dumped from the index.
If you chose companies randomly from the ones in a given index, you might keep up with the index. But if you chose randomly from ALL publicly traded companies? Not likely.
The indices don't contain all publicly traded companies, just select ones. And they're selected because they are the biggest and most successful companies. Meaning they have strong historical performance.
The indices have done well historically because they are made up of companies that have done well historically. If a company goes down the toilet, it ends up getting dumped from the index.
If you chose companies randomly from the ones in a given index, you might keep up with the index. But if you chose randomly from ALL publicly traded companies? Not likely.
Forget about the word 'index'. If you pick randomly from a group of stocks, your selection will statistically speaking follow the group's performance. AFAIK there is no proven methodology to beat random picking, i.e. only picking the best performers from the last 10 years (or any other rule) will not result in better results.
She'd be wrong if it went below 120. For an investor, you could take a chance and buy now, or wait until it drops to around 120 (which may or may not happen). Either way, the point is that she considers the potential downside pretty minimal (10% down) compared to the potential upside (75% gain).
And I get the impression that she thinks it will go to 235 either way...it's just a question of whether there will be a drop first, and what timeframe it will take to get to 235.
Time to start? Apple obviously has been delivering products people want if they've had growth and increasing market share for how many consecutive quarters. Of course they can always continue to add more products people want, and improve the product line. And it's pretty clear what caused the price drop, one specific number in the earnings report.
On this list, 'time to start' means "Time to start making products aimed directly at a market of one... ME."
Some people here seem to forget that Stock Exchange is a game, just like horse racing. You are allowed to make educated guess (stock exchange is not totally random as is lottery or slot machines). If you win, you rake in money. If your bets are wrong, you loose money. You are allowed to decide when to pull your balls out of the game, so you can stop bleeding money if you find you are loosing too much (or take a profit if you think you cannot win any more).
Nobody can predict the future, including Morgan Stanley... What they offer is advice based on current trends and their understanding/knowledge of the various industries they are watching for you. But in the end, the investor (you !) are the sole responsible for your actions and its up to you to decide how to play. If you think you know better than Morgan Stanley (or anybody else for that matter), then all the power to you ! Go ahead : bet and become rich quick !
At first I thought Apples share price drop was all about the world economy. It is now dawning on me that part of the problem is investors who STILL think that Apples success is solely due to the iPod.
I don't know if that's true, but it makes sense. iPods are the most visible part of Apple's business.
The drop is too much to be explained just by the economic factors, and I'm not convinced that the MacWorld presentation would do it.
Quote:
When Apple posts continued high profits in the face of recession and declining iPod sales over the first and second quarters, then hopefully the reality of Apple being a multi horse pony will kickstart another upsurge.
I have never 'got' quite why people dont 'get it' with apple.
Hopefully iPod sales don't decline already. But iPods are about half of Apple's business, so if it doesn't grow much anymore, then other parts of the business would have to take over doubly to meet growth expectations.
I don't know if that's true, but it makes sense. iPods are the most visible part of Apple's business.
The drop is too much to be explained just by the economic factors, and I'm not convinced that the MacWorld presentation would do it.
Hopefully iPod sales don't decline already. But iPods are about half of Apple's business, so if it doesn't grow much anymore, then other parts of the business would have to take over doubly to meet growth expectations.
Ipods sales is only about 25% of Apple sales. The Mac, laptops, Itunes, MacOS and Iphone make up 75% of the sales. Please do some homework next time.
And remember, profit margins higher with the Mac sales.
For the past 10 years, remember that the Mac is the core of the company.
I suspect it will continue to be so moving forward, as iPhone and iPod Touch,
MacBook Touch, become the "feeders" for people into owning Mac laptops.
I loved all the Chicken Littles screaming that Apple is foregoing Macs because it came out with the iPod despite all the efforts with OS X and new designs. Then they piped back up again when Apple announced the iPhone, AppleTV and that they were dropping "Computer" from their name. Yet, most of Apple's products are running OS X and they consistently upgrade their Mac product line in HW, SW, and even a new type notebook type that fits into previously defined class.
From my POV the Mac is still the core of the company and everything has been done to sell more Macs.
Ipods sales is only about 25% of Apple sales. The Mac, laptops, Itunes, MacOS and Iphone make up 75% of the sales. Please do some homework next time.
I think you should do the same, flame boy. You were off more than I was for the most recent quarter. They grossed more with iPods than they did with the Mac hardware.
I think you should do the same, flame boy. You were off more than I was for the most recent quarter. They grossed more with iPods than they did with the Mac hardware.
I think both of you need to consider what drove APPL up into nose-bleed levels: the iPhone. So when the hype "stalled", the stock dove (also the prospect of a R******** cutting into iPod and Mac sales). So what is there in the next 6-9 months to pump up AAPL?: 16GB iPhone (yawn), SDK (for a whopping 100-200 widgets) yawn again. Expansion into Spain (yawn) and maybe Italy (humm...). 3G iPhone in the summer... too late to salvage FY2008, sorry (even with an early-adopter boost from Japan: there's only so much you can get from news stories of hundreds standing in line for iPhone).
And the iPod (which fueled the run-up pre-2008): no-refresh in the line (save for the candy-pink nano) until September. The next two quarterly financials will be great if they show iPod unit shipments up 10% y-o-y (proving to Wall Street that the market for MP3 players is saturated). The ASP inching up by $10-20 per quarter will be conveniently overlooked, as will Apple's strategy of migrating MP3player to multimedia player to wifi-application portable.
And for the Mac line? 40% y-o-y growth will be seen (again by Wall Street) as proof that the Mac resurgence has stalled (level or down q-t-q numbers). And as for Apple TV: there's no way for it to impact the bottom line (do the math: say 1M units at $250 asp x 1/8 deferred revenue accounting is less than 0.04B per quarter, and that's with gangbuster 1M units/quarter sales).
The bottom line is that Apple can continue to have +40% growth y-o-y, quarter to quarter and the outlook for AAPL will be "disappointing".
As a long-time (over twenty years) INVESTOR in AAPL, I expect (and welcome) 6-12 months of consolidation before the next big push in AAPL. What I think it will take to get AAPL moving again: the US economy works through its rec******(sluggish growth) period, the iPhone line expands to two/three additional form factors/features, movie rentals achieve critical mass (4-6000 titles), the next gen of iPods (with a larger-screen iTouch), and the Mac transition past Penryn. Until then, I can/will be patient.
I think both of you need to consider what drove APPL up into nose-bleed levels: the iPhone. So when the hype "stalled", the stock dove (also the prospect of a R******** cutting into iPod and Mac sales). So what is there in the next 6-9 months to pump up AAPL?: 16GB iPhone (yawn), SDK (for a whopping 100-200 widgets) yawn again. Expansion into Spain (yawn) and maybe Italy (humm...). 3G iPhone in the summer... too late to salvage FY2008, sorry (even with an early-adopter boost from Japan: there's only so much you can get from news stories of hundreds standing in line for iPhone).
And the iPod (which fueled the run-up pre-2008): no-refresh in the line (save for the candy-pink nano) until September. The next two quarterly financials will be great if they show iPod unit shipments up 10% y-o-y (proving to Wall Street that the market for MP3 players is saturated). The ASP inching up by $10-20 per quarter will be conveniently overlooked, as will Apple's strategy of migrating MP3player to multimedia player to wifi-application portable.
And for the Mac line? 40% y-o-y growth will be seen (again by Wall Street) as proof that the Mac resurgence has stalled (level or down q-t-q numbers). And as for Apple TV: there's no way for it to impact the bottom line (do the math: say 1M units at $250 asp x 1/8 deferred revenue accounting is less than 0.04B per quarter, and that's with gangbuster 1M units/quarter sales).
The bottom line is that Apple can continue to have +40% growth y-o-y, quarter to quarter and the outlook for AAPL will be "disappointing".
As a long-time (over twenty years) INVESTOR in AAPL, I expect (and welcome) 6-12 months of consolidation before the next big push in AAPL. What I think it will take to get AAPL moving again: the US economy works through its rec******(sluggish growth) period, the iPhone line expands to two/three additional form factors/features, movie rentals achieve critical mass (4-6000 titles), the next gen of iPods (with a larger-screen iTouch), and the Mac transition past Penryn. Until then, I can/will be patient.
Just think of a recession as 'recess'. Time to go out and play.
I think both of you need to consider what drove APPL up into nose-bleed levels: the iPhone. So when the hype "stalled", the stock dove (also the prospect of a R******** cutting into iPod and Mac sales). So what is there in the next 6-9 months to pump up AAPL?: 16GB iPhone (yawn), SDK (for a whopping 100-200 widgets) yawn again. Expansion into Spain (yawn) and maybe Italy (humm...). 3G iPhone in the summer... too late to salvage FY2008, sorry (even with an early-adopter boost from Japan: there's only so much you can get from news stories of hundreds standing in line for iPhone)....And the iPod (which fueled the run-up pre-2008): no-refresh in the line (save for the candy-pink nano) until September....
In this case, you're assuming a lot about their product lines, which, shall we say, we've seen time and time again that Apple always has Aces up their sleeves. In the creative industry, they call it "editing out your best idea (or best line of the film)". Like somewhere in Turkey or something where they make carpets and leave out a few threads or something because only God is perfect or something like that. Clearly I am rambling here but the point is, We have NO FRIGGIN CLUE about what Apple is about to release. Product refreshes, yes, but the stellar stuff is in reserve.
Quote:
Originally Posted by David Stevenson
...The bottom line is that Apple can continue to have +40% growth y-o-y, quarter to quarter and the outlook for AAPL will be "disappointing"....
The thing is, Apple is well poised normally for the cyclical nature of their Quarters. Oct-Dec is always through the roof, then through the year, gradual increases based on Year-Ago Quarter.
At least Apple is fiscally sensible enough that they don't set insane targets (at least externally) of Jan-Mar or even Apr-June quarters beating the most recent Oct-Dec numbers.
Quote:
Originally Posted by David Stevenson
As a long-time (over twenty years) INVESTOR in AAPL, I expect (and welcome) 6-12 months of consolidation before the next big push in AAPL. What I think it will take to get AAPL moving again: the US economy works through its rec******(sluggish growth) period, the iPhone line expands to two/three additional form factors/features, movie rentals achieve critical mass (4-6000 titles), the next gen of iPods (with a larger-screen iTouch), and the Mac transition past Penryn. Until then, I can/will be patient.
I feel too that a consolidation through $150 to the middle of the year, and then ramp to $250 in middle 2009, would be nice. Two problems though, the market is probably very volatile over the next year, so we'll see spikes to $180, $200+? by the end of the year, and a lot of knee-jerks that will kick it to $120.
The other problem is that as mentioned previously, Apple has some excellent stuff in reserve. Just the gradual expansions you mention are definitely going to be there. But there will be more.
....What I think it will take to get AAPL moving again: the US economy works through its rec******(sluggish growth) period...
I have a vested interest in seeing AAPL get as high as possible. However, we all know how ridiculously "corrupt" (not as in bribes but more like corrupted hard disks) the finance industry is.
I'm happy for what AAPL is, and I'd like to see it relatively unmolested.
Comments
When Apple posts continued high profits in the face of recession and declining iPod sales over the first and second quarters, then hopefully the reality of Apple being a multi horse pony will kickstart another upsurge.
I have never 'got' quite why people dont 'get it' with apple. But then I'm an atheist, I'm used to being in the switched on minority .
That's exactly what I'm saying. If you pick randomly, your portfolio is going to follow the index, e.g. nasdaq. If you claim your method beats random picking, you have found a method to beat the market. To my knowledge, there is no proven way to beat the market.
The indices don't contain all publicly traded companies, just select ones. And they're selected because they are the biggest and most successful companies. Meaning they have strong historical performance.
The indices have done well historically because they are made up of companies that have done well historically. If a company goes down the toilet, it ends up getting dumped from the index.
If you chose companies randomly from the ones in a given index, you might keep up with the index. But if you chose randomly from ALL publicly traded companies? Not likely.
But then I'm an atheist, I'm used to being in the switched on minority .
The indices don't contain all publicly traded companies, just select ones. And they're selected because they are the biggest and most successful companies. Meaning they have strong historical performance.
The indices have done well historically because they are made up of companies that have done well historically. If a company goes down the toilet, it ends up getting dumped from the index.
If you chose companies randomly from the ones in a given index, you might keep up with the index. But if you chose randomly from ALL publicly traded companies? Not likely.
Forget about the word 'index'. If you pick randomly from a group of stocks, your selection will statistically speaking follow the group's performance. AFAIK there is no proven methodology to beat random picking, i.e. only picking the best performers from the last 10 years (or any other rule) will not result in better results.
She'd be wrong if it went below 120. For an investor, you could take a chance and buy now, or wait until it drops to around 120 (which may or may not happen). Either way, the point is that she considers the potential downside pretty minimal (10% down) compared to the potential upside (75% gain).
And I get the impression that she thinks it will go to 235 either way...it's just a question of whether there will be a drop first, and what timeframe it will take to get to 235.
Time to start? Apple obviously has been delivering products people want if they've had growth and increasing market share for how many consecutive quarters. Of course they can always continue to add more products people want, and improve the product line. And it's pretty clear what caused the price drop, one specific number in the earnings report.
On this list, 'time to start' means "Time to start making products aimed directly at a market of one... ME."
First, there is no statement telling investors to buy.
They are 'researchers' which severely curtails such activity.
Nobody can predict the future, including Morgan Stanley... What they offer is advice based on current trends and their understanding/knowledge of the various industries they are watching for you. But in the end, the investor (you !) are the sole responsible for your actions and its up to you to decide how to play. If you think you know better than Morgan Stanley (or anybody else for that matter), then all the power to you ! Go ahead : bet and become rich quick !
At first I thought Apples share price drop was all about the world economy. It is now dawning on me that part of the problem is investors who STILL think that Apples success is solely due to the iPod.
I don't know if that's true, but it makes sense. iPods are the most visible part of Apple's business.
The drop is too much to be explained just by the economic factors, and I'm not convinced that the MacWorld presentation would do it.
When Apple posts continued high profits in the face of recession and declining iPod sales over the first and second quarters, then hopefully the reality of Apple being a multi horse pony will kickstart another upsurge.
I have never 'got' quite why people dont 'get it' with apple.
Hopefully iPod sales don't decline already. But iPods are about half of Apple's business, so if it doesn't grow much anymore, then other parts of the business would have to take over doubly to meet growth expectations.
I don't know if that's true, but it makes sense. iPods are the most visible part of Apple's business.
The drop is too much to be explained just by the economic factors, and I'm not convinced that the MacWorld presentation would do it.
Hopefully iPod sales don't decline already. But iPods are about half of Apple's business, so if it doesn't grow much anymore, then other parts of the business would have to take over doubly to meet growth expectations.
Ipods sales is only about 25% of Apple sales. The Mac, laptops, Itunes, MacOS and Iphone make up 75% of the sales. Please do some homework next time.
Ipods sales is only about 25% of Apple sales. The Mac, laptops, Itunes,
MacOS and Iphone make up 75% of the sales. Please do some homework next time.
And remember, profit margins higher with the Mac sales.
For the past 10 years, remember that the Mac is the core of the company.
I suspect it will continue to be so moving forward, as iPhone and iPod Touch,
MacBook Touch, become the "feeders" for people into owning Mac laptops.
And remember, profit margins higher with the Mac sales.
For the past 10 years, remember that the Mac is the core of the company.
I suspect it will continue to be so moving forward, as iPhone and iPod Touch,
MacBook Touch, become the "feeders" for people into owning Mac laptops.
I loved all the Chicken Littles screaming that Apple is foregoing Macs because it came out with the iPod despite all the efforts with OS X and new designs. Then they piped back up again when Apple announced the iPhone, AppleTV and that they were dropping "Computer" from their name. Yet, most of Apple's products are running OS X and they consistently upgrade their Mac product line in HW, SW, and even a new type notebook type that fits into previously defined class.
From my POV the Mac is still the core of the company and everything has been done to sell more Macs.
Ipods sales is only about 25% of Apple sales. The Mac, laptops, Itunes, MacOS and Iphone make up 75% of the sales. Please do some homework next time.
I think you should do the same, flame boy. You were off more than I was for the most recent quarter. They grossed more with iPods than they did with the Mac hardware.
http://images.apple.com/pr/pdf/q108data_sum.pdf
Apple's iPod hardware business was 41%
Mac hardware 37%
iTunes, iPod services (applecare?), iPod sccessories 8.5%
iPhone & related 2.5%
Software, Service and Other Sales 6.5% (Leopard was just part of this)
If I say that I meant just the iPod units themselves, then I was within 9%.
If I were to combine iPod hardware & services, that gets me very close to 50% of Apple's business, within one percent.
I think you should do the same, flame boy. You were off more than I was for the most recent quarter. They grossed more with iPods than they did with the Mac hardware.
I think both of you need to consider what drove APPL up into nose-bleed levels: the iPhone. So when the hype "stalled", the stock dove (also the prospect of a R******** cutting into iPod and Mac sales). So what is there in the next 6-9 months to pump up AAPL?: 16GB iPhone (yawn), SDK (for a whopping 100-200 widgets) yawn again. Expansion into Spain (yawn) and maybe Italy (humm...). 3G iPhone in the summer... too late to salvage FY2008, sorry (even with an early-adopter boost from Japan: there's only so much you can get from news stories of hundreds standing in line for iPhone).
And the iPod (which fueled the run-up pre-2008): no-refresh in the line (save for the candy-pink nano) until September. The next two quarterly financials will be great if they show iPod unit shipments up 10% y-o-y (proving to Wall Street that the market for MP3 players is saturated). The ASP inching up by $10-20 per quarter will be conveniently overlooked, as will Apple's strategy of migrating MP3player to multimedia player to wifi-application portable.
And for the Mac line? 40% y-o-y growth will be seen (again by Wall Street) as proof that the Mac resurgence has stalled (level or down q-t-q numbers). And as for Apple TV: there's no way for it to impact the bottom line (do the math: say 1M units at $250 asp x 1/8 deferred revenue accounting is less than 0.04B per quarter, and that's with gangbuster 1M units/quarter sales).
The bottom line is that Apple can continue to have +40% growth y-o-y, quarter to quarter and the outlook for AAPL will be "disappointing".
As a long-time (over twenty years) INVESTOR in AAPL, I expect (and welcome) 6-12 months of consolidation before the next big push in AAPL. What I think it will take to get AAPL moving again: the US economy works through its rec******(sluggish growth) period, the iPhone line expands to two/three additional form factors/features, movie rentals achieve critical mass (4-6000 titles), the next gen of iPods (with a larger-screen iTouch), and the Mac transition past Penryn. Until then, I can/will be patient.
I think both of you need to consider what drove APPL up into nose-bleed levels: the iPhone. So when the hype "stalled", the stock dove (also the prospect of a R******** cutting into iPod and Mac sales). So what is there in the next 6-9 months to pump up AAPL?: 16GB iPhone (yawn), SDK (for a whopping 100-200 widgets) yawn again. Expansion into Spain (yawn) and maybe Italy (humm...). 3G iPhone in the summer... too late to salvage FY2008, sorry (even with an early-adopter boost from Japan: there's only so much you can get from news stories of hundreds standing in line for iPhone).
And the iPod (which fueled the run-up pre-2008): no-refresh in the line (save for the candy-pink nano) until September. The next two quarterly financials will be great if they show iPod unit shipments up 10% y-o-y (proving to Wall Street that the market for MP3 players is saturated). The ASP inching up by $10-20 per quarter will be conveniently overlooked, as will Apple's strategy of migrating MP3player to multimedia player to wifi-application portable.
And for the Mac line? 40% y-o-y growth will be seen (again by Wall Street) as proof that the Mac resurgence has stalled (level or down q-t-q numbers). And as for Apple TV: there's no way for it to impact the bottom line (do the math: say 1M units at $250 asp x 1/8 deferred revenue accounting is less than 0.04B per quarter, and that's with gangbuster 1M units/quarter sales).
The bottom line is that Apple can continue to have +40% growth y-o-y, quarter to quarter and the outlook for AAPL will be "disappointing".
As a long-time (over twenty years) INVESTOR in AAPL, I expect (and welcome) 6-12 months of consolidation before the next big push in AAPL. What I think it will take to get AAPL moving again: the US economy works through its rec******(sluggish growth) period, the iPhone line expands to two/three additional form factors/features, movie rentals achieve critical mass (4-6000 titles), the next gen of iPods (with a larger-screen iTouch), and the Mac transition past Penryn. Until then, I can/will be patient.
Just think of a recession as 'recess'. Time to go out and play.
And the iPod (which fueled the run-up pre-2008): no-refresh in the line (save for the candy-pink nano) until September.
Do you think this is really a problem? Isn't it unrealistic to expect twice a year updates?
And for the Mac line? 40% y-o-y growth will be seen (again by Wall Street) as proof that the Mac resurgence has stalled (level or down q-t-q numbers).
How is 40% seen as a stall? It's usually not that good. Compared to the industry as a whole, that's very good.
I think both of you need to consider what drove APPL up into nose-bleed levels: the iPhone. So when the hype "stalled", the stock dove (also the prospect of a R******** cutting into iPod and Mac sales). So what is there in the next 6-9 months to pump up AAPL?: 16GB iPhone (yawn), SDK (for a whopping 100-200 widgets) yawn again. Expansion into Spain (yawn) and maybe Italy (humm...). 3G iPhone in the summer... too late to salvage FY2008, sorry (even with an early-adopter boost from Japan: there's only so much you can get from news stories of hundreds standing in line for iPhone)....And the iPod (which fueled the run-up pre-2008): no-refresh in the line (save for the candy-pink nano) until September....
In this case, you're assuming a lot about their product lines, which, shall we say, we've seen time and time again that Apple always has Aces up their sleeves. In the creative industry, they call it "editing out your best idea (or best line of the film)". Like somewhere in Turkey or something where they make carpets and leave out a few threads or something because only God is perfect or something like that. Clearly I am rambling here but the point is, We have NO FRIGGIN CLUE about what Apple is about to release. Product refreshes, yes, but the stellar stuff is in reserve.
...The bottom line is that Apple can continue to have +40% growth y-o-y, quarter to quarter and the outlook for AAPL will be "disappointing"....
The thing is, Apple is well poised normally for the cyclical nature of their Quarters. Oct-Dec is always through the roof, then through the year, gradual increases based on Year-Ago Quarter.
At least Apple is fiscally sensible enough that they don't set insane targets (at least externally) of Jan-Mar or even Apr-June quarters beating the most recent Oct-Dec numbers.
As a long-time (over twenty years) INVESTOR in AAPL, I expect (and welcome) 6-12 months of consolidation before the next big push in AAPL. What I think it will take to get AAPL moving again: the US economy works through its rec******(sluggish growth) period, the iPhone line expands to two/three additional form factors/features, movie rentals achieve critical mass (4-6000 titles), the next gen of iPods (with a larger-screen iTouch), and the Mac transition past Penryn. Until then, I can/will be patient.
I feel too that a consolidation through $150 to the middle of the year, and then ramp to $250 in middle 2009, would be nice. Two problems though, the market is probably very volatile over the next year, so we'll see spikes to $180, $200+? by the end of the year, and a lot of knee-jerks that will kick it to $120.
The other problem is that as mentioned previously, Apple has some excellent stuff in reserve. Just the gradual expansions you mention are definitely going to be there. But there will be more.
....What I think it will take to get AAPL moving again: the US economy works through its rec******(sluggish growth) period...
I have a vested interest in seeing AAPL get as high as possible. However, we all know how ridiculously "corrupt" (not as in bribes but more like corrupted hard disks) the finance industry is.
I'm happy for what AAPL is, and I'd like to see it relatively unmolested.