Ivy league economics degree, founded the investing club at said University.
You can not like me, but listening to Zaky (outside the numerical analysis, which I have no argument with) is inviting bad investing decisions. He blames all sorts of the wrong things for what has happened to his (and my) AAPL stock.
It doesn't surprise me that some people are glad to read what he's writing - he likes to give people someone to blame. Makes people feel good to be able to be angry at someone, rather than have to blame themselves for not understanding how the market functions and for not seeing the fall coming (I didn't see it coming either). But it's pointless.
Your degree or accomplishments don't really mean much just as many of these well respected in the industry analysts don't amount to shit! I didn't say that to offend you just being cut throat.
It's funny as the only experience I've had in the market was my own reading and following the market which isn't much. However, I called a few family and friends about a week or two prior to the Oct. event (I follow Apple so I'm the go to guy for Apple) and said put in your stop losses. We all did and we were all stopped out from $165-$175 and we all have purchased positions near its low. So when you say "I didn't see it coming either" and you have the accomplishments you have I have to ask you this. How is it that am I was able to see the stock collapsing at some point in the near future and you didn't? As Andy was saying in a sense, Apple has ALWAYS been affected by the analysts, market fears, etc. by much larger unwarranted pull backs then its tech industry counterparts.
I don't doubt that many big wigs are playing the stock as-well. Like Cramer (I don't watch him just hear his suggestions from colleagues) says sell, and then Apple goes down so then everyone praises him. Well, duh! If so many people respect him and follow his guidance then when he says sell everyone sells and the stock goes down. He then looks like a god and you can't tell me he has alternative motives by telling people what they should do. I just believe there are many people on top manipulating the stock to make money as it's so volatile to BS unwarranted speculation. (to lower it or raise it) Pay attention to that and you should be much better off in trading Apple. (it's worked for me since '97)
In my opinion, AAPL price during the last two-three months is due primarily to hedge funds and mutual funds forced selling for cash to meet redemption demands. A recent survey of hedge funds showed AAPL holdings in the top ten for all the funds listed in the article. Fortunately, the number of hedge funds has contracted by about ten percent in the last few months.
I know, doesn't it suck when someone says "you're not as well informed as you think you are" and you have to reply by listing your qualifications? And then everyone gets bitter because they think your high qualifications are elitist? What a pain it is to be educated.
My issue wasn't with the fact that you were defending yourself, it's the manner in which it was done. Simply being from an Ivy League school does not automatically make you more informed than others. To say I am less informed because my business management degree is from a Big Ten school and not an Ivy League school would be ignorant. To say you are more informed because you went to an Ivy League school is the same thing. I am not doubting your credentials, but just try to be a bit more humble about them, and people won't be so offended. You and Andy obviously have different opinions about this topic, but it is hard to argue that anybody is right or wrong. Something like the stock market is so volatile, it's almost impossible to predict at times. All Andy is trying to do is make sense of why it is happening, and most of the points he made are very valid. I did not see it as whining or shifting blame, just telling things how they are in an objective manner.
Please re-read YOUR post in 6 months and see how wrong you are. There is no expansion in foreign markets. Not at all to the scale it could be. Sales will not increase in foreign markets. The United States is not the only country going through economic crisis. The stock market around the world is suffering right now and thousands of jobs are being lost in markets in; Asia, Europe, North/South America, and Australia. We are not the only country with a decline so the global market is not going to rescue any company at this point.
Ya and the primary driving force behind the Global recession is the fact that the US is (that percentage is falling every year and that's scary) the biggest world's economy. The fact that the US is mostly a bunch of shoppers of junk and crap we don't need. We consume so much that if our economy falls then everyone else is affected. Other country's companies then need to adjust there estimates as their most likely #1 customer the US will not be buying as much. Toyota or Hondas stock is down because we won't be buying as many cars from them so they have to figure that into their numbers. So to say the global recession will affect Apple so terrible is ill thought. Now the spending on Apple products may go down which will affect Apple's profits but with the new products in the pipeline, retail store expansion, iPhone expansion, etc. I would bet (11 years strong and I've been right just about everytime except for 9/11 which no one saw) on Apple making up for most of the "recessions" cause for less profit. True they probably won't have growth that we have gotten accustomed to but decent growth in the current economy is pretty amazing to me.
Also as someone else said it's more your Walmart shoppers that are spending less. Those are the demographic that buy the cheapest product. They don't see that spending a bit more now saves money/hassles in the long run. People will continue to buy computers as they are needed and new people will continue to recognize Apple as a better choice.
She's a hack who should be driving a cab. Another thoughtful article by Andy Zak. I'm long AAPL and believe it's undervalued. I'd like to see AAPL develop a succession plan when things stabilize. I have the highest regard for SJ but have witnessed the shorts gyp the market on 4 occasions this year with orchestrated false rumors about his health.
I know, doesn't it suck when someone says "you're not as well informed as you think you are" and you have to reply by listing your qualifications? And then everyone gets bitter because they think your high qualifications are elitist? What a pain it is to be educated.
"Well-educated" is not necessarily "well-informed".
Edcation gives you a degree, but information can give you a fat bank account.
The reason Appl is down will always be "the market", fundamentally. Whether or not that is a result of "the market" panicking over AIG/Housing Crisis or a result of "the market" just being scared of the technology it does not understand and clueless about the fact that Apple is one of, if not the most, well-run, profitable companies in the world (and bullet-proof to recession, as far as I can see) is irrelevant because you can simply say "its the market, Stupid."
My quest is not to give a sh-t about "the market" other than to figure out exactly why it is the market doesn't "get it" insofar as APPL is concerned.
This isn't fanboy BS, APPL on paper with all the numbers in the open and the math calculated, crushes all competition, has been doing so for 8 years, and is on track to continue doing so for at least 8 more.
She's a hack who should be driving a cab. Another thoughtful article by Andy Zak. I'm long AAPL and believe it's undervalued. I'd like to see AAPL develop a succession plan when things stabilize. I have the highest regard for SJ but have witnessed the shorts gyp the market on 4 occasions this year with orchestrated false rumors about his health.
They undoubtedly have a succession plan. They just do not publicize it. In fact, if they were
to suddenly publicize a succession plan, the stock decline that would result would dwarf
the small temporary declines you have seen following unfounded rumors.
Andy, I would point out that one of the contributing factors, right around the time Huberty and others were downgrading Apple's price targets, and one of the reasons cited by those analysts, was the Changewave surveys done by Paul Carton.
If you study what Paul published, you'll see that his surveys had a troubling x-axis where the periods between surveys changed from 3 or 4 months to 1 month intervals. Changing intervals, randomly, particularly to shorter periods, can add noise to the signal, and give confusing results.
It seems clear to me that Carton was trying to pump up his prognostication ability, and was presenting the information in a way to support his story. Of course, that story was a somewhat negative one for Apple sales. So, if you are going to criticize analysts like Huberty, you should also take a look at Paul Carton and his Changewave surveys.
Here's a link to the report that analysts like Huberty used for their price target downgrades:
Ivy league economics degree, founded the investing club at said University.
I've recruited at all the Ivies for a well-known investment bank, and I can confidently say, that the type of students that would type the above were from Wharton.
I've recruited at all the Ivies for a well-known investment bank, and I can confidently say, that the type of students that would type the above were from Wharton.
Interesting. I got into Wharton for b-school and Penn for law school. Philly is a cool place but I simply couldn't justify leaving sunny California especially when my wife got into the same graduate school. Couldn't be happier that I stayed.
I've recruited at all the Ivies for a well-known investment bank, and I can confidently say, that the type of students that would type the above were from Wharton.
By the way, I've been following some of your articles you publish at MacDailyNews. I think you have a really good handle on Apple would like to discuss some issues with you. E-mail me when a get a chance. Perhaps you could help me out with some writing. I'm looking for some people to do some writing for bullish cross and I think you should write on a more regular basis.
I've recruited at all the Ivies for a well-known investment bank, and I can confidently say, that the type of students that would type the above were from Wharton.
If you are 17, and one of your parents just lost their job...will you be going out and getting a $1800 laptop for christmas?
If you lost your job, would you be going out getting a $1400 laptop just to have it?
Apple is down because consumers are hurting. That simple.
Color me skeptical. People have been saying for the last ten months that Apple's sales were hurting, losing market share, their customers can't afford their stuff, yet, the last three quarterly reports showed gangbusters growth. Not only that, in a recession, luxury brands tend to hold their own better than regular brands. I'd worry more about everyone else.
I wouldn't say Apples under valued, just that at the start of the year it was over valued. You buy stock to make money in 2 ways, either by hoping the value goes up and you sell it or your going to hold onto it and earn dividends. For the last 5 years Apple has been delivering what rumor sites have been suggested as slow as it could to keep the popularity going (how many years did we wait for an iPhone) and along the way the value went up and up. But now all the big things that were talked about have been released and its hard to see where there going to go next. In which case it was time to sell and get the money from increase in value.
Second reason for a low value is the element of risk. Higher the risk, the lower the value. Its a world financial crisis and Apple sells to the public. End of the day, sales for them will get harder. People may just wait and not switch but its still a loss on income. Don't get me wrong Apple will make it through but its dividends may not be as high as others. Microsoft and Google on the other hand don't have much to worry about. People don't change search engine due to a recession and Microsoft makes a huge chunk of its money from licenses. Websites arn't going to stop using Windows Server because of a recession, and everyone else still needs to pay for their Windows and Office licenses to keep going. Thats why they have a low value, it doesn't matter what they report now, its what the future looks like. Remember the effects of the financial crisis have not yet hit and wont for a few more months.
I wouldn't say Apples under valued, just that at the start of the year it was over valued. You buy stock to make money in 2 ways, either by hoping the value goes up and you sell it or your going to hold onto it and earn dividends. For the last 5 years Apple has been delivering what rumor sites have been suggested as slow as it could to keep the popularity going (how many years did we wait for an iPhone) and along the way the value went up and up. But now all the big things that were talked about have been released and its hard to see where there going to go next. In which case it was time to sell and get the money from increase in value.
Second reason for a low value is the element of risk. Higher the risk, the lower the value. Its a world financial crisis and Apple sells to the public. End of the day, sales for them will get harder. People may just wait and not switch but its still a loss on income. Don't get me wrong Apple will make it through but its dividends may not be as high as others. Microsoft and Google on the other hand don't have much to worry about. People don't change search engine due to a recession and Microsoft makes a huge chunk of its money from licenses. Websites arn't going to stop using Windows Server because of a recession, and everyone else still needs to pay for their Windows and Office licenses to keep going. Thats why they have a low value, it doesn't matter what they report now, its what the future looks like. Remember the effects of the financial crisis have not yet hit and wont for a few more months.
Come on, if anyone has a future it's Apple. It may be hard for you to see the direction Apple are headed, but it's clear as day for me. SOO much room for expansion, and many new lifestyle product possibilities running cocoa touch,netbook, gaming, ATV mk II. A 2billion mobile market to tap.. I could go on all day.
Ya and the primary driving force behind the Global recession is the fact that the US is (that percentage is falling every year and that's scary) the biggest world's economy. The fact that the US is mostly a bunch of shoppers of junk and crap we don't need. We consume so much that if our economy falls then everyone else is affected. Other country's companies then need to adjust there estimates as their most likely #1 customer the US will not be buying as much. Toyota or Hondas stock is down because we won't be buying as many cars from them so they have to figure that into their numbers. So to say the global recession will affect Apple so terrible is ill thought. Now the spending on Apple products may go down which will affect Apple's profits but with the new products in the pipeline, retail store expansion, iPhone expansion, etc. I would bet (11 years strong and I've been right just about everytime except for 9/11 which no one saw) on Apple making up for most of the "recessions" cause for less profit. True they probably won't have growth that we have gotten accustomed to but decent growth in the current economy is pretty amazing to me.
Also as someone else said it's more your Walmart shoppers that are spending less. Those are the demographic that buy the cheapest product. They don't see that spending a bit more now saves money/hassles in the long run. People will continue to buy computers as they are needed and new people will continue to recognize Apple as a better choice.
I agree with what your saying. My original post was merely stating we aren't the only company with falling stocks/economy. Now what you said at the end there. The people who shop at Wal Mart also Purchase iPods.... The entire line of them. They also purchase iPhones.... They also purchase music on iTunes.... They also purchase iPhone apps... so if all the "Wal Mart" Shoppers stop spending at Wal Mart they will also stop spending on Apple.
Investors who risk their own money pay special attention to the trailing Price/Earnings multiple.
According to that metric, Apple's valuation is higher than Microsoft, Cisco, IBM, Intel and Hewlet-Packard. Unless you are dreaming, I cannot see why Apple stock should be more expensive than stock from well established, widely held companies such as Microsoft, Cisco, IBM, Intel and Hewlet-Packard.
Given that Apple's products are limited to the consumer market (sorry, no competitively priced office computer), and overpriced by $300 to $500, I cannot see how Apple could climb out of its self imposed 5% market share.
And the current world recession suggests that Appple stock is already overvalued because Apple will not be able to maintain its historic or projected market growth in a recession market place where consumers are drawn away from overpriced, uncompetitive consumer products.
I see further declines to come for Apple's stock, given the recession market and Steve Jobs' unwillingless to lower prices.
Investors who risk their own money pay special attention to the trailing Price/Earnings multiple.
That might be true, but the investors who matter, those who invest others' money, focus on free cash flow more closely, because that's a far more accurate measure of how much money a company is going to be able to return to stockholders in the future.
When the market finally finds a decent bottom and starts to move up again (we may have already seen that point, but no one can say for sure until after the fact) Apple stock should have no trouble leading the market back up.
While the analysis has a few simplifications that could be construed as flaws, the gist of it is pretty accurate.
No matter what metric you pick, AAPL is undervalued.
But if you use the Non-GAAP P/E and growth, I think you are significantly over-valuing past events. The question is ultimately what will Apple do in the next year to continue to grow Non-GAAP earnings. (The fact that GAAP earnings will have healthy growth is fairly obvious given the smoothing effect of deferred earnings.)
I don't worry much about iPod sales; they will do well enough. Macs will likely see a small drop after the initial pent-up demand is satisfied with the laptop updates, especially given the broader economy. iTunes revenue will keep growing as they offer more compelling services. Gaming is also pretty under-valued as a growth driver for iPods and iPhones. Snow Leopard won't have quite the same upgrading uptick as Leopard or Tiger did from what I see, although it might help drive a hardware upgrade cycle.
The big risks are international sales (with stronger dollar and price updates the Mac isn't as competitive as it was before), iPhone competition (there are other offerings out there that are slowly becoming attractive; they just need to gain mind-share), and a shifting product mix in the broader market that Apple may choose not to address.
On the last item, the Netbooks come to mind-- how will Apple make a compelling product that does not canibalize other sales? Also, for iPhones, an expensive (albeit subsidized) device that is carrier locked was a great model to operate in 3-5 years ago, but as functionality of other devices improves will this still hold true?
As always this time of year, I guess we will have to wait until MWSF to see what growth drivers (other than just brand) Apple will have in the coming year.
Comments
Keep thinking that.
Ivy league economics degree, founded the investing club at said University.
You can not like me, but listening to Zaky (outside the numerical analysis, which I have no argument with) is inviting bad investing decisions. He blames all sorts of the wrong things for what has happened to his (and my) AAPL stock.
It doesn't surprise me that some people are glad to read what he's writing - he likes to give people someone to blame. Makes people feel good to be able to be angry at someone, rather than have to blame themselves for not understanding how the market functions and for not seeing the fall coming (I didn't see it coming either). But it's pointless.
Your degree or accomplishments don't really mean much just as many of these well respected in the industry analysts don't amount to shit! I didn't say that to offend you just being cut throat.
It's funny as the only experience I've had in the market was my own reading and following the market which isn't much. However, I called a few family and friends about a week or two prior to the Oct. event (I follow Apple so I'm the go to guy for Apple) and said put in your stop losses. We all did and we were all stopped out from $165-$175 and we all have purchased positions near its low. So when you say "I didn't see it coming either" and you have the accomplishments you have I have to ask you this. How is it that am I was able to see the stock collapsing at some point in the near future and you didn't? As Andy was saying in a sense, Apple has ALWAYS been affected by the analysts, market fears, etc. by much larger unwarranted pull backs then its tech industry counterparts.
I don't doubt that many big wigs are playing the stock as-well. Like Cramer (I don't watch him just hear his suggestions from colleagues) says sell, and then Apple goes down so then everyone praises him. Well, duh! If so many people respect him and follow his guidance then when he says sell everyone sells and the stock goes down. He then looks like a god and you can't tell me he has alternative motives by telling people what they should do. I just believe there are many people on top manipulating the stock to make money as it's so volatile to BS unwarranted speculation. (to lower it or raise it) Pay attention to that and you should be much better off in trading Apple. (it's worked for me since '97)
I know, doesn't it suck when someone says "you're not as well informed as you think you are" and you have to reply by listing your qualifications? And then everyone gets bitter because they think your high qualifications are elitist? What a pain it is to be educated.
My issue wasn't with the fact that you were defending yourself, it's the manner in which it was done. Simply being from an Ivy League school does not automatically make you more informed than others. To say I am less informed because my business management degree is from a Big Ten school and not an Ivy League school would be ignorant. To say you are more informed because you went to an Ivy League school is the same thing. I am not doubting your credentials, but just try to be a bit more humble about them, and people won't be so offended. You and Andy obviously have different opinions about this topic, but it is hard to argue that anybody is right or wrong. Something like the stock market is so volatile, it's almost impossible to predict at times. All Andy is trying to do is make sense of why it is happening, and most of the points he made are very valid. I did not see it as whining or shifting blame, just telling things how they are in an objective manner.
Please re-read YOUR post in 6 months and see how wrong you are. There is no expansion in foreign markets. Not at all to the scale it could be. Sales will not increase in foreign markets. The United States is not the only country going through economic crisis. The stock market around the world is suffering right now and thousands of jobs are being lost in markets in; Asia, Europe, North/South America, and Australia. We are not the only country with a decline so the global market is not going to rescue any company at this point.
Ya and the primary driving force behind the Global recession is the fact that the US is (that percentage is falling every year and that's scary) the biggest world's economy. The fact that the US is mostly a bunch of shoppers of junk and crap we don't need. We consume so much that if our economy falls then everyone else is affected. Other country's companies then need to adjust there estimates as their most likely #1 customer the US will not be buying as much. Toyota or Hondas stock is down because we won't be buying as many cars from them so they have to figure that into their numbers. So to say the global recession will affect Apple so terrible is ill thought. Now the spending on Apple products may go down which will affect Apple's profits but with the new products in the pipeline, retail store expansion, iPhone expansion, etc. I would bet (11 years strong and I've been right just about everytime except for 9/11 which no one saw) on Apple making up for most of the "recessions" cause for less profit. True they probably won't have growth that we have gotten accustomed to but decent growth in the current economy is pretty amazing to me.
Also as someone else said it's more your Walmart shoppers that are spending less. Those are the demographic that buy the cheapest product. They don't see that spending a bit more now saves money/hassles in the long run. People will continue to buy computers as they are needed and new people will continue to recognize Apple as a better choice.
I know, doesn't it suck when someone says "you're not as well informed as you think you are" and you have to reply by listing your qualifications? And then everyone gets bitter because they think your high qualifications are elitist? What a pain it is to be educated.
"Well-educated" is not necessarily "well-informed".
Edcation gives you a degree, but information can give you a fat bank account.
The reason Appl is down will always be "the market", fundamentally. Whether or not that is a result of "the market" panicking over AIG/Housing Crisis or a result of "the market" just being scared of the technology it does not understand and clueless about the fact that Apple is one of, if not the most, well-run, profitable companies in the world (and bullet-proof to recession, as far as I can see) is irrelevant because you can simply say "its the market, Stupid."
My quest is not to give a sh-t about "the market" other than to figure out exactly why it is the market doesn't "get it" insofar as APPL is concerned.
This isn't fanboy BS, APPL on paper with all the numbers in the open and the math calculated, crushes all competition, has been doing so for 8 years, and is on track to continue doing so for at least 8 more.
She's a hack who should be driving a cab. Another thoughtful article by Andy Zak. I'm long AAPL and believe it's undervalued. I'd like to see AAPL develop a succession plan when things stabilize. I have the highest regard for SJ but have witnessed the shorts gyp the market on 4 occasions this year with orchestrated false rumors about his health.
They undoubtedly have a succession plan. They just do not publicize it. In fact, if they were
to suddenly publicize a succession plan, the stock decline that would result would dwarf
the small temporary declines you have seen following unfounded rumors.
If you study what Paul published, you'll see that his surveys had a troubling x-axis where the periods between surveys changed from 3 or 4 months to 1 month intervals. Changing intervals, randomly, particularly to shorter periods, can add noise to the signal, and give confusing results.
It seems clear to me that Carton was trying to pump up his prognostication ability, and was presenting the information in a way to support his story. Of course, that story was a somewhat negative one for Apple sales. So, if you are going to criticize analysts like Huberty, you should also take a look at Paul Carton and his Changewave surveys.
Here's a link to the report that analysts like Huberty used for their price target downgrades:
http://seekingalpha.com/article/9851...-catches-apple
In it, you'll see the weakness in the charts that I mentioned.
This is a link to a new blogpost, where Paul pats himself on the back, for calling Apple's earnings:
http://blog.changewave.com/2008/10/a...all2.html#more
Wow, I think he cherrypicked and spun a few of his predictions.
KenC
Keep thinking that.
Ivy league economics degree, founded the investing club at said University.
I've recruited at all the Ivies for a well-known investment bank, and I can confidently say, that the type of students that would type the above were from Wharton.
I've recruited at all the Ivies for a well-known investment bank, and I can confidently say, that the type of students that would type the above were from Wharton.
Interesting. I got into Wharton for b-school and Penn for law school. Philly is a cool place but I simply couldn't justify leaving sunny California especially when my wife got into the same graduate school. Couldn't be happier that I stayed.
I've recruited at all the Ivies for a well-known investment bank, and I can confidently say, that the type of students that would type the above were from Wharton.
By the way, I've been following some of your articles you publish at MacDailyNews. I think you have a really good handle on Apple would like to discuss some issues with you. E-mail me when a get a chance. Perhaps you could help me out with some writing. I'm looking for some people to do some writing for bullish cross and I think you should write on a more regular basis.
[email protected]
Best Regards,
Andy Zaky
I've recruited at all the Ivies for a well-known investment bank, and I can confidently say, that the type of students that would type the above were from Wharton.
LOL, guess your confidence is misplaced!
If you are 17, and one of your parents just lost their job...will you be going out and getting a $1800 laptop for christmas?
If you lost your job, would you be going out getting a $1400 laptop just to have it?
Apple is down because consumers are hurting. That simple.
Color me skeptical. People have been saying for the last ten months that Apple's sales were hurting, losing market share, their customers can't afford their stuff, yet, the last three quarterly reports showed gangbusters growth. Not only that, in a recession, luxury brands tend to hold their own better than regular brands. I'd worry more about everyone else.
Apple closed at 111 today.
I wouldn't say Apples under valued, just that at the start of the year it was over valued. You buy stock to make money in 2 ways, either by hoping the value goes up and you sell it or your going to hold onto it and earn dividends. For the last 5 years Apple has been delivering what rumor sites have been suggested as slow as it could to keep the popularity going (how many years did we wait for an iPhone) and along the way the value went up and up. But now all the big things that were talked about have been released and its hard to see where there going to go next. In which case it was time to sell and get the money from increase in value.
Second reason for a low value is the element of risk. Higher the risk, the lower the value. Its a world financial crisis and Apple sells to the public. End of the day, sales for them will get harder. People may just wait and not switch but its still a loss on income. Don't get me wrong Apple will make it through but its dividends may not be as high as others. Microsoft and Google on the other hand don't have much to worry about. People don't change search engine due to a recession and Microsoft makes a huge chunk of its money from licenses. Websites arn't going to stop using Windows Server because of a recession, and everyone else still needs to pay for their Windows and Office licenses to keep going. Thats why they have a low value, it doesn't matter what they report now, its what the future looks like. Remember the effects of the financial crisis have not yet hit and wont for a few more months.
Sounds like someone's worried about their stock.
I wouldn't say Apples under valued, just that at the start of the year it was over valued. You buy stock to make money in 2 ways, either by hoping the value goes up and you sell it or your going to hold onto it and earn dividends. For the last 5 years Apple has been delivering what rumor sites have been suggested as slow as it could to keep the popularity going (how many years did we wait for an iPhone) and along the way the value went up and up. But now all the big things that were talked about have been released and its hard to see where there going to go next. In which case it was time to sell and get the money from increase in value.
Second reason for a low value is the element of risk. Higher the risk, the lower the value. Its a world financial crisis and Apple sells to the public. End of the day, sales for them will get harder. People may just wait and not switch but its still a loss on income. Don't get me wrong Apple will make it through but its dividends may not be as high as others. Microsoft and Google on the other hand don't have much to worry about. People don't change search engine due to a recession and Microsoft makes a huge chunk of its money from licenses. Websites arn't going to stop using Windows Server because of a recession, and everyone else still needs to pay for their Windows and Office licenses to keep going. Thats why they have a low value, it doesn't matter what they report now, its what the future looks like. Remember the effects of the financial crisis have not yet hit and wont for a few more months.
Come on, if anyone has a future it's Apple. It may be hard for you to see the direction Apple are headed, but it's clear as day for me. SOO much room for expansion, and many new lifestyle product possibilities running cocoa touch,netbook, gaming, ATV mk II. A 2billion mobile market to tap.. I could go on all day.
Ya and the primary driving force behind the Global recession is the fact that the US is (that percentage is falling every year and that's scary) the biggest world's economy. The fact that the US is mostly a bunch of shoppers of junk and crap we don't need. We consume so much that if our economy falls then everyone else is affected. Other country's companies then need to adjust there estimates as their most likely #1 customer the US will not be buying as much. Toyota or Hondas stock is down because we won't be buying as many cars from them so they have to figure that into their numbers. So to say the global recession will affect Apple so terrible is ill thought. Now the spending on Apple products may go down which will affect Apple's profits but with the new products in the pipeline, retail store expansion, iPhone expansion, etc. I would bet (11 years strong and I've been right just about everytime except for 9/11 which no one saw) on Apple making up for most of the "recessions" cause for less profit. True they probably won't have growth that we have gotten accustomed to but decent growth in the current economy is pretty amazing to me.
Also as someone else said it's more your Walmart shoppers that are spending less. Those are the demographic that buy the cheapest product. They don't see that spending a bit more now saves money/hassles in the long run. People will continue to buy computers as they are needed and new people will continue to recognize Apple as a better choice.
I agree with what your saying. My original post was merely stating we aren't the only company with falling stocks/economy. Now what you said at the end there. The people who shop at Wal Mart also Purchase iPods.... The entire line of them. They also purchase iPhones.... They also purchase music on iTunes.... They also purchase iPhone apps... so if all the "Wal Mart" Shoppers stop spending at Wal Mart they will also stop spending on Apple.
According to that metric, Apple's valuation is higher than Microsoft, Cisco, IBM, Intel and Hewlet-Packard. Unless you are dreaming, I cannot see why Apple stock should be more expensive than stock from well established, widely held companies such as Microsoft, Cisco, IBM, Intel and Hewlet-Packard.
Given that Apple's products are limited to the consumer market (sorry, no competitively priced office computer), and overpriced by $300 to $500, I cannot see how Apple could climb out of its self imposed 5% market share.
And the current world recession suggests that Appple stock is already overvalued because Apple will not be able to maintain its historic or projected market growth in a recession market place where consumers are drawn away from overpriced, uncompetitive consumer products.
I see further declines to come for Apple's stock, given the recession market and Steve Jobs' unwillingless to lower prices.
Investors who risk their own money pay special attention to the trailing Price/Earnings multiple.
That might be true, but the investors who matter, those who invest others' money, focus on free cash flow more closely, because that's a far more accurate measure of how much money a company is going to be able to return to stockholders in the future.
When the market finally finds a decent bottom and starts to move up again (we may have already seen that point, but no one can say for sure until after the fact) Apple stock should have no trouble leading the market back up.
No matter what metric you pick, AAPL is undervalued.
But if you use the Non-GAAP P/E and growth, I think you are significantly over-valuing past events. The question is ultimately what will Apple do in the next year to continue to grow Non-GAAP earnings. (The fact that GAAP earnings will have healthy growth is fairly obvious given the smoothing effect of deferred earnings.)
I don't worry much about iPod sales; they will do well enough. Macs will likely see a small drop after the initial pent-up demand is satisfied with the laptop updates, especially given the broader economy. iTunes revenue will keep growing as they offer more compelling services. Gaming is also pretty under-valued as a growth driver for iPods and iPhones. Snow Leopard won't have quite the same upgrading uptick as Leopard or Tiger did from what I see, although it might help drive a hardware upgrade cycle.
The big risks are international sales (with stronger dollar and price updates the Mac isn't as competitive as it was before), iPhone competition (there are other offerings out there that are slowly becoming attractive; they just need to gain mind-share), and a shifting product mix in the broader market that Apple may choose not to address.
On the last item, the Netbooks come to mind-- how will Apple make a compelling product that does not canibalize other sales? Also, for iPhones, an expensive (albeit subsidized) device that is carrier locked was a great model to operate in 3-5 years ago, but as functionality of other devices improves will this still hold true?
As always this time of year, I guess we will have to wait until MWSF to see what growth drivers (other than just brand) Apple will have in the coming year.