There are additional considerations as well. jragosta's reference to "the market as a whole" and implications regarding growth rates, earnings, share price, etc. is off-base.
Virtually everything you posted is off base, but I'll simply focus on this line that shows that you don't know what you're talking about.
The market as a whole is the sum of all the billions of shares of stock that are traded every day. Investors can choose to buy or sell GM or GE or APPL or MSFT or CAT or IP or any of others of millions of stocks. They choose to invest in those stocks on the basis of whatever criteria they choose, but on average, the market sets a price of something like 17-18 times earnings. That is the average of what all of the millions of investors buying and selling billions of shares of stock every day are paying. So, in essence, that is what the market as a whole has determined is a fair value for an average company.
Clearly, there are some companies that are above average - and they get more than the average. There are also some that get less. That's why the AVERAGE describes the market as a whole.
So I guess it's simply the concept of an average that you don't understand.
Have you tried trading using a P/E ratio as a metric/indicator? It doesn't work, at all. Nobody said it was supposed to (aside from the uninformed), and in real life it is a terrible indicator of a stock's value.
So I guess it's simply the concept of an average that you don't understand.
Careful now... you are replying to an "expert".
Meanwhile... almost simultaneously Loeb remains bullish while Gundlach shorts AAPL. Hmmm... but but but I thought fundamental analysis by all parties would have them come to the same conclusion... ;-)
iOS fatigue? Huh? Your objections to iOS are just fantasy imho.
Look, I had been bullish on Apple since 2005. I was the first to put $300 price target on AAPL when it was trading at $35, so do not take me as an AAPL basher. I own nearly every product Apple has produced since 2005. I love the company and use its products daily.
But iOS Fatigue is no joke. Especially on iPhone. The times when “small” was cool is over! Ultimately, the best design is driven not by trends and fashion but by functionality that is congruent with they way we are hard-wired. To put it simply, the best design is the one that take the least effort to use. People don’t use cell phones just for talk anymore - so small screens take more effort to use. Small screens are out. Big screens are in. Apple plays catch up already.
Next is productivity. iOS is anti-productivity OS. Anytime you want to start a program, you are faced with the multitude of colorful icon-temptations - visual distractions to your focus. The time will come when iOS 5 on 3.5” screen with Angry Birds #1 app will look silly. I am not saying that Android is better. Just that iOS is vulnerable.
One more thing ... syncing. Apple has always been terrible at syncing. iDisk, MobileMe, iCloud, FaceTime, iMessage - they all are far cry from the dropbox perfection. The current syncing reliability offered by Apple simply does not cut it anymore.
Apple still can get it all right this year. But will it?
Look, I had been bullish on Apple since 2005. I was the first to put $300 price target on AAPL when it was trading at $35, so do not take me as an AAPL basher. I own nearly every product Apple has produced since 2005. I love the company and use its products daily.
But iOS Fatigue is no joke. Especially on iPhone. The times when “small” was cool is over! Ultimately, the best design is driven not by trends and fashion but by functionality that is congruent with they way we are hard-wired. To put it simply, the best design is the one that take the least effort to use. People don’t use cell phones just for talk anymore - so small screens take more effort to use. Small screens are out. Big screens are in. Apple plays catch up already.
Next is productivity. iOS is anti-productivity OS. Anytime you want to start a program, you are faced with the multitude of colorful icon-temptations - visual distractions to your focus. The time will come when iOS 5 on 3.5” screen with Angry Birds #1 app will look silly. I am not saying that Android is better. Just that iOS is vulnerable.
One more thing ... syncing. Apple has always been terrible at syncing. iDisk, MobileMe, iCloud, FaceTime, iMessage - they all are far cry from the dropbox perfection. The current syncing reliability offered by Apple simply does not cut it anymore.
Apple still can get it all right this year. But will it?
First off... let's get the system and the phone design separated.
The system is iOS and everything it entails.
The phone design is the shape, weight, screen, battery etc.
I said that your idea of iOS fatigue is fantasy imho... and I still believe that. Just because it bothers you doesn't make it a actual problem with the OS. That much is obvious by the number of phones that are sold by Apple. Saying that iOS is getting dated is just foolish... imho. Commenting as if Apple isn't constantly updating the OS is just as foolish.
Where I have a problem is with the update frequency of the design. As mentioned, this has not been a problem so far. Going forward I'm not so sure.
Having said that, I also believe that "if" Apple goes to a 4" screen then they will not have to update the phone's design for a long period of time. I've been saying it for a long time now. How far can you go with phone size. Samsung played that card a while ago and I believe they will now be hamstrung in the design department after the Galaxy 3. Samsung will have more of a problem going forward than Apple, imho, because they are reliant upon Google for improvements to the OS... which, besides processor and screen, is one of the only available avenues for real improvement. Apple has its own OS and can improve it at will to better co-exist with its hardware design. Apple is all about pleasing 80% of the people 80% of the time. Ease of use, simplicity if you must. Because of this I believe that Apple will not have any problem staying competitive.
I expect that we'll see Apple increase the pace to more like 3 quarters per phone for that very reason. Apple isn't dumb, they don't want to open the window for competitors, so if it doesn't happen this year (I definitely think there's a chance of an early Autumn launch) then it should happen next year.
I hope not. There's a fine balance between releasing updates frequently enough that people upgrade and keep your revenue stream going, and updating too quickly so that people put off upgrading because they know a new one is just around the corner, or that if they do upgrade a new one will be out soon so why bother?
That said, Apple has to maintain some feature parity with their competition. If Samsung comes out with a GPU 5x faster than what Apple has (and has any software to take advantage of it), then Apple has to respond or lose customers chasing the new thing.
I think Apple has the brains and money to keep their products at the edge of the feature/power curve and not get overwhelmed by the competition. Especially since some of the competition (Samsung) is also a supplier to Apple.
Have you tried trading using a P/E ratio as a metric/indicator? It doesn't work, at all. Nobody said it was supposed to (aside from the uninformed), and in real life it is a terrible indicator of a stock's value.
Wrong. In real life, it's the best indicator of a stock's value - as determined by millions of potential investors.
What is the value of a product? It's what someone will pay for it. And what better determinant is there of that than looking at what someone actually DOES pay for it - i.e., the share price.
It is true that analysts are generally not very good at determining future values, but for present value, there's no better estimate.
Virtually everything you posted is off base, but I'll simply focus on this line that shows that you don't know what you're talking about.
The market as a whole is the sum of all the billions of shares of stock that are traded every day. Investors can choose to buy or sell GM or GE or APPL or MSFT or CAT or IP or any of others of millions of stocks. They choose to invest in those stocks on the basis of whatever criteria they choose, but on average, the market sets a price of something like 17-18 times earnings. That is the average of what all of the millions of investors buying and selling billions of shares of stock every day are paying. So, in essence, that is what the market as a whole has determined is a fair value for an average company.
Clearly, there are some companies that are above average - and they get more than the average. There are also some that get less. That's why the AVERAGE describes the market as a whole.
So I guess it's simply the concept of an average that you don't understand.
LOL, I guess I expected that you'd be the first to respond simply given that your quote was at the top of my post (though I did disclaim that the bulk of my post wasn't directed entirely or even in part at you). But surely you could have done better than this drivel. Abraham Lincoln is shaking his head right now.
If you look at a phone book, some companies are listed before the letter M, some companies start with the letter M, and some companies fall after.
Therefore, because Apple starts with the letter A it must be better than the average company. Obviously the phone book is inclusive of all companies. Or do we arrange the companies by their phone numbers?
And before somebody points out the obvious, the letters M and N are the median, and not the average. In fact, the average first letter of company names is going to be much closer to A.
There is no "market as a whole" -- this is a fundamental flaw in your "understanding" of the topic. Sure, there is a Wilshire 10,000 but what relevance does it have other than an indication that an overall rise in market prices correlates to an overall improvement in the US economy? However, given that you also think that there are millions of other publicly traded stocks, I'm beginning to see a pattern emerge.
The market does not "set a price" -- the so-called market prices that you seem to be thinking of are, in fact, the marginal bids and asks for a specific quantity of shares of a particular equity in a particular market at a particular point in time. Those marginal bids and asks, nearly by definition of being marginal, are reflective of the price at which an individual buyer or seller is willing to transact, whether it be long or short.
You might be referring to the closing price as "the price" -- but when the closing bell is rung at the NYSE, the price where the last trade was settled is not "the price." When it's midnight in the International Date Line, the most recent price for a trade in the after-hours markets is not "the price."
The traditional market-makers in a specific equity didn't/don't "set the price."
To say that "the market sets the price" is as foolish as saying the US Federal Reserve sets the Fed Funds Rate. They don't. They do set the Discount Rate and are able to do so because they are a counterparty in transactions with banks that get priced at the Discount Rate. However, the Fed only sets a target for the Fed Funds rate and the actual Fed Funds rate is a function of the trading done by the banks and other participants in the money markets.
I think that these are similar, common mis-conceptions about prices being set.
If "the market sets the price," then it might seem counter-intuitive that a single market participant could move a market through a single large transaction or trading strategy.
And with comparisons against some irrelevant "average" company as your primary analytical tool, are you thinking about the very basic concept of beta and the Capital Asset Pricing Model (CAPM)? Beta, of course, shouldn't be confused with the other Greeeks, like delta, gamma, vega, and theta, as you well know.
In fact, whenever I have sat down in a conference room with the market risk quants in a conference room just off the massive trading floor of one of the big Wall Street banks or the trading floor of an oil & gas super-major, I have never heard any mention of them incorporating CAPM into their Monte Carlo models. Maybe if JPMC's prop trading had been based on a simple beta strategy, they could have avoided that $2.3B mark-to-market loss (which may or may not ever materialize into an actual cash loss of any size).
And please explain whether you're talking about an arithmetic mean or a geometric mean. Was it a log-average? Also, what sort of distribution are you talking about? Are the data stochastic or deterministic? Also, if the time horizon has any relevance, please let me know. It would be helpful if you could be more precise so that I could have a better idea of exactly what it is that I don't understand.
Wrong. In real life, it's the best indicator of a stock's value - as determined by millions of potential investors.
What is the value of a product? It's what someone will pay for it. And what better determinant is there of that than looking at what someone actually DOES pay for it - i.e., the share price.
It is true that analysts are generally not very good at determining future values, but for present value, there's no better estimate.
I finally get it!! You don't understand the nuances of the differences between value and price. Again, off to wikipedia, it's a great Clifs Notes alternative to an education in finance and economics: Value (economics) - The various explanations
A relevant extract:
Value in the most basic sense can be referred to as "Real Value" or "Actual Value." This is the measure of worth that is based purely on the utility derived from the consumption of a product or service. Utility derived value allows products or services to be measured on outcome instead of demand or supply theories that have the inherent ability to be manipulated. Illustration: The real value of a book sold to a student who pays $50.00 at the cash register for the text and who earns no additional income from reading the book is essentially zero. However; the real value of the same text purchased in a thrift shop at a price of $0.25 and provides the reader with an insight that allows him or her to earn $100,000.00 in additional income is $100,000.00 or the extended lifetime value earned by the consumer. This is value calculated by actual measurements of ROI instead of production input and or demand vs. supply. No single unit has a fixed value. Value is intrinsically related to the worth derived by the consumer. [Burke(2005)].
You may also want to revisit the definitions of future value and present value...
Meanwhile... almost simultaneously Loeb remains bullish while Gundlach shorts AAPL. Hmmm... but but but I thought fundamental analysis by all parties would have them come to the same conclusion... ;-)
Of course your mistake is in not recognizing that if all fundamental analysis were identical, then it wouldn't necessarily be performed by so many different parties.
A key word that I used in my description of the cash flow models that analysts use is proprietary. Analysts of all types try to develop a competitive advantage by acquiring unique information (the potency of that sort of competitive advantage is why insider trading is illegal, so analysts look to as many unique and legal information sources that they can), developing the best ability to interpret the information in a way that is relevant and predictive, and considering the relevance of other factors and the degree and correlation of their potential impacts.
That's why different equity analysts set different price targets, different rating agencies might assign different debt ratings, two companies competing to acquire a third will make different offers, etc.
Bought a few more shares on Wednesday at $541, a day before this rec.
The P/E is silly low. $13 or so now, $10.25 if you adjust for the $110 billion in the bank. Forward P/E of $11.30 is under $9 if you adjust for the $110 billion.
cameronj said it well. Zaky's analysis is based on little than more than the comparison of historic P/E ratios for AAPL. Such analysis can turn wrong if acceleration of earnings can't be sustained.
There are fundamental forces at the market that go beyond P/E ratios.
I see iOS fatigue on the horizon. Multiple icons drain your focus. Plus perennially unreliable syncing. Add to that a tiny 3.5” screen and no wonder Angry Birds, which requires rudimentary finger gestures, is the king.
The time is ripe for a mobile device with a bigger screen, a UI that steers your focus toward creating and editing meaningful content rather that distracting you with colorful entertainment icons.
Unless Apple ups its game soon, I see trouble. Competitors, while being at a disadvantage due to non-integrated software and hardware, are not sleeping.
Multiple icons drain my focus? Right. Thanks for your investing advice.
I finally get it!! You don't understand the nuances of the differences between value and price. Again, off to wikipedia, it's a great Clifs Notes alternative to an education in finance and economics: Value (economics) - The various explanations
A relevant extract:
Value in the most basic sense can be referred to as "Real Value" or "Actual Value." This is the measure of worth that is based purely on the utility derived from the consumption of a product or service. Utility derived value allows products or services to be measured on outcome instead of demand or supply theories that have the inherent ability to be manipulated. Illustration: The real value of a book sold to a student who pays $50.00 at the cash register for the text and who earns no additional income from reading the book is essentially zero. However; the real value of the same text purchased in a thrift shop at a price of $0.25 and provides the reader with an insight that allows him or her to earn $100,000.00 in additional income is $100,000.00 or the extended lifetime value earned by the consumer. This is value calculated by actual measurements of ROI instead of production input and or demand vs. supply. No single unit has a fixed value. Value is intrinsically related to the worth derived by the consumer. [Burke(2005)].
You may also want to revisit the definitions of future value and present value...
You might want to revisit the concept of 'value is what someone will pay for something'. That's certainly true when it comes to stock prices.
Let's say Widget Co is trading at $100 per share. If the value is really greater than $100 per share, people will buy it at $100, driving the price up. If the value is lower, they will sell, driving the price down. The entire principle of the stock market is that the value is determined by the collective evaluation of millions of potential investors who have to choose between many thousands of stocks.
"Future value" is a misnomer. No one knows the future value of anything. One can only guess what the value will be on a certain day.
Or, specifically: http://www.ehow.com/facts_7154148_stock-market-value-definition.html
"Stock market value is the price at which a stock can be bought or sold at a stock exchange. It reflects the market's expectation regarding the value of a stock. Combined market values of leading individual stocks are used to produce the market index, which tells investors the overall market value."
Of course your mistake is in not recognizing that if all fundamental analysis were identical, then it wouldn't necessarily be performed by so many different parties.
A key word that I used in my description of the cash flow models that analysts use is proprietary. Analysts of all types try to develop a competitive advantage by acquiring unique information (the potency of that sort of competitive advantage is why insider trading is illegal, so analysts look to as many unique and legal information sources that they can), developing the best ability to interpret the information in a way that is relevant and predictive, and considering the relevance of other factors and the degree and correlation of their potential impacts.
That's why different equity analysts set different price targets, different rating agencies might assign different debt ratings, two companies competing to acquire a third will make different offers, etc.
Hmmm... all that fundamental analysis and it sounds to me like it all comes down to guessing.
"Oh crap, those stocks you had me buy three months ago have lost a lot of value. Hey, call up that buddy of yours and have him write an article telling everyone to buy."
Just make sure you guys have some liquid. At this point, if you can let the sleazy shorts get it to low $5's, it'll prove very lucrative for you in the long (near term) run.
Comments
Virtually everything you posted is off base, but I'll simply focus on this line that shows that you don't know what you're talking about.
The market as a whole is the sum of all the billions of shares of stock that are traded every day. Investors can choose to buy or sell GM or GE or APPL or MSFT or CAT or IP or any of others of millions of stocks. They choose to invest in those stocks on the basis of whatever criteria they choose, but on average, the market sets a price of something like 17-18 times earnings. That is the average of what all of the millions of investors buying and selling billions of shares of stock every day are paying. So, in essence, that is what the market as a whole has determined is a fair value for an average company.
Clearly, there are some companies that are above average - and they get more than the average. There are also some that get less. That's why the AVERAGE describes the market as a whole.
So I guess it's simply the concept of an average that you don't understand.
Have you tried trading using a P/E ratio as a metric/indicator? It doesn't work, at all. Nobody said it was supposed to (aside from the uninformed), and in real life it is a terrible indicator of a stock's value.
Quote:
Originally Posted by jragosta
So I guess it's simply the concept of an average that you don't understand.
Careful now... you are replying to an "expert".
Meanwhile... almost simultaneously Loeb remains bullish while Gundlach shorts AAPL. Hmmm... but but but I thought fundamental analysis by all parties would have them come to the same conclusion... ;-)
Quote:
Originally Posted by island hermit
iOS fatigue? Huh? Your objections to iOS are just fantasy imho.
Look, I had been bullish on Apple since 2005. I was the first to put $300 price target on AAPL when it was trading at $35, so do not take me as an AAPL basher. I own nearly every product Apple has produced since 2005. I love the company and use its products daily.
But iOS Fatigue is no joke. Especially on iPhone. The times when “small” was cool is over! Ultimately, the best design is driven not by trends and fashion but by functionality that is congruent with they way we are hard-wired. To put it simply, the best design is the one that take the least effort to use. People don’t use cell phones just for talk anymore - so small screens take more effort to use. Small screens are out. Big screens are in. Apple plays catch up already.
Next is productivity. iOS is anti-productivity OS. Anytime you want to start a program, you are faced with the multitude of colorful icon-temptations - visual distractions to your focus. The time will come when iOS 5 on 3.5” screen with Angry Birds #1 app will look silly. I am not saying that Android is better. Just that iOS is vulnerable.
One more thing ... syncing. Apple has always been terrible at syncing. iDisk, MobileMe, iCloud, FaceTime, iMessage - they all are far cry from the dropbox perfection. The current syncing reliability offered by Apple simply does not cut it anymore.
Apple still can get it all right this year. But will it?
Quote:
Originally Posted by enature
Look, I had been bullish on Apple since 2005. I was the first to put $300 price target on AAPL when it was trading at $35, so do not take me as an AAPL basher. I own nearly every product Apple has produced since 2005. I love the company and use its products daily.
But iOS Fatigue is no joke. Especially on iPhone. The times when “small” was cool is over! Ultimately, the best design is driven not by trends and fashion but by functionality that is congruent with they way we are hard-wired. To put it simply, the best design is the one that take the least effort to use. People don’t use cell phones just for talk anymore - so small screens take more effort to use. Small screens are out. Big screens are in. Apple plays catch up already.
Next is productivity. iOS is anti-productivity OS. Anytime you want to start a program, you are faced with the multitude of colorful icon-temptations - visual distractions to your focus. The time will come when iOS 5 on 3.5” screen with Angry Birds #1 app will look silly. I am not saying that Android is better. Just that iOS is vulnerable.
One more thing ... syncing. Apple has always been terrible at syncing. iDisk, MobileMe, iCloud, FaceTime, iMessage - they all are far cry from the dropbox perfection. The current syncing reliability offered by Apple simply does not cut it anymore.
Apple still can get it all right this year. But will it?
First off... let's get the system and the phone design separated.
The system is iOS and everything it entails.
The phone design is the shape, weight, screen, battery etc.
I said that your idea of iOS fatigue is fantasy imho... and I still believe that. Just because it bothers you doesn't make it a actual problem with the OS. That much is obvious by the number of phones that are sold by Apple. Saying that iOS is getting dated is just foolish... imho. Commenting as if Apple isn't constantly updating the OS is just as foolish.
Where I have a problem is with the update frequency of the design. As mentioned, this has not been a problem so far. Going forward I'm not so sure.
Having said that, I also believe that "if" Apple goes to a 4" screen then they will not have to update the phone's design for a long period of time. I've been saying it for a long time now. How far can you go with phone size. Samsung played that card a while ago and I believe they will now be hamstrung in the design department after the Galaxy 3. Samsung will have more of a problem going forward than Apple, imho, because they are reliant upon Google for improvements to the OS... which, besides processor and screen, is one of the only available avenues for real improvement. Apple has its own OS and can improve it at will to better co-exist with its hardware design. Apple is all about pleasing 80% of the people 80% of the time. Ease of use, simplicity if you must. Because of this I believe that Apple will not have any problem staying competitive.
.
Quote:
Originally Posted by malax
Me too. Unfortunately I also bought some when it was at $585 a few weeks ago. Oh well, I'm still up 500% or so overall.
options baby, options
Quote:
Originally Posted by cameronj
I expect that we'll see Apple increase the pace to more like 3 quarters per phone for that very reason. Apple isn't dumb, they don't want to open the window for competitors, so if it doesn't happen this year (I definitely think there's a chance of an early Autumn launch) then it should happen next year.
I hope not. There's a fine balance between releasing updates frequently enough that people upgrade and keep your revenue stream going, and updating too quickly so that people put off upgrading because they know a new one is just around the corner, or that if they do upgrade a new one will be out soon so why bother?
That said, Apple has to maintain some feature parity with their competition. If Samsung comes out with a GPU 5x faster than what Apple has (and has any software to take advantage of it), then Apple has to respond or lose customers chasing the new thing.
I think Apple has the brains and money to keep their products at the edge of the feature/power curve and not get overwhelmed by the competition. Especially since some of the competition (Samsung) is also a supplier to Apple.
- Jasen.
Wrong. In real life, it's the best indicator of a stock's value - as determined by millions of potential investors.
What is the value of a product? It's what someone will pay for it. And what better determinant is there of that than looking at what someone actually DOES pay for it - i.e., the share price.
It is true that analysts are generally not very good at determining future values, but for present value, there's no better estimate.
LOL, I guess I expected that you'd be the first to respond simply given that your quote was at the top of my post (though I did disclaim that the bulk of my post wasn't directed entirely or even in part at you). But surely you could have done better than this drivel. Abraham Lincoln is shaking his head right now.
If you look at a phone book, some companies are listed before the letter M, some companies start with the letter M, and some companies fall after.
Therefore, because Apple starts with the letter A it must be better than the average company. Obviously the phone book is inclusive of all companies. Or do we arrange the companies by their phone numbers?
And before somebody points out the obvious, the letters M and N are the median, and not the average. In fact, the average first letter of company names is going to be much closer to A.
There is no "market as a whole" -- this is a fundamental flaw in your "understanding" of the topic. Sure, there is a Wilshire 10,000 but what relevance does it have other than an indication that an overall rise in market prices correlates to an overall improvement in the US economy? However, given that you also think that there are millions of other publicly traded stocks, I'm beginning to see a pattern emerge.
The market does not "set a price" -- the so-called market prices that you seem to be thinking of are, in fact, the marginal bids and asks for a specific quantity of shares of a particular equity in a particular market at a particular point in time. Those marginal bids and asks, nearly by definition of being marginal, are reflective of the price at which an individual buyer or seller is willing to transact, whether it be long or short.
You might be referring to the closing price as "the price" -- but when the closing bell is rung at the NYSE, the price where the last trade was settled is not "the price." When it's midnight in the International Date Line, the most recent price for a trade in the after-hours markets is not "the price."
The traditional market-makers in a specific equity didn't/don't "set the price."
To say that "the market sets the price" is as foolish as saying the US Federal Reserve sets the Fed Funds Rate. They don't. They do set the Discount Rate and are able to do so because they are a counterparty in transactions with banks that get priced at the Discount Rate. However, the Fed only sets a target for the Fed Funds rate and the actual Fed Funds rate is a function of the trading done by the banks and other participants in the money markets.
I think that these are similar, common mis-conceptions about prices being set.
If "the market sets the price," then it might seem counter-intuitive that a single market participant could move a market through a single large transaction or trading strategy.
And with comparisons against some irrelevant "average" company as your primary analytical tool, are you thinking about the very basic concept of beta and the Capital Asset Pricing Model (CAPM)? Beta, of course, shouldn't be confused with the other Greeeks, like delta, gamma, vega, and theta, as you well know.
Using "The Greeks" To Understand Options -- that was the first link I found that had a fairly clear, simple explanation. But I digress...
In fact, whenever I have sat down in a conference room with the market risk quants in a conference room just off the massive trading floor of one of the big Wall Street banks or the trading floor of an oil & gas super-major, I have never heard any mention of them incorporating CAPM into their Monte Carlo models. Maybe if JPMC's prop trading had been based on a simple beta strategy, they could have avoided that $2.3B mark-to-market loss (which may or may not ever materialize into an actual cash loss of any size).
And please explain whether you're talking about an arithmetic mean or a geometric mean. Was it a log-average? Also, what sort of distribution are you talking about? Are the data stochastic or deterministic? Also, if the time horizon has any relevance, please let me know. It would be helpful if you could be more precise so that I could have a better idea of exactly what it is that I don't understand.
I finally get it!! You don't understand the nuances of the differences between value and price. Again, off to wikipedia, it's a great Clifs Notes alternative to an education in finance and economics: Value (economics) - The various explanations
A relevant extract:
You may also want to revisit the definitions of future value and present value...
Of course your mistake is in not recognizing that if all fundamental analysis were identical, then it wouldn't necessarily be performed by so many different parties.
A key word that I used in my description of the cash flow models that analysts use is proprietary. Analysts of all types try to develop a competitive advantage by acquiring unique information (the potency of that sort of competitive advantage is why insider trading is illegal, so analysts look to as many unique and legal information sources that they can), developing the best ability to interpret the information in a way that is relevant and predictive, and considering the relevance of other factors and the degree and correlation of their potential impacts.
That's why different equity analysts set different price targets, different rating agencies might assign different debt ratings, two companies competing to acquire a third will make different offers, etc.
Bought a few more shares on Wednesday at $541, a day before this rec.
The P/E is silly low. $13 or so now, $10.25 if you adjust for the $110 billion in the bank. Forward P/E of $11.30 is under $9 if you adjust for the $110 billion.
Quote:
Originally Posted by enature
cameronj said it well. Zaky's analysis is based on little than more than the comparison of historic P/E ratios for AAPL. Such analysis can turn wrong if acceleration of earnings can't be sustained.
There are fundamental forces at the market that go beyond P/E ratios.
I see iOS fatigue on the horizon. Multiple icons drain your focus. Plus perennially unreliable syncing. Add to that a tiny 3.5” screen and no wonder Angry Birds, which requires rudimentary finger gestures, is the king.
The time is ripe for a mobile device with a bigger screen, a UI that steers your focus toward creating and editing meaningful content rather that distracting you with colorful entertainment icons.
Unless Apple ups its game soon, I see trouble. Competitors, while being at a disadvantage due to non-integrated software and hardware, are not sleeping.
Multiple icons drain my focus? Right. Thanks for your investing advice.
Quote:
Originally Posted by SpamSandwich
I agree. I think the institutional shorts will pressure it down to about $500. Set your buy orders, sit back and relax.
or set youre buy orders, sit back and miss it ...
If youre going for 500 at least place youre bids at 501 or 502 so you get filled before everyone else.
You might want to revisit the concept of 'value is what someone will pay for something'. That's certainly true when it comes to stock prices.
Let's say Widget Co is trading at $100 per share. If the value is really greater than $100 per share, people will buy it at $100, driving the price up. If the value is lower, they will sell, driving the price down. The entire principle of the stock market is that the value is determined by the collective evaluation of millions of potential investors who have to choose between many thousands of stocks.
"Future value" is a misnomer. No one knows the future value of anything. One can only guess what the value will be on a certain day.
Or, specifically:
http://www.ehow.com/facts_7154148_stock-market-value-definition.html
"Stock market value is the price at which a stock can be bought or sold at a stock exchange. It reflects the market's expectation regarding the value of a stock. Combined market values of leading individual stocks are used to produce the market index, which tells investors the overall market value."
Quote:
Originally Posted by tmhisey
Of course your mistake is in not recognizing that if all fundamental analysis were identical, then it wouldn't necessarily be performed by so many different parties.
A key word that I used in my description of the cash flow models that analysts use is proprietary. Analysts of all types try to develop a competitive advantage by acquiring unique information (the potency of that sort of competitive advantage is why insider trading is illegal, so analysts look to as many unique and legal information sources that they can), developing the best ability to interpret the information in a way that is relevant and predictive, and considering the relevance of other factors and the degree and correlation of their potential impacts.
That's why different equity analysts set different price targets, different rating agencies might assign different debt ratings, two companies competing to acquire a third will make different offers, etc.
Hmmm... all that fundamental analysis and it sounds to me like it all comes down to guessing.
"Oh crap, those stocks you had me buy three months ago have lost a lot of value. Hey, call up that buddy of yours and have him write an article telling everyone to buy."
Just make sure you guys have some liquid. At this point, if you can let the sleazy shorts get it to low $5's, it'll prove very lucrative for you in the long (near term) run.
Quote:
Originally Posted by benjaminm3
Its called risk/reward, and he judged the risk/reward to not be in his favor at 400 and 360. Common sense.
Then he judged poorly. Maybe loading his on apple stock at higher price is providing an extra incentive for buy advice now.