So adjusted for inflation, Microsoft's $258B current market cap is actually closer to $200B compared to it's peak cap?
Funny, and on point. People are making a big deal out of this Microsoft adjusted for inflation thing ("big" adjusted for the relative non-importance of this story), however, I don't see anyone adjusting Microsoft's old cap DOWN due to the fact it was riding an irrational bubble. If Apple rode a wave, not of their own doing, to a $2000 stock price, then there might be some room to argue about a comparison.
As it is, I have a new iPad, Macbook Air, and Mini this year between work and home, and I'm loving it. Even our psycho IT lead has been revealed as a closet Mac user despite his pushing Dells in the workplace. For investors, this sort of stuff matters, records are just something to tweet about....
Even our psycho IT lead has been revealed as a closet Mac user despite his pushing Dells in the workplace. For investors, this sort of stuff matters, records are just something to tweet about....
"...64.4% share in the mobile phone market in (the second quarter)…"
64.4%? That can't be right, can it?
People saying that MSFT peaked at a price "adjusted for inflation" that is higher than Apple now… well, but… there's no meaningful reason to make that adjustment when valuing market cap. It's an interesting exercise, but to say Apple has another $200 billion to go to pass MSFT is a bit disingenuous.
By the reverse measure, you could also say MSFT has fallen MUCH further than the market indicates… the current $257bn cap they enjoy today is REALLY ONLY worth about $100bn in peak dollars… so they haven't lost a little over half their value… they've lost almost 85% of their value! Panic Room!!!!
Apple is today, in real dollar terms, the highest valued company by market cap in history (excluding the controversial and brief trillion dollar measure given that Chinese company).
People saying that MSFT peaked at a price "adjusted for inflation" that is higher than Apple now… well, but… there's no meaningful reason to make that adjustment when valuing market cap. It's an interesting exercise, but to say Apple has another $200 billion to go to pass MSFT is a bit disingenuous.
It's not at all disingenuous. There is a time value to money - you can't compare money at any one time with money at a different time unless inflation has been zero over that time frame. The only legitimate comparison of past, present, and future events considers time value of money.
It's like all those reports about top selling movies. They always use 'current dollars' which makes recent films look better than they really are. If you adjust for inflation (that is, you consider the NUMBER of tickets sold rather than the dollars received), I believe Gone with the Wind is still #1.
Now, one can argue that the internet bubble distorted things, so it would be reasonable to consider Microsoft's share of the total combined global market cap at that time vs Apple's share of total combined global market cap today, but that doesn't change the fact that you need to consider inflation.
By the reverse measure, you could also say MSFT has fallen MUCH further than the market indicates… the current $257bn cap they enjoy today is REALLY ONLY worth about $100bn in peak dollars… so they haven't lost a little over half their value… they've lost almost 85% of their value! Panic Room!!!!
Sure. You could use that logic - and if you're a smart investor, you would.
Apple is today, in real dollar terms, the highest valued company by market cap in history (excluding the controversial and brief trillion dollar measure given that Chinese company).
No, it's not. You said 'in real dollar terms' which means after adjustment for inflation.
If you had said "in CURRENT dollar terms", you would have been correct. But it's not very meaningful.
Let's say that we hit a hyperinflation phase and the dollar declines in value by 99.9%. Pick a company with $1 B market cap today. Now, after the dollar declines by 99.9%, the market cap would be $1 trillion (if nothing else changes). By your argument, that company is worth more than AAPL. Obviously, that's nonsense.
Funny, and on point. People are making a big deal out of this Microsoft adjusted for inflation thing ("big" adjusted for the relative non-importance of this story),
There are a lot of people who just can't accept the fact that Apple is succeeding so they are compelled to haul out the straw man "but" arguments. Either that or watch their brains explode.
There are a lot of people who just can't accept the fact that Apple is succeeding so they are compelled to haul out the straw man "but" arguments. Either that or watch their brains explode.
The orange block will expand out to the remaining 70%.
Great graph, although this is still not a graph of "all phones". It is a graph of "feature and smartphones". Big difference, although the remaining non-feature, non-smartphone phones are diminishing in number compared to the overall number of phones, they are still a significant number especially in developing countries.
Wrong. Corrected for inflation MS was worth a lot more..
I think they are now saying IBM is the most valuable - but - you can't just take a company pick it up and apply a formula to it to decide what it would be worth in todays $'s. A lot of things went into creating that inflation (and IBM's price at the time) that are ignored. there are more people on the planet now - we sell to more countries than back then - we sell at higher volumes but at cheeper prices and there is much more competition and the NASDAQ has a VERY different make-up than it did back then. You are comparing apples (get it) and oranges. But, wait, we do know what inflation and every other market change did to IBM - we don't need to apply a formula - in 2012 IBM has a market cap of $228 billion. That is what IBM is worth in 2012 $'s. Just my humble opinion.
The orange block will expand out to the remaining 70%.
How come Apple's 5% is smaller than the Nokia 5%? Notice also that several of the 1% slices are of a different size on the graph. Does this indicate that the numbers on the graphic are rounded and the graph actually indicates the real value or that we are just seeing an example of somebody putting together a crappy (read sloppy) graph?
Wrong. Corrected for inflation MS was worth a lot more..
However at the time Microsoft's P/E was sitting at 75 while Apple's is currently only at 15... that's an enormous difference.
People thought Microsoft was going to grow forever and the stock was priced accordingly (as was every other dot com company)... then the bubble burst and those who invested at the time lost their asses. Apple's P/E is set around an "established" range, not that of a company that continues to grow at the pace it does. Apple currently develops five platforms: OS X, iOS, WebKit, iTunes, and iCloud, all of which work together seamlessly to unable them to create well designed, elegant products. It's a no-brainer that they will continue to leverage these platforms when they enter new markets and as such they should be able to continue their unprecedented growth.
I think they are now saying IBM is the most valuable - but - you can't just take a company pick it up and apply a formula to it to decide what it would be worth in todays $'s. A lot of things went into creating that inflation (and IBM's price at the time) that are ignored. there are more people on the planet now - we sell to more countries than back then - we sell at higher volumes but at cheeper prices and there is much more competition and the NASDAQ has a VERY different make-up than it did back then. You are comparing apples (get it) and oranges. But, wait, we do know what inflation and every other market change did to IBM - we don't need to apply a formula - in 2012 IBM has a market cap of $228 billion. That is what IBM is worth in 2012 $'s. Just my humble opinion.
That's undoubtedly true. If one only wants to know what publicly traded company is more valuable today, that's clearly Apple.
However, there ARE reasons why you'd want to compare a company to past companies to get some assessment of their impact on the global economy or their ability to influence the markets. In that case, it is necessary to adjust for time value of money in some way. Doing an inflation adjustment is certainly the easiest, but may not be the most accurate.
If I had to choose, I'd add up the entire global combined market capitalization at any given point in time and look at the percentage. That is, if Apple is worth $650 B today and the global market cap for all public companies combined is $650 T, then Apple is worth 0.10% of the total. Now, if Microsoft was worth $600 B a decade ago and the entire market was worth $500 T, then Microsoft was worth 0.12% of the total - or a larger percentage than Apple. Similarly, if the entire market was worth $1,200 T and MS as worth $600 B, then MS was worth 0.05%.
This calculation takes into account a large number of variables such as:
- Time value of money (inflation)
- Market bubbles (unless they're restricted to only a single stock or segment)
If I had to guess, I wouldn't be surprised if Standard Oil of a century or so ago had the greatest percentage of the market of any publicly traded company.
Now, there are other methods one might use. For example, one might divide the company's market cap by the total global GDP at that point in time and analyze it as above.
Comments
Quote:
Originally Posted by djmikeo
So adjusted for inflation, Microsoft's $258B current market cap is actually closer to $200B compared to it's peak cap?
Funny, and on point. People are making a big deal out of this Microsoft adjusted for inflation thing ("big" adjusted for the relative non-importance of this story), however, I don't see anyone adjusting Microsoft's old cap DOWN due to the fact it was riding an irrational bubble. If Apple rode a wave, not of their own doing, to a $2000 stock price, then there might be some room to argue about a comparison.
As it is, I have a new iPad, Macbook Air, and Mini this year between work and home, and I'm loving it. Even our psycho IT lead has been revealed as a closet Mac user despite his pushing Dells in the workplace. For investors, this sort of stuff matters, records are just something to tweet about....
Quote:
Originally Posted by markbyrn
Of course if Apple fails to meet these wild analyst expectations, the doomsdayers will cluck that it's the beginning of the end for Apple.
Apple is doomed!!
/s
Quote:
Originally Posted by wvmb99
Even our psycho IT lead has been revealed as a closet Mac user despite his pushing Dells in the workplace. For investors, this sort of stuff matters, records are just something to tweet about....
"a closet Mac user"
WTF?!
"...64.4% share in the mobile phone market in (the second quarter)…"
64.4%? That can't be right, can it?
People saying that MSFT peaked at a price "adjusted for inflation" that is higher than Apple now… well, but… there's no meaningful reason to make that adjustment when valuing market cap. It's an interesting exercise, but to say Apple has another $200 billion to go to pass MSFT is a bit disingenuous.
By the reverse measure, you could also say MSFT has fallen MUCH further than the market indicates… the current $257bn cap they enjoy today is REALLY ONLY worth about $100bn in peak dollars… so they haven't lost a little over half their value… they've lost almost 85% of their value! Panic Room!!!!
Apple is today, in real dollar terms, the highest valued company by market cap in history (excluding the controversial and brief trillion dollar measure given that Chinese company).
Quote:
Originally Posted by logandigges
"a closet Mac user"
WTF?!
He uses his Mac in a closet. What's wrong with that? I'm a closet closet Mac user. I don't announce in public that I use it in a closet.
Originally Posted by Harbinger
He uses his Mac in a closet. What's wrong with that? I'm a closet closet Mac user. I don't announce in public that I use it in a closet.
What about the people that keep their Macs in a closet as an iTunes server?
This is turning into a real tweedle beetle battle.
Quote:
Originally Posted by logandigges
"a closet Mac user"
WTF?!
Some people still think it's 1998.
It's not at all disingenuous. There is a time value to money - you can't compare money at any one time with money at a different time unless inflation has been zero over that time frame. The only legitimate comparison of past, present, and future events considers time value of money.
It's like all those reports about top selling movies. They always use 'current dollars' which makes recent films look better than they really are. If you adjust for inflation (that is, you consider the NUMBER of tickets sold rather than the dollars received), I believe Gone with the Wind is still #1.
Now, one can argue that the internet bubble distorted things, so it would be reasonable to consider Microsoft's share of the total combined global market cap at that time vs Apple's share of total combined global market cap today, but that doesn't change the fact that you need to consider inflation.
Sure. You could use that logic - and if you're a smart investor, you would.
No, it's not. You said 'in real dollar terms' which means after adjustment for inflation.
If you had said "in CURRENT dollar terms", you would have been correct. But it's not very meaningful.
Let's say that we hit a hyperinflation phase and the dollar declines in value by 99.9%. Pick a company with $1 B market cap today. Now, after the dollar declines by 99.9%, the market cap would be $1 trillion (if nothing else changes). By your argument, that company is worth more than AAPL. Obviously, that's nonsense.
Yeah it should be 6.4%:
http://www.idc.com/getdoc.jsp?containerId=prUS23624612
They are saying it's good that they have so much profit with such a small share as it means lots of room for growth.
The 6.4% share is of all phones. This graph shows one set of figures of the shares in 2011:
http://thenextweb.com/mobile/2011/11/29/report-smartphones-account-for-just-27-of-all-mobile-phones-worldwide/
The orange block will expand out to the remaining 70%.
There are a lot of people who just can't accept the fact that Apple is succeeding so they are compelled to haul out the straw man "but" arguments. Either that or watch their brains explode.
Quote:
Originally Posted by lkrupp
There are a lot of people who just can't accept the fact that Apple is succeeding so they are compelled to haul out the straw man "but" arguments. Either that or watch their brains explode.
That just about says it all.
A far cry from the "beleagured apple" years of Scully and Amelio! We've come long way baby!
Quote:
Originally Posted by Marvin
Quote:
Originally Posted by Turley Muller
it's a typo. Should be 6.4%
Yeah it should be 6.4%:
http://www.idc.com/getdoc.jsp?containerId=prUS23624612
They are saying it's good that they have so much profit with such a small share as it means lots of room for growth.
The 6.4% share is of all phones. This graph shows one set of figures of the shares in 2011:
http://thenextweb.com/mobile/2011/11/29/report-smartphones-account-for-just-27-of-all-mobile-phones-worldwide/
The orange block will expand out to the remaining 70%.
Great graph, although this is still not a graph of "all phones". It is a graph of "feature and smartphones". Big difference, although the remaining non-feature, non-smartphone phones are diminishing in number compared to the overall number of phones, they are still a significant number especially in developing countries.
Quote:
Originally Posted by Lerxt
Wrong. Corrected for inflation MS was worth a lot more..
I think they are now saying IBM is the most valuable - but - you can't just take a company pick it up and apply a formula to it to decide what it would be worth in todays $'s. A lot of things went into creating that inflation (and IBM's price at the time) that are ignored. there are more people on the planet now - we sell to more countries than back then - we sell at higher volumes but at cheeper prices and there is much more competition and the NASDAQ has a VERY different make-up than it did back then. You are comparing apples (get it) and oranges. But, wait, we do know what inflation and every other market change did to IBM - we don't need to apply a formula - in 2012 IBM has a market cap of $228 billion. That is what IBM is worth in 2012 $'s. Just my humble opinion.
Quote:
Originally Posted by Marvin
Yeah it should be 6.4%:
http://www.idc.com/getdoc.jsp?containerId=prUS23624612
They are saying it's good that they have so much profit with such a small share as it means lots of room for growth.
The 6.4% share is of all phones. This graph shows one set of figures of the shares in 2011:
http://thenextweb.com/mobile/2011/11/29/report-smartphones-account-for-just-27-of-all-mobile-phones-worldwide/
The orange block will expand out to the remaining 70%.
How come Apple's 5% is smaller than the Nokia 5%? Notice also that several of the 1% slices are of a different size on the graph. Does this indicate that the numbers on the graphic are rounded and the graph actually indicates the real value or that we are just seeing an example of somebody putting together a crappy (read sloppy) graph?
Just curious.
Amazing how those rounding errors add up!
Quote:
Originally Posted by Lerxt
Wrong. Corrected for inflation MS was worth a lot more..
However at the time Microsoft's P/E was sitting at 75 while Apple's is currently only at 15... that's an enormous difference.
People thought Microsoft was going to grow forever and the stock was priced accordingly (as was every other dot com company)... then the bubble burst and those who invested at the time lost their asses. Apple's P/E is set around an "established" range, not that of a company that continues to grow at the pace it does. Apple currently develops five platforms: OS X, iOS, WebKit, iTunes, and iCloud, all of which work together seamlessly to unable them to create well designed, elegant products. It's a no-brainer that they will continue to leverage these platforms when they enter new markets and as such they should be able to continue their unprecedented growth.
Apple is set to lose the Samsung case. That's what it looks like.
Originally Posted by AdonisSMU
Apple is set to lose the Samsung case. That's what it looks like.
Uh… huh…
That's undoubtedly true. If one only wants to know what publicly traded company is more valuable today, that's clearly Apple.
However, there ARE reasons why you'd want to compare a company to past companies to get some assessment of their impact on the global economy or their ability to influence the markets. In that case, it is necessary to adjust for time value of money in some way. Doing an inflation adjustment is certainly the easiest, but may not be the most accurate.
If I had to choose, I'd add up the entire global combined market capitalization at any given point in time and look at the percentage. That is, if Apple is worth $650 B today and the global market cap for all public companies combined is $650 T, then Apple is worth 0.10% of the total. Now, if Microsoft was worth $600 B a decade ago and the entire market was worth $500 T, then Microsoft was worth 0.12% of the total - or a larger percentage than Apple. Similarly, if the entire market was worth $1,200 T and MS as worth $600 B, then MS was worth 0.05%.
This calculation takes into account a large number of variables such as:
- Time value of money (inflation)
- Market bubbles (unless they're restricted to only a single stock or segment)
If I had to guess, I wouldn't be surprised if Standard Oil of a century or so ago had the greatest percentage of the market of any publicly traded company.
Now, there are other methods one might use. For example, one might divide the company's market cap by the total global GDP at that point in time and analyze it as above.