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[ AppleEater ] Munster and company have no real evidence to support such a severely negative commentary on Apple's future earnings. He states a "universe-wide estimate cuts"....what ?? I must have missed that scientific calculation in my university micro-economics and business classes. And don't get me started on his ridiculous description of (are you ready for this) "macroeconomic headwinds". Possibly because such an economic indicator of business activity doesn't exist. But that seems to be irrelevant to him. This is just more evidence of the narrow mindedness of the investment industry regarding the real merits of Apple products, Apple users, and the technological advances that Apple's R & D have delivered up until now and have in store for 2009 and beyond. Let no one forget the following facts: iPhones, MacBooks, MacBook Pros, and iPods are still selling extremely well...Apple is sitting on a hell of a large treasure chest of cash, their stock price has not tanked to $ 5 like many other firms, they may even offer Intel-Quad-Core-iMacs in eary 2009, they may presumably release a stunning 17" MacBook Pro with possibly an Intel-Quad-Core engine, they could release a revolutionary iTablet in 2009, they may be on the verge of designing their very own advanced chips for future computing and mobile products, and they consistently show that their audience does not shop for Apple and Mac products the way others shop PCs. The only thing Munster and his blind brethren have got right is that the weakness in consumer spending could affect Apple in 2009. Bravo gentlemen - your acumen is astonishing. But what they fail to mention is that Apple's competitors could be severely weakened or swallowed up or will have closed their doors. All this while Apple keeps selling more advanced consumer and corporate products.
( They seek him here, they seek him there...that demned elusive AppleEater )
That All my chips part raises a red flag. If you are putting everything you got in during a time of insane volitility, well, some good investors could question that strategy.
Oh give me a break - yeah I have every last penny in the market. No! If my portfolio went to zero and I get fired (not too likely since my company consists of me only) I could live for well over 2 years on my other assets and liabilities.
Quote:
Originally Posted by Bageljoey
Also, you make it sound like we investors have perfect certainty--either we are sure Apple is going up or we should be selling it short. When things are so volitile--with unprecidented market conditions--it is not unreasonable to sit on the sidelines for a while or hold your long investments and wait a bit to see how things are shaking out.
I never said it was unreasonable to sit on the sidelines now. Most average people are doing just that. But the rich and those with liquidity are buying investments that will make them much richer in the future. And the poster to whom I replied didn't sound like an "unsure" he was quite bearish, in which case he should be short, as I said.
Quote:
Originally Posted by Bageljoey
Thats where I am. If you told me a year ago that AAPL would be at 90 right now (and sales were good and the iPhone was taking off), I would have assumed I would be chompin at the bit to throw more money in. As it is, in this economy I feel it is prudent to have more cash on hand just in case...
In case for what? I mean beyond the lose-your-job possibility, is it really reasonable for someone with two investing brain cells to rub together to not be buying? Sure, there is a good chance we have not seen the bottom yet, but there's also a good chance we have.
Seasoned investors know that trying to find the bottom is pointless - but if you buy good companies at valuations as historically low as we see today, you'll get rich. Those who are in fear now will continue to fight the market. The savvy investor is greedy when everyone else is afraid, and vice versa.
I saw 2 problems with Gene's analysis and he just addressed the first one.
First, the economy is going to impact Apple even if demand stays the same or even increases! Weird as that sounds it's pretty simple to explain. Apple has already guided lower in the last quarter. You can say that Apple is doing the typical low balling that they usually do but the low ball was extremely low. What that tells me is that Apple is cautious about the coming quarters. They're going to build less because they don't want to get stuck with inventory so even if demand goes up they're going to run out of stock and lose potential revenue. Poke around the old articles and you'll find a couple about lead times for iPods and iPhone increasing as stores run out. Every one of the suppliers I deal with in asia are whining that Apple cut their orders. Factories don't turn on a dime so even if Apple suddenly decided that the economy doesn't affect them (and they won't make that decision because they're very cautious) they're not going to be able to open the flood gates that fast.
Best case scenario, Apple sells out for the holidays and people are stuck giving out Zune's for xmas (or maybe a pair of socks would be better). Apple then starts increasing supply still weary that the worst part of the economy still hasn't hit. They're not going to be aggressive after xmas and entering a new year when people are getting laid off left and right.
Second, Gene uses the deferred revenue model for the iPhone when every other major analyst uses the standard model. Gene's numbers may be right. His bottom line might match Apple's but even so the analysts will break down the bottom line and say.. "X amount came from the deferred revenue. We already accounted for that in previous quarters... subtract X from the bottom line... do my magic... here is what the stock is worth". That number won't be $230 even if the bottom line matches Gene's.
The problem is that the stock is trading on the standard model and Gene is projecting on the deferred model. Apple will have huge numbers in the coming quarters because of deferred revenue but the street is going to discount that because they look forward.
The street cares about:
1) what Apple sold last quarter only because they want a guide to...
2) what Apple will sell next quarter
3) what the margins are
4) what the inventory is
5) what the market share trend is
The street doesn't care what Apple sold before even if it adds to the bottom line of upcoming quarters. They already know the iPhone kicked ass in the last 2 quarters... it's not a secret... everyone knows. The analysts are scared about what's going to happen moving forward. The deferred revenue might prop up Apple bottom line for the next 2 years but if iPhone sales fall off the cliff next year then what happens to Apple's bottom line in 3-4 years? Standard evaluations of stock price like P/E ratios don't apply so you can't simply say Apple is at a 20 P/E so it's expensive/cheap relative to the other tech stocks. Apple's P/E has been artificially low the last year or so because of deferred revenue and it'll be artificially high for the next couple of years. People aren't going to go... "wow... look at that bottom line earnings.. that means Apple's P/E is 10 while HP is 15 (or whatever the numbers are)". They're going to break it down further.
What if Jobs retires and the stock is down 70%? What if a bomb is places at headquarters and the stock goes down 90%?
Clearly you don't understand the idea behind investing - you buy good companies when you think they will go up. You understand the "what ifs" are always possible, and you factor them into your decision making. Clearly, someone who owns the stock right now thinks the odds of being down 30% in a month are slim. Frankly, if I'm down 30% in a month, only as a result of broad economic issues, and not Apple specific issues, I'll be buying more. Will that frustrate you? It sounds from your post like you would be unhappy if I am optimistic about the market. I assume you have your money on the downside, because that's clearly what you believe will happen, right? Or are you too afraid to put your money where your mouth is?
You seem so upset, it was only a suggestion of my opinion.
I still believe more stocks like Apple will go lower before we hit the bottom. I am simply on the side line waiting for the dust to clear. I took out my Apple stocks at $170 securing my profits for the year. If I stayed optimistic like you, the result would have been devastating.
Just today it fell from 96 to 89 in one session. That's 10% difference from 89 to 96 in one day. Think Again
I still think you could buy apple for a lot less. Just Watch. Don't forget the Hedge funds redemptions have more to unload. They love Apple stocks and they won't have a choice but to unload it.
What if Jobs retires and the stock is down 70%? What if a bomb is places at headquarters and the stock goes down 90%?
Clearly you don't understand the idea behind investing - you buy good companies when you think they will go up. You understand the "what ifs" are always possible, and you factor them into your decision making. Clearly, someone who owns the stock right now thinks the odds of being down 30% in a month are slim. Frankly, if I'm down 30% in a month, only as a result of broad economic issues, and not Apple specific issues, I'll be buying more. Will that frustrate you? It sounds from your post like you would be unhappy if I am optimistic about the market. I assume you have your money on the downside, because that's clearly what you believe will happen, right? Or are you too afraid to put your money where your mouth is?
Some good observations there, worth paying attention to.....
Oh give me a break - yeah I have every last penny in the market. No! If my portfolio went to zero and I get fired (not too likely since my company consists of me only) I could live for well over 2 years on my other assets and liabilities.
Hey, I'm not the one who said "all my chips." If you are secure and liquid and have other "chips" then I agree, now is a great time to be investing.
Although, I have to admit, I am not sure how to live on liabilities...
Quote:
In case for what? I mean beyond the lose-your-job possibility, is it really reasonable for someone with two investing brain cells to rub together to not be buying? Sure, there is a good chance we have not seen the bottom yet, but there's also a good chance we have.
I find it hard to believe that in this economy where jobs of all kinds are being lost in stunning numbers, that you can discount the "lose-your-job" possibility as a trivial concern--or a concern only for a few. Sure, you may be secure, but it is sort of narrow minded to project that onto everyone else. And it is not just job loss--many people are experienceing or are about to experience salary decreases which can be disasterous for people with mortgages and families...
Again, I agree with you that those with plenty of money are in a good position to make a bundle in the next couple of years if they can buy now and buy more later if things goes down again.
One factor that I suspect has been weighing heavily on AAPL these past few months is the competitive threat from in-the-offing touch-screen smartphones from RIM, Google, etc. Many Wall-Streeters love their Blackberries and consider RIM a more professional and solid company than Apple. And they see Google as an 800-pound gorilla. So they probably figured that iPhone sales would be severely squeezed when those new devices arrived. And the report of a cut in parts-orders by Apple must have reinforced that way of looking at things.
So far, it looks as though the competitive touchscreen smartphones are not setting the world on fire and Apple's iPhone sales are holding up. In a month or two analysts will have a better feel for the situation. If it looks as though competitors haven't made much of a dent in iPhone sales, Apple-boosters like Munster will draw an analogy between them and the many unsuccessful competitors to the iPod. That ought to make an impression on many hedge-fund shorts, If they close out their large positions, the stock could/should rise 25%, even without a massive influx of aggressive buying.
An exciting product announcement or two at MacWorld Jan. 5 is a possible positive black swan. Ditto a positive earnings report three weeks later. So I think a rise from 95 to 125 in two months is likely (all other things being equal).
Further, if Apple lengthens its lead with a dazzling new iPhone model, that could provide another 25% boost (late next year).
Comments
[ AppleEater ] Munster and company have no real evidence to support such a severely negative commentary on Apple's future earnings. He states a "universe-wide estimate cuts"....what ?? I must have missed that scientific calculation in my university micro-economics and business classes. And don't get me started on his ridiculous description of (are you ready for this) "macroeconomic headwinds". Possibly because such an economic indicator of business activity doesn't exist. But that seems to be irrelevant to him. This is just more evidence of the narrow mindedness of the investment industry regarding the real merits of Apple products, Apple users, and the technological advances that Apple's R & D have delivered up until now and have in store for 2009 and beyond. Let no one forget the following facts: iPhones, MacBooks, MacBook Pros, and iPods are still selling extremely well...Apple is sitting on a hell of a large treasure chest of cash, their stock price has not tanked to $ 5 like many other firms, they may even offer Intel-Quad-Core-iMacs in eary 2009, they may presumably release a stunning 17" MacBook Pro with possibly an Intel-Quad-Core engine, they could release a revolutionary iTablet in 2009, they may be on the verge of designing their very own advanced chips for future computing and mobile products, and they consistently show that their audience does not shop for Apple and Mac products the way others shop PCs. The only thing Munster and his blind brethren have got right is that the weakness in consumer spending could affect Apple in 2009. Bravo gentlemen - your acumen is astonishing. But what they fail to mention is that Apple's competitors could be severely weakened or swallowed up or will have closed their doors. All this while Apple keeps selling more advanced consumer and corporate products.
( They seek him here, they seek him there...that demned elusive AppleEater )
That All my chips part raises a red flag. If you are putting everything you got in during a time of insane volitility, well, some good investors could question that strategy.
Oh give me a break - yeah I have every last penny in the market. No! If my portfolio went to zero and I get fired (not too likely since my company consists of me only) I could live for well over 2 years on my other assets and liabilities.
Also, you make it sound like we investors have perfect certainty--either we are sure Apple is going up or we should be selling it short. When things are so volitile--with unprecidented market conditions--it is not unreasonable to sit on the sidelines for a while or hold your long investments and wait a bit to see how things are shaking out.
I never said it was unreasonable to sit on the sidelines now. Most average people are doing just that. But the rich and those with liquidity are buying investments that will make them much richer in the future. And the poster to whom I replied didn't sound like an "unsure" he was quite bearish, in which case he should be short, as I said.
Thats where I am. If you told me a year ago that AAPL would be at 90 right now (and sales were good and the iPhone was taking off), I would have assumed I would be chompin at the bit to throw more money in. As it is, in this economy I feel it is prudent to have more cash on hand just in case...
In case for what? I mean beyond the lose-your-job possibility, is it really reasonable for someone with two investing brain cells to rub together to not be buying? Sure, there is a good chance we have not seen the bottom yet, but there's also a good chance we have.
Seasoned investors know that trying to find the bottom is pointless - but if you buy good companies at valuations as historically low as we see today, you'll get rich. Those who are in fear now will continue to fight the market. The savvy investor is greedy when everyone else is afraid, and vice versa.
First, the economy is going to impact Apple even if demand stays the same or even increases! Weird as that sounds it's pretty simple to explain. Apple has already guided lower in the last quarter. You can say that Apple is doing the typical low balling that they usually do but the low ball was extremely low. What that tells me is that Apple is cautious about the coming quarters. They're going to build less because they don't want to get stuck with inventory so even if demand goes up they're going to run out of stock and lose potential revenue. Poke around the old articles and you'll find a couple about lead times for iPods and iPhone increasing as stores run out. Every one of the suppliers I deal with in asia are whining that Apple cut their orders. Factories don't turn on a dime so even if Apple suddenly decided that the economy doesn't affect them (and they won't make that decision because they're very cautious) they're not going to be able to open the flood gates that fast.
Best case scenario, Apple sells out for the holidays and people are stuck giving out Zune's for xmas (or maybe a pair of socks would be better). Apple then starts increasing supply still weary that the worst part of the economy still hasn't hit. They're not going to be aggressive after xmas and entering a new year when people are getting laid off left and right.
Second, Gene uses the deferred revenue model for the iPhone when every other major analyst uses the standard model. Gene's numbers may be right. His bottom line might match Apple's but even so the analysts will break down the bottom line and say.. "X amount came from the deferred revenue. We already accounted for that in previous quarters... subtract X from the bottom line... do my magic... here is what the stock is worth". That number won't be $230 even if the bottom line matches Gene's.
The problem is that the stock is trading on the standard model and Gene is projecting on the deferred model. Apple will have huge numbers in the coming quarters because of deferred revenue but the street is going to discount that because they look forward.
The street cares about:
1) what Apple sold last quarter only because they want a guide to...
2) what Apple will sell next quarter
3) what the margins are
4) what the inventory is
5) what the market share trend is
The street doesn't care what Apple sold before even if it adds to the bottom line of upcoming quarters. They already know the iPhone kicked ass in the last 2 quarters... it's not a secret... everyone knows. The analysts are scared about what's going to happen moving forward. The deferred revenue might prop up Apple bottom line for the next 2 years but if iPhone sales fall off the cliff next year then what happens to Apple's bottom line in 3-4 years? Standard evaluations of stock price like P/E ratios don't apply so you can't simply say Apple is at a 20 P/E so it's expensive/cheap relative to the other tech stocks. Apple's P/E has been artificially low the last year or so because of deferred revenue and it'll be artificially high for the next couple of years. People aren't going to go... "wow... look at that bottom line earnings.. that means Apple's P/E is 10 while HP is 15 (or whatever the numbers are)". They're going to break it down further.
My 2 cents... personally I'm buying..
What if Jobs retires and the stock is down 70%? What if a bomb is places at headquarters and the stock goes down 90%?
Clearly you don't understand the idea behind investing - you buy good companies when you think they will go up. You understand the "what ifs" are always possible, and you factor them into your decision making. Clearly, someone who owns the stock right now thinks the odds of being down 30% in a month are slim. Frankly, if I'm down 30% in a month, only as a result of broad economic issues, and not Apple specific issues, I'll be buying more. Will that frustrate you? It sounds from your post like you would be unhappy if I am optimistic about the market. I assume you have your money on the downside, because that's clearly what you believe will happen, right? Or are you too afraid to put your money where your mouth is?
You seem so upset, it was only a suggestion of my opinion.
I still believe more stocks like Apple will go lower before we hit the bottom. I am simply on the side line waiting for the dust to clear. I took out my Apple stocks at $170 securing my profits for the year. If I stayed optimistic like you, the result would have been devastating.
Just today it fell from 96 to 89 in one session. That's 10% difference from 89 to 96 in one day. Think Again
I still think you could buy apple for a lot less. Just Watch. Don't forget the Hedge funds redemptions have more to unload. They love Apple stocks and they won't have a choice but to unload it.
What if Jobs retires and the stock is down 70%? What if a bomb is places at headquarters and the stock goes down 90%?
Clearly you don't understand the idea behind investing - you buy good companies when you think they will go up. You understand the "what ifs" are always possible, and you factor them into your decision making. Clearly, someone who owns the stock right now thinks the odds of being down 30% in a month are slim. Frankly, if I'm down 30% in a month, only as a result of broad economic issues, and not Apple specific issues, I'll be buying more. Will that frustrate you? It sounds from your post like you would be unhappy if I am optimistic about the market. I assume you have your money on the downside, because that's clearly what you believe will happen, right? Or are you too afraid to put your money where your mouth is?
Some good observations there, worth paying attention to.....
http://www.chicagotribune.com/news/n...,2185981.story
Savour this: "Universe-wide"!! I though that they would sacle up to "sola-system-wide" or even "galaxy-wide", but "universe-wide"!
Oh give me a break - yeah I have every last penny in the market. No! If my portfolio went to zero and I get fired (not too likely since my company consists of me only) I could live for well over 2 years on my other assets and liabilities.
Hey, I'm not the one who said "all my chips." If you are secure and liquid and have other "chips" then I agree, now is a great time to be investing.
Although, I have to admit, I am not sure how to live on liabilities...
In case for what? I mean beyond the lose-your-job possibility, is it really reasonable for someone with two investing brain cells to rub together to not be buying? Sure, there is a good chance we have not seen the bottom yet, but there's also a good chance we have.
I find it hard to believe that in this economy where jobs of all kinds are being lost in stunning numbers, that you can discount the "lose-your-job" possibility as a trivial concern--or a concern only for a few. Sure, you may be secure, but it is sort of narrow minded to project that onto everyone else. And it is not just job loss--many people are experienceing or are about to experience salary decreases which can be disasterous for people with mortgages and families...
Again, I agree with you that those with plenty of money are in a good position to make a bundle in the next couple of years if they can buy now and buy more later if things goes down again.
So far, it looks as though the competitive touchscreen smartphones are not setting the world on fire and Apple's iPhone sales are holding up. In a month or two analysts will have a better feel for the situation. If it looks as though competitors haven't made much of a dent in iPhone sales, Apple-boosters like Munster will draw an analogy between them and the many unsuccessful competitors to the iPod. That ought to make an impression on many hedge-fund shorts, If they close out their large positions, the stock could/should rise 25%, even without a massive influx of aggressive buying.
An exciting product announcement or two at MacWorld Jan. 5 is a possible positive black swan. Ditto a positive earnings report three weeks later. So I think a rise from 95 to 125 in two months is likely (all other things being equal).
Further, if Apple lengthens its lead with a dazzling new iPhone model, that could provide another 25% boost (late next year).