Yes, this is something I totally don't understand. What is it they so that's so great in Google? It has to be because Google doesn't have much in the way of competition except Yahoo and Bing. I think if Apple really wanted to get serious about building an exclusive search engine for its own products, they'd send Google's revenue into a tail spin. I'd hardly think Wall Street is going to be fooled by Android's market share anymore. That's just a bottomless money pit for any Android manufacturers. There's no profits to be had in Android and I doubt there ever will be. Wall Street's love for companies with huge amounts of market share is just ridiculous. That's all they seem to think about.
I heard Facebook had slowly but surely increased its ad revenues in the last 6 months; its valuation slightly less crazy than before ;-). That could be interesting. Facebook can do much more targetted ads than Google. Not sure how Google could respond to that?
I think DeWitt pointed out that part of the game played was for hedge or others to make large bets on Apple Stock going down through "loans" with the expectation the automated trading (a big part of large investment funds) will react by dumping the stock thereby creating an artificial albeit effective depression of the stock. Long term investors generally don't take the bait and they may buy at this time (as Apple does). I am not an expert so this is probably overly simplistic. In other words, the more institution investment orgs pile on the greater the risk of flight at some later date.
They actually DECREASED their holdings in Apple (less shares owned by 1.77%).
Their loss since the stock is UP 17% since the end of 2014.
Still don't understand why Wall Street only owns 62% of Apple, yet the love Google so much they own 83% of it.
This is an example of the private investor outsmarting Wall Street
Dude, you think you know everything? You freaking never know.
Tell me, what happens when there is a black swan event? What happens when your stock goes down 40%?
The market is not logical. Nor is it logical. It's often based on sentiment. That goes up and it goes down.
It's so tiresome for people to think they have everything figured out. Anyway, hope you are diversified for the RISK you are wiling to take. If not, you will learn.
I assume you are heavily in Apple stock. If a black swan event happens and the market drops 30-40%, how will you feel?
Who cares what "Wall Street" feels. You should care about what you feel - only. I'm sure you are willing to take the risk to win or lose on stock. You have no idea what will happen tomorrow. You don't. So don't think you are smarter. Or the individual investor is smarter.
Thats not correct. Microsoft+Google are worth over $720 billion combined.
My bad. That’s what I was aiming at, that Apple is worth more than Microsoft and Google combined. I also remember the day when Apple’s market cap exceeded that of Dell (before it went private) by more than 20X. Michael Dell will never live down his comment about Apple when it was in trouble.
I had thought it was mostly the hedge funds who are vultures and not other institutional investors who I thought were made up of very conservative groups of investors for pensions and mutual funds. I thought those large sell-offs were led by the super-slick hedge fund managers who appear to have no interest in any companies but only how quickly they can make money for themselves at any cost. I agree that Apple hasn't fundamentally changed for a number of years and yet the price had dropped to such a low point it would make most anyone who thought Apple was a good investment go running for the hills.
I was really wrong in thinking institutional fund managers weren't interested in owning Apple because Apple's institutional ownership hasn't risen much beyond 62% while Cisco, Google and Microsoft have institutional ownership in the 70% range. Heck, Netflix has 89% institutional ownership, so I figured the institutions were staying away from Apple in droves. I guess it's just my lack of understanding of how these things work. Maybe I should be careful about what I'm asking for if I don't fully understand the situation. I just thought there was conservative funds and the risky funds and I thought maybe Apple simply drew the wrong type of large investors.
I know I'm glad a lot of those hedge fund managers got burned when they dumped Apple in favor of Google and Samsung. Well, at least I think they did if they took their money and put it into Apple competitor companies. They were just so damn sure Apple was done for in 2012 and 2013 and I consider them the greediest rats of the worst sort. As they sold Apple and drove the price down, I bought Apple so it's their loss and not mine.
So have you apologized for calling for Tim Cook's head for a year, or not yet? Can you at least man up and announce that you were wrong, since we had to put up with 67,291 of your anti-Cook rants when the stock was low? You know, when every single one of your posts was proclaiming that the only way for the stock to recover was to fire Cook and replace him with a random douchebag? I'm still waiting for that apology- to Cook, and to this board. You also attacked anyone here that dared to suggest that the stock will recover, given a bit of time, and that Cook was the right guy for the job.
Honestly, you don't have the right to call anyone a greedy rat or attack anyone for believing Apple was done for. You had absolutely no faith in the company, and used all of 2013 to bash, vilify, and predict doom for them for months- solely because of stock price. You worshipped wall street and every single (false) prediction of the analysts, and decided not to have a shred of faith in Apple or its leadership. You had the most disgusting things to say about Cook that could fill a 12 volume encyclopedia- pretending that he dictated stock price, and proclaiming he was driving the company into the ground. But now that you've made money, it's all good and you won't hold yourself to account. So please, spare us your bullshit now. You have no credibility, and you've never understood Apple, clearly. Investors of your short-sightedness (FIRE COOK NOW BECAUSE OF STOCK) are so, so dangerous for the company. As I recall, you predicted the stock would fall to below $200 ($28 post split) if Cook remained. How did that work out for you?
happenned already. My Apple shares dropped 40% in early 2013. But I knew the dip in earnings was temporary. Once they brought out a large screen phone they would dominate again. And I was right. And now my stock is up 70%, thank you very much. Profits grew 38% and my stock grew also.
You can believe in the boogie man all you want. But in the mid-long term stock price is based on free cash flows and profits.
Get an education on finance before you start spewing your BS. Yes stocks can go up and down for stupid reasons IN THE SHORT TERM but Wall Street isn't stupid. If a company is making tons of money and returning tons of money to its investors the stock will increase. Problem is too many people like you don't understand how to read a Balance Sheet, P&L, and cash flow statement, and SEC filings. So when things don't go their way they just blame Wall Street manipulation.
If you are so sure of your theory name me a SINGLE stock that has gotten hammered constantly for THE LONG TERM (talking over 5 years) despite making profits and growing profits. Show me a single stock. You won't find one.
You missed my point. Nevermind.
I don't study balance sheets. I don't have the time nor the expertise.
Some of us are not fixated on "wall street". We buy and hold, choosing low-cost index funds. We know that it's not safe to buy any one stock or be heavily invested in one or a handful (although Buffet is doing that).
Over the long run, buying individual stocks is not a wise move. And it is a waste of time. At least for 99% of the population.
The price dropped in late 2013/ early 2013 because profit growth SLOWED DOWN and then DECLINED. Prior to that Apple was growing profits 50% YoY. It slowed down to below 30% in the Sept2012 Qtr and then 0% in Dec2012 Qtr. Then in Mar2013 Qtr profit growth went NEGATIVE.
Because of this a ton of GROWTH investors exited the stock.
Now growth is back. Last quarter earnings was up 38%.
That was more of a complex situation than you're stating here. What had happened was that hedge funds and other investment houses had sold Apple off big. The reason for that was that the stock had risen so much the previous year that they needed to sell for tax purposes. That large sell off at the end of the year led to a downturn in the stock price. Those drops to the high mid $600 price that resulted led to a minor panic in the daily trade market. The fact that 2013 was also a slow year for Apple, product wise, let to further price drops. That persisted until Apple's fortunes changed during the next year. As sales and profits began to move up again, these funds also began buybacks. All of this together, and I suppose Apple's huge stock buybacks as well, let to a sharply higher price.
A problem that most investment houses have is how they are rated by the government and rating agencies. For very large funds, this isn't important, but for smaller funds, those that just have tens of billions under management, or less, are affected by how much of their total investments they have from one vehicle. If they have less than 25% invested in one stock, they are rated as a diversified fund. But if they reach the level of 25%, then their rating changes. Most funds want to rated as being diversified.
So this leads to maximum amounts a fund can buy. In late 2012, many funds were already maxed out on Apple. In addition, many funds also have their own charter's rules about what percentage they can buy of a single security, which may be much lower than 25%. These things handcuff an investment firm in the good times for a major security, but overall prevent them from becoming too dependent on a single investment.
Whereas an investor such as myself has no one other than my wife to be concerned with, and she doesn't bother worrying about my investments, just her own. I look back at when I reinvested in Apple after divesting myself of most of my investments in 2000. That was in mid 2004. I still think of 2002 and 2003 when Apple was even lower, and didn't reinvest. Too bad. But I did in mid 2004, for $16,93 a share. Now, the investment almost seems trivial, and if I was willing to take more of a chance, I would have invested more. But I can't really complain, except to say that the less than 10% of my portfolio that I invested back then has become about 80% of my current one.
So each share I bought back in 2004 for what now seems a measly $16.93 is equal to $1,813. That's over a 107 times increase per share. But investment firms may not be able to sustain a holding for so long.
Pardon my ignorance but this article's information gave me a bit of a whiplash. Wasn't there an article here on Appleinsider in December(?) talking about how the large investors were exiting APPL stock in droves and would not recommend the stock? Now all of a sudden it's the darling of Wall Street?
Funds investing is a waste of your time and money.
:???:
1) How is savvy investing a waste of time and money?
2) Where should I invest my savings if not into companies I believe have a bright future?
I think he means putting your money in actively-managed funds is a waste of time and money. And he's right.
1) A vast majority -- and I mean VAST -- of actively-managed funds underperform index funds. The empirical evidence on this is abundant. The proportion varies from two-thirds to four-fifths in a given year. Moreover, there is no correlation at all from one year to the next in terms of performance for any given fund. In other words, outperformance is random.
2) The unnecessary amount of trading that these funds do results in transaction costs, and more importantly, taxes for investors. In fact, the tax bill often arrives at the wrong time, since they tend to sell the good stuff when times are bad (to meet redemptions, to meet margin calls etc), and passthrough to investors the tax bill. These costs add up dramatically over the years, lowering returns.
3) There is survivorship and look-back bias in the data, which exaggerates fund performance. If we pause to think about it, who are the funds that survived? The ones that were successful. The ones that sucked disappeared. So, the reported result for these funds actually overstate returns by biasing the data towards those that did better!
Bottom line: it is a mystery to me why anyone bothers to invest in actively managed funds. To assume that these guys/gals know something that we don't is simply not justified by the evidence.
Pardon my ignorance but this article's information gave me a bit of a whiplash. Wasn't there an article here on Appleinsider in December(?) talking about how the large investors were exiting APPL stock in droves and would not recommend the stock? Now all of a sudden it's the darling of Wall Street?
Large investors don't love stocks, they love profits. They'll go wherever they need to go to get them.
Apple closed today at over $0.75 trillion dollar market cap!
On our way to $1 trillion by May.
I admire your enthusiasm, but wouldn't that absolutely require
an incredibly well-received <span style="line-height:1.4em;">introduction of ?Watch? </span>
<span style="line-height:1.4em;">(Which some of us - you included - regularly gainsay.)</span>
And a lot more momentum for ?Pay as well?
Sure. My May prediction is wildly optimistic, but I had a bet with Tallest Skil.
Many companies have 50% (or more) of their stock owned by large institutions. Apple's market value is much larger than for any other company, so the value of the stock owned by institutions is larger than for any other company. The value of the stock owned by retail investors also is larger than for any other company.
Yes, this is something I totally don't understand. What is it they so that's so great in Google? It has to be because Google doesn't have much in the way of competition except Yahoo and Bing. I think if Apple really wanted to get serious about building an exclusive search engine for its own products, they'd send Google's revenue into a tail spin. I'd hardly think Wall Street is going to be fooled by Android's market share anymore. That's just a bottomless money pit for any Android manufacturers. There's no profits to be had in Android and I doubt there ever will be. Wall Street's love for companies with huge amounts of market share is just ridiculous. That's all they seem to think about.
Google's competition is any company pulling in advertising dollars, as there's only so many dollars spent each year in online advertising (rises each year, but more and more players to split the kitty among). So that means Facebook, for example is an already large and rapidly growing competitor to ? Google. There's a reason Google is casting about in a furious effort to invent something new in a big market. So far, they don't seem to have found their magic bullet. My bet is on the Apple tortoise continuing to outpace the frenetic Google hare in the race to invent the future.
Dude, you think you know everything? You freaking never know.
Tell me, what happens when there is a black swan event? What happens when your stock goes down 40%?
The market is not logical. Nor is it logical. It's often based on sentiment. That goes up and it goes down.
It's so tiresome for people to think they have everything figured out. Anyway, hope you are diversified for the RISK you are wiling to take. If not, you will learn.
I assume you are heavily in Apple stock. If a black swan event happens and the market drops 30-40%, how will you feel?
Who cares what "Wall Street" feels. You should care about what you feel - only. I'm sure you are willing to take the risk to win or lose on stock. You have no idea what will happen tomorrow. You don't. So don't think you are smarter. Or the individual investor is smarter.
Have a nice day,
P
What's your point? If the market goes down 30-40%, a diversified basket of stocks will likely get whacked just as hard, or harder, than Apple. Apple did go down more than 40% in the nine month period from Sept 21, 2012 through June 30, 2013. I, for one, held through that period, and have since recouped all of the drop in my portfolio value and climbed higher, having been almost exclusively in Apple. To quote Buffett, "Once you have identified the very best business, how much money would you invest in the second best business? Or the third best? Diversification is for those who don't know what they're doing." Buffett also suggests you shouldn't purchase the shares of a company if you don't have the courage of your conviction that the underlying business is solid, such that you'd not sell even if the stock price dropped 50%. In fact, he says, you'd be happy at having been given an opportunity to purchase more shares at the discounted price.
Comments
Indeed, and proves the exception to the rule: two wrongs don't make a right. ????
Yes, this is something I totally don't understand. What is it they so that's so great in Google? It has to be because Google doesn't have much in the way of competition except Yahoo and Bing. I think if Apple really wanted to get serious about building an exclusive search engine for its own products, they'd send Google's revenue into a tail spin. I'd hardly think Wall Street is going to be fooled by Android's market share anymore. That's just a bottomless money pit for any Android manufacturers. There's no profits to be had in Android and I doubt there ever will be. Wall Street's love for companies with huge amounts of market share is just ridiculous. That's all they seem to think about.
I heard Facebook had slowly but surely increased its ad revenues in the last 6 months; its valuation slightly less crazy than before ;-). That could be interesting. Facebook can do much more targetted ads than Google. Not sure how Google could respond to that?
What a joke Wall Street is.
They actually DECREASED their holdings in Apple (less shares owned by 1.77%).
Their loss since the stock is UP 17% since the end of 2014.
Still don't understand why Wall Street only owns 62% of Apple, yet the love Google so much they own 83% of it.
This is an example of the private investor outsmarting Wall Street
Dude, you think you know everything? You freaking never know.
Tell me, what happens when there is a black swan event? What happens when your stock goes down 40%?
The market is not logical. Nor is it logical. It's often based on sentiment. That goes up and it goes down.
It's so tiresome for people to think they have everything figured out. Anyway, hope you are diversified for the RISK you are wiling to take. If not, you will learn.
I assume you are heavily in Apple stock. If a black swan event happens and the market drops 30-40%, how will you feel?
Who cares what "Wall Street" feels. You should care about what you feel - only. I'm sure you are willing to take the risk to win or lose on stock. You have no idea what will happen tomorrow. You don't. So don't think you are smarter. Or the individual investor is smarter.
Have a nice day,
P
Thats not correct. Microsoft+Google are worth over $720 billion combined.
My bad. That’s what I was aiming at, that Apple is worth more than Microsoft and Google combined. I also remember the day when Apple’s market cap exceeded that of Dell (before it went private) by more than 20X. Michael Dell will never live down his comment about Apple when it was in trouble.
Uh. so 100% of your retirement is in AAPL? pretty scary.
It is very scary looking at how much money I have been making since I went 100% AAPL many years ago.
Until you sell out, you haven't made a dime. Just ask Bernie Madoff's former clients.
All kinds of "people*" manipulate stock prices for all kinds of reasons, and anyone can get pinched.
("*people" as in Corporations Are People Too, but they never go to jail)
I had thought it was mostly the hedge funds who are vultures and not other institutional investors who I thought were made up of very conservative groups of investors for pensions and mutual funds. I thought those large sell-offs were led by the super-slick hedge fund managers who appear to have no interest in any companies but only how quickly they can make money for themselves at any cost. I agree that Apple hasn't fundamentally changed for a number of years and yet the price had dropped to such a low point it would make most anyone who thought Apple was a good investment go running for the hills.
I was really wrong in thinking institutional fund managers weren't interested in owning Apple because Apple's institutional ownership hasn't risen much beyond 62% while Cisco, Google and Microsoft have institutional ownership in the 70% range. Heck, Netflix has 89% institutional ownership, so I figured the institutions were staying away from Apple in droves. I guess it's just my lack of understanding of how these things work. Maybe I should be careful about what I'm asking for if I don't fully understand the situation. I just thought there was conservative funds and the risky funds and I thought maybe Apple simply drew the wrong type of large investors.
I know I'm glad a lot of those hedge fund managers got burned when they dumped Apple in favor of Google and Samsung. Well, at least I think they did if they took their money and put it into Apple competitor companies. They were just so damn sure Apple was done for in 2012 and 2013 and I consider them the greediest rats of the worst sort. As they sold Apple and drove the price down, I bought Apple so it's their loss and not mine.
So have you apologized for calling for Tim Cook's head for a year, or not yet? Can you at least man up and announce that you were wrong, since we had to put up with 67,291 of your anti-Cook rants when the stock was low? You know, when every single one of your posts was proclaiming that the only way for the stock to recover was to fire Cook and replace him with a random douchebag? I'm still waiting for that apology- to Cook, and to this board. You also attacked anyone here that dared to suggest that the stock will recover, given a bit of time, and that Cook was the right guy for the job.
Honestly, you don't have the right to call anyone a greedy rat or attack anyone for believing Apple was done for. You had absolutely no faith in the company, and used all of 2013 to bash, vilify, and predict doom for them for months- solely because of stock price. You worshipped wall street and every single (false) prediction of the analysts, and decided not to have a shred of faith in Apple or its leadership. You had the most disgusting things to say about Cook that could fill a 12 volume encyclopedia- pretending that he dictated stock price, and proclaiming he was driving the company into the ground. But now that you've made money, it's all good and you won't hold yourself to account. So please, spare us your bullshit now. You have no credibility, and you've never understood Apple, clearly. Investors of your short-sightedness (FIRE COOK NOW BECAUSE OF STOCK) are so, so dangerous for the company. As I recall, you predicted the stock would fall to below $200 ($28 post split) if Cook remained. How did that work out for you?
happenned already. My Apple shares dropped 40% in early 2013. But I knew the dip in earnings was temporary. Once they brought out a large screen phone they would dominate again. And I was right. And now my stock is up 70%, thank you very much. Profits grew 38% and my stock grew also.
You can believe in the boogie man all you want. But in the mid-long term stock price is based on free cash flows and profits.
Get an education on finance before you start spewing your BS. Yes stocks can go up and down for stupid reasons IN THE SHORT TERM but Wall Street isn't stupid. If a company is making tons of money and returning tons of money to its investors the stock will increase. Problem is too many people like you don't understand how to read a Balance Sheet, P&L, and cash flow statement, and SEC filings. So when things don't go their way they just blame Wall Street manipulation.
If you are so sure of your theory name me a SINGLE stock that has gotten hammered constantly for THE LONG TERM (talking over 5 years) despite making profits and growing profits. Show me a single stock. You won't find one.
You missed my point. Nevermind.
I don't study balance sheets. I don't have the time nor the expertise.
Some of us are not fixated on "wall street". We buy and hold, choosing low-cost index funds. We know that it's not safe to buy any one stock or be heavily invested in one or a handful (although Buffet is doing that).
Over the long run, buying individual stocks is not a wise move. And it is a waste of time. At least for 99% of the population.
That was more of a complex situation than you're stating here. What had happened was that hedge funds and other investment houses had sold Apple off big. The reason for that was that the stock had risen so much the previous year that they needed to sell for tax purposes. That large sell off at the end of the year led to a downturn in the stock price. Those drops to the high mid $600 price that resulted led to a minor panic in the daily trade market. The fact that 2013 was also a slow year for Apple, product wise, let to further price drops. That persisted until Apple's fortunes changed during the next year. As sales and profits began to move up again, these funds also began buybacks. All of this together, and I suppose Apple's huge stock buybacks as well, let to a sharply higher price.
A problem that most investment houses have is how they are rated by the government and rating agencies. For very large funds, this isn't important, but for smaller funds, those that just have tens of billions under management, or less, are affected by how much of their total investments they have from one vehicle. If they have less than 25% invested in one stock, they are rated as a diversified fund. But if they reach the level of 25%, then their rating changes. Most funds want to rated as being diversified.
So this leads to maximum amounts a fund can buy. In late 2012, many funds were already maxed out on Apple. In addition, many funds also have their own charter's rules about what percentage they can buy of a single security, which may be much lower than 25%. These things handcuff an investment firm in the good times for a major security, but overall prevent them from becoming too dependent on a single investment.
Whereas an investor such as myself has no one other than my wife to be concerned with, and she doesn't bother worrying about my investments, just her own. I look back at when I reinvested in Apple after divesting myself of most of my investments in 2000. That was in mid 2004. I still think of 2002 and 2003 when Apple was even lower, and didn't reinvest. Too bad. But I did in mid 2004, for $16,93 a share. Now, the investment almost seems trivial, and if I was willing to take more of a chance, I would have invested more. But I can't really complain, except to say that the less than 10% of my portfolio that I invested back then has become about 80% of my current one.
So each share I bought back in 2004 for what now seems a measly $16.93 is equal to $1,813. That's over a 107 times increase per share. But investment firms may not be able to sustain a holding for so long.
I think he means putting your money in actively-managed funds is a waste of time and money. And he's right.
1) A vast majority -- and I mean VAST -- of actively-managed funds underperform index funds. The empirical evidence on this is abundant. The proportion varies from two-thirds to four-fifths in a given year. Moreover, there is no correlation at all from one year to the next in terms of performance for any given fund. In other words, outperformance is random.
2) The unnecessary amount of trading that these funds do results in transaction costs, and more importantly, taxes for investors. In fact, the tax bill often arrives at the wrong time, since they tend to sell the good stuff when times are bad (to meet redemptions, to meet margin calls etc), and passthrough to investors the tax bill. These costs add up dramatically over the years, lowering returns.
3) There is survivorship and look-back bias in the data, which exaggerates fund performance. If we pause to think about it, who are the funds that survived? The ones that were successful. The ones that sucked disappeared. So, the reported result for these funds actually overstate returns by biasing the data towards those that did better!
Bottom line: it is a mystery to me why anyone bothers to invest in actively managed funds. To assume that these guys/gals know something that we don't is simply not justified by the evidence.
(Did a few small edits).
Large investors don't love stocks, they love profits. They'll go wherever they need to go to get them.
Apple closed today at over $0.75 trillion dollar market cap!
On our way to $1 trillion by May.
I admire your enthusiasm, but wouldn't that absolutely require
an incredibly well-received introduction of ?Watch?
(Which some of us - you included - regularly gainsay.)
And a lot more momentum for ?Pay as well?
Sure. My May prediction is wildly optimistic, but I had a bet with Tallest Skil.
I love to hear this. It reminds how ugly stupid my BMO/NB brokerage was to frequently try to get me to dump my Apple shares.
Finally they dumped me for not following their stupid selfish suggestions on what to buy.
But most investors know that big bank brokerages are only thinking of themselves.
Unfortunately too many national brokerages have been taken over by the big banks.
They keep saying they'll take care of our wealth, sure they will to fatten their pockets!
OK hedgies I'll gradually sell you some of my very small holding, just keep driving the AAPL price up.
Many companies have 50% (or more) of their stock owned by large institutions. Apple's market value is much larger than for any other company, so the value of the stock owned by institutions is larger than for any other company. The value of the stock owned by retail investors also is larger than for any other company.
That's exactly what you should do. Which is not funds investing. It's individual stock investing.
Google's competition is any company pulling in advertising dollars, as there's only so many dollars spent each year in online advertising (rises each year, but more and more players to split the kitty among). So that means Facebook, for example is an already large and rapidly growing competitor to ? Google. There's a reason Google is casting about in a furious effort to invent something new in a big market. So far, they don't seem to have found their magic bullet. My bet is on the Apple tortoise continuing to outpace the frenetic Google hare in the race to invent the future.
What's your point? If the market goes down 30-40%, a diversified basket of stocks will likely get whacked just as hard, or harder, than Apple. Apple did go down more than 40% in the nine month period from Sept 21, 2012 through June 30, 2013. I, for one, held through that period, and have since recouped all of the drop in my portfolio value and climbed higher, having been almost exclusively in Apple. To quote Buffett, "Once you have identified the very best business, how much money would you invest in the second best business? Or the third best? Diversification is for those who don't know what they're doing." Buffett also suggests you shouldn't purchase the shares of a company if you don't have the courage of your conviction that the underlying business is solid, such that you'd not sell even if the stock price dropped 50%. In fact, he says, you'd be happy at having been given an opportunity to purchase more shares at the discounted price.