The facts are that Apple revenue and profit is in decline YOY. Bulls and bears both acknowledge this as fact. Next fact is apple guidance for next quarter is also a decline YOY. When a company is in decline investors and traders believe that growth is over for Apple. Now everyone wonders how far will the decline be. Where will it stabilize? Will it be at revenue 10% lower? Will it be 50% lower when it stops? When it stops will it merely flatline and find a base with no growth at this lower level? Nobody knows the answer yet, not even Apple.
This brings uncertainty into the equation. The facts right now in front of everyone are that apple is no longer a growth company. It is a shrinking company with no idea where the decline ends.
Cramer has advised, "don't trade apple, own it!". If you did that for the last year or more you got crushed by the index and literally held the worst dow 30 stock you could buy. Any of the other 29 Dow stocks did better. Thanks Cramer.
Apple isn't going bankrupt anytime soon. We all know that. We do know Apple at 512B market cap IS the iPhone. If iPhone volume shrinks, margins or asp's shrink things will get worse for the revenue, profits and stock.
I don't understand why anybody wants to be short apple or be long the stock. This easily falls into the too hard bucket. Plenty of other easier stocks and sectors out there right now to make money in. Apple, like it or not, is plagued with uncertainty and a seeming hate from Wall Street traders and investors.
There's nothing Tim Cook or anyone else is going to say that is going to convince short term traders of AAPL about anything. They're going to continue to be upset that Apple's fundamentals - revenue, profit, and growth cycles - are not sufficient to overcome the strange valuations of companies like Amazon and Google. Nothing is going to change that except if the market raises the price of AAPL.
However, it's not Apple that has changed. It has never talked about unannounced products. It has never released a new product category that didn't get slammed in the media as non-innovative. This whole assertion that Apple has lost its ability to innovate is a bit suspect, but whatever.
The best advice was Cramer's last line. Own it, don't trade it. I guess I'm lucky because I care about AAPL's value in the next 15-20 years, not the next 15-20 days.
"Own it, don't trade it." Such a simple and sensible point which is lost on so many.
A couple years ago when iPad sales starts declining, Cook was asked by the analysts. He gave almost identical answers like this time. He is an operator like all other Apple CEOs besides Steve Jobs. He abandoned many legacies of Jobs. The most important one is keep Apple product development ultra secret.
Cramer has advised, "don't trade apple, own it!". If you did that for the last year or more you got crushed by the index and literally held the worst dow 30 stock you could buy. Any of the other 29 Dow stocks did better. Thanks Cramer.
Cramer was also saying "Own it, don't trade it" back in 2012. That year, it went from like $380 to $640 to $520 to $705 before beginning its 9 month journey back to $380, and it took another 18 months or so to claw back to the 2012 high. Now it's sitting around $640 again and is poised to go lower.
I don't understand why anybody wants to be short apple or be long the stock. This easily falls into the too hard bucket. Plenty of other easier stocks and sectors out there right now to make money in. Apple, like it or not, is plagued with uncertainty and a seeming hate from Wall Street traders and investors.
The psychology is bizarre. 99 times out of 100, Apple will be trading at the stroke of 4 AM in the pre-market. No other stock does that. The only time to take a chance on Apple is when it's crashed at least 40% from its high. Otherwise, it's a trading stock at best. That's going by the last 5 years of its behavior. I would look at it in the low 80s; maybe then it would a no-brainer again.
The facts are that Apple revenue and profit is in decline YOY. Bulls and bears both acknowledge this as fact. Next fact is apple guidance for next quarter is also a decline YOY. When a company is in decline investors and traders believe that growth is over for Apple. Now everyone wonders how far will the decline be. Where will it stabilize? Will it be at revenue 10% lower? Will it be 50% lower when it stops? When it stops will it merely flatline and find a base with no growth at this lower level? Nobody knows the answer yet, not even Apple.
This brings uncertainty into the equation. The facts right now in front of everyone are that apple is no longer a growth company. It is a shrinking company with no idea where the decline ends.
Cramer has advised, "don't trade apple, own it!". If you did that for the last year or more you got crushed by the index and literally held the worst dow 30 stock you could buy. Any of the other 29 Dow stocks did better. Thanks Cramer.
Apple isn't going bankrupt anytime soon. We all know that. We do know Apple at 512B market cap IS the iPhone. If iPhone volume shrinks, margins or asp's shrink things will get worse for the revenue, profits and stock.
I don't understand why anybody wants to be short apple or be long the stock. This easily falls into the too hard bucket. Plenty of other easier stocks and sectors out there right now to make money in. Apple, like it or not, is plagued with uncertainty and a seeming hate from Wall Street traders and investors.
A very reasonable and sensible view. Here's why I'm long on AAPL (and Apple). First, innovation cannot be at all measured from Apple except in hindsight. They don't share roadmaps, pre-announce products, or even usually hint what they're working on. So one has to go based on history. The history of Apple over the last 20 years is that they enter markets periodically with innovative products (if not necessarily innovative technology) and a few times have completely disrupted incumbent players. We know that this happened both with Steve Jobs' leadership and also with the leadership of others within the company. Second, I don't believe Apple is in decline because YOY measurements are not appropriate here. If you look at the 2-3 year cycle of iPhone growth, 2015 was actually a huge outlier when current results are considered. This last quarter would have been a record quarter too if last year's Q1 wasn't such a huge increase versus its prior year. I don't believe this last quarter was the outlier, I see that last year was the outlier (in a good way) because it made this last quarter look "bad" because it didn't increase YOY.
Only time will tell if that view is correct. Will Apple's innovation end without Steve Jobs? Or did Steve Jobs perform his most important task of embedding the creation of great products within the culture of Apple? Who knows, but as Apple continues to add $10B+ each QUARTER to its cash reserves a sell off of AAPL for anyone holding it seems entirely premature. At $93 per share, it seems ridiculous to sell it versus buy it considering just the fact of how much profit Apple earns each quarter. When THAT trails off, maybe AAPL should see lower share price. Until then, that's just denying math.
There's nothing Tim Cook or anyone else is going to say that is going to convince short term traders of AAPL about anything. They're going to continue to be upset that Apple's fundamentals - revenue, profit, and growth cycles - are not sufficient to overcome the strange valuations of companies like Amazon and Google. Nothing is going to change that except if the market raises the price of AAPL.
However, it's not Apple that has changed. It has never talked about unannounced products. It has never released a new product category that didn't get slammed in the media as non-innovative. This whole assertion that Apple has lost its ability to innovate is a bit suspect, but whatever.
The best advice was Cramer's last line. Own it, don't trade it. I guess I'm lucky because I care about AAPL's value in the next 15-20 years, not the next 15-20 days.
Oh please - the vast majority of experienced investors posting about the stock price are NOT looking at a 15 - 20 day time period. That is a superficial and condescending line on your part.
How about a look at the 5 years that Cook has been CEO? What is happening to Apple now that Cook has run out of Steve's ideas? When he surrounds himself with dead weight execs like Eddy and Angela he will sink - and sinking he is.
Long time reader, but never posted until now. Frankly, I don't care whether Apple made tens or hundreds of billions of profit. What I care about are the products that I need to use in my life each day. And I've had growing frustration for a while now that despite the "who cares how many" billions they are constantly raking in, they seem to be having competitors across the board catching up, and at times overtaking. I used to have absolute confidence that just buying the Apple version of whatever the product was gave me an acceptable balance of value and utility and it saved a lot of time because I didn't really need to worry about everything else on the market.
I love that over previous years I could always rely on Apple and have a set level of confidence and expectation for any of their products I bought. But in recent years I've started questioning the value proposition which really annoys me that I have to do that.
For example, I am wanting to upgrade my work computer and have the budget for a Mac Pro but would even settle for an iMac with decent gpu performance but from what I've read the latest ones seem to be a bit underpowered still. But why would I spend the same amount of money I could buy a brand new small car with on tech that is years old now (i.e. Mac Pro). I considered upgrading my MacBook Pro instead and getting a new monitor because after having retina screens everywhere else the Thunderbolt display I've got looks pretty ordinary. Although I paid AUD$999 for it a number of years ago, the exact same display is the only option from Apple still (and considerably outdated) but is now $1599 here in Australia. But at least it has free shipping I suppose You know what - if Apple want to keep selling old technology then at least reduce the price to compensate and retain some semblance of value.
So now instead of just hitting buy on the Apple website I've considered a Windows PC highly spec'd to be similar as the Mac Pro but frustratingly I just don't even want to head down that path. However I fear that if Apple keeps going down their current path at some point it's going to force my hand. All my devices are Apple at this point and for my family members as well and anyone else I could convince in the past. If it comes to it then once I leave the eco-system I suspect it will be quick and thorough. Just don't want to get to that point though, and really hope Apple have something worth buying for my day job upgrade before our fin year ends June 30th. And I no longer recommend Apple anymore - I used to unhesitatingly. Now it's "look, I have chosen to use this, but I'm not suggesting anything - go do your own research because you are going to have to find what represents good value to you and for many Apple doesn't". Surely I'm not the only one in this boat. And surely that represents a long term problem for Apple. I've found the value of an Apple product is really evident when you own all the other Apple products and having them work as well as can be expected together. But just as the halo effect has grabbed new customers in the past, when it starts hitting in more numbers then the reverse is going to be true as well - people won't just leave one device - they will start questioning all of their devices and probably pretty quickly end up with few to no Apple devices at all. That to me would be more worrying if I was a shareholder than the quarterly fluctuations.
problem is that no one can come up with a specific person to lead a company as unique as Apple
Who is he and what does he know about running a technology company? Sad that John Gruber had to link to it and give him traffic.
I'm glad Gruber did, though, especially since Lefsetz doesn't get ad money or employer props, etc.
Such a messed-up argument and a messy mind, and so full of his fucking self. I suspect too much of the usual alterants on top of a narcissistic personality, such as you find a lot of in the music biz. If you took out the five kinds of metaphors he keeps repeating, the music industry, basketball, bands, singers, etc., the piece could be half as long.
More like Steve Ballmer or Marissa Mayer of Apple...
So Steve Jobs hired a dud? People seem to forget it was his choice to have Tim lead Apple. I think I will trust his judgment over those sniping from the sidelines.
Carl Icahn dumped all 46 mil of his shares of Apple stock in a down market. His reading of the tea leaves must see it getting nothing but worse.
Maybe in a down market, or maybe months ago. All we know is that Icahn sold his shares sometime between Jan 2 and last week when he made his announcement. In two weeks he will submit a filing which shows his holdings on Mar 31. That will narrow the timeframe a little.
jonl said: Cramer was also saying "Own it, don't trade it" back in 2012. That year, it went from like $380 to $640 to $520 to $705 before beginning its 9 month journey back to $380, and it took another 18 months or so to claw back to the 2012 high. Now it's sitting around $640 again and is poised to go lower.
I think you are over-simplifying. The stock is down, but the reality is that this situation has been priced in for years; why do you think their PE is so bad?!
We are now in a period where it is obvious AAPL should not dominate your portfolio. I would love for the buy backs to stop and to focus on a 5% dividend, so I can look at it like the income stock it is.
The other thing to think about is what COMPANY is a better investment than Apple. There are many stocks, but when the bubble bursts AMZN has a lot farther to fall.
There's nothing Tim Cook or anyone else is going to say that is going to convince short term traders of AAPL about anything. They're going to continue to be upset that Apple's fundamentals - revenue, profit, and growth cycles - are not sufficient to overcome the strange valuations of companies like Amazon and Google. Nothing is going to change that except if the market raises the price of AAPL.
However, it's not Apple that has changed. It has never talked about unannounced products. It has never released a new product category that didn't get slammed in the media as non-innovative. This whole assertion that Apple has lost its ability to innovate is a bit suspect, but whatever.
The best advice was Cramer's last line. Own it, don't trade it. I guess I'm lucky because I care about AAPL's value in the next 15-20 years, not the next 15-20 days.
Oh please - the vast majority of experienced investors posting about the stock price are NOT looking at a 15 - 20 day time period. That is a superficial and condescending line on your part.
How about a look at the 5 years that Cook has been CEO? What is happening to Apple now that Cook has run out of Steve's ideas? When he surrounds himself with dead weight execs like Eddy and Angela he will sink - and sinking he is.
---
Seems that the last thing you are doing IS looking at the last five years with Cook as the CEO. Since he took over there's been over $100 billion of annual revenue growth and about a doubling of annual profits. And that was on top of a business that had already climbed to astronomic levels. Show me another mega cap business that has increased as much in percentage terms over the last five years as Apple. And in doing so, try not to confuse the businesses with their stocks; Cook runs the business, the market manipulates the stock, more than any other. Could Cook provide a better narrative for the stock? Maybe, but I doubt it. The street is hell bent on seeing the negative around this one company, unlike any other. It's been that way since the PC wars. It likely won't change anytime soon.
As to the lastest results, I was glad to hear Cook put forth the two-year argument. It just makes no sense for the market to punish a company for having an outsized year or setting future expectations based on what is obviously an outlier year.
Imagine Disney came out with Galaxy Wars (something even bigger than Star Wars) and every single person on Earth between the ages of three and 57 went to see it in the theaters. Would Wall St decide that this is the new norm and expect Disney to top it the next year? Then act surprised when they didn't! No sense at all.
Great interview, and not just for Apple investors for for other CEOs and business leaders globally. Apple is a great company and has never stopped being a great company.
The BIG banks and fund managers know this and play the market accordingly.
There's nothing Tim Cook or anyone else is going to say that is going to convince short term traders of AAPL about anything. They're going to continue to be upset that Apple's fundamentals - revenue, profit, and growth cycles - are not sufficient to overcome the strange valuations of companies like Amazon and Google. Nothing is going to change that except if the market raises the price of AAPL.
However, it's not Apple that has changed. It has never talked about unannounced products. It has never released a new product category that didn't get slammed in the media as non-innovative. This whole assertion that Apple has lost its ability to innovate is a bit suspect, but whatever.
The best advice was Cramer's last line. Own it, don't trade it. I guess I'm lucky because I care about AAPL's value in the next 15-20 years, not the next 15-20 days.
Oh please - the vast majority of experienced investors posting about the stock price are NOT looking at a 15 - 20 day time period. That is a superficial and condescending line on your part.
How about a look at the 5 years that Cook has been CEO? What is happening to Apple now that Cook has run out of Steve's ideas? When he surrounds himself with dead weight execs like Eddy and Angela he will sink - and sinking he is.
If "sinking" is generating $10B per quarter in profits, then I'm perfectly happy to be on that ship. I'm not exactly sure what the profile of an "investor" is, considering that multitude of people and institutions that invest. To suggest there's a right way to invest is ludicrous on its face, considering there are always up and down cycles for even the "best".
As for your critique of Apple execs, you have a single challenge. Names. Give people NAMES to replace them. And not that crap of "Elon Musk should become the CEO of Apple." Who exactly should run its global subscription business? Eddy Cue has negotiated the biggest global licensing businesses for 10+ years running. Who's got a better track record? Angela Arhendts for retail? Tell me who has a better experience and history running a boutique retail business? Happy to listen, considering you've thrown those two examples out there. But you're just another anonymous armchair quarterback who likes to throw feces around without any substance. I'll take the team generating real revenue and real profits, thanks.
... So now instead of just hitting buy on the Apple website I've considered a Windows PC highly spec'd to be similar as the Mac Pro but frustratingly I just don't even want to head down that path. However I fear that if Apple keeps going down their current path at some point it's going to force my hand. ...
Go luck with the PC path. Mac users know the difference. That is why Macs are gaining market shares as PCs decline.
The future of computing lies in iPads, iPhones, iCloud, Apple Watches and the like, equipped with SIRI, Touch ID, VR cameras and advanced operating systems.
Comments
When a company is in decline investors and traders believe that growth is over for Apple. Now everyone wonders how far will the decline be. Where will it stabilize? Will it be at revenue 10% lower? Will it be 50% lower when it stops? When it stops will it merely flatline and find a base with no growth at this lower level? Nobody knows the answer yet, not even Apple.
This brings uncertainty into the equation. The facts right now in front of everyone are that apple is no longer a growth company. It is a shrinking company with no idea where the decline ends.
Cramer has advised, "don't trade apple, own it!". If you did that for the last year or more you got crushed by the index and literally held the worst dow 30 stock you could buy. Any of the other 29 Dow stocks did better. Thanks Cramer.
Apple isn't going bankrupt anytime soon. We all know that. We do know Apple at 512B market cap IS the iPhone. If iPhone volume shrinks, margins or asp's shrink things will get worse for the revenue, profits and stock.
I don't understand why anybody wants to be short apple or be long the stock. This easily falls into the too hard bucket. Plenty of other easier stocks and sectors out there right now to make money in. Apple, like it or not, is plagued with uncertainty and a seeming hate from Wall Street traders and investors.
The psychology is bizarre. 99 times out of 100, Apple will be trading at the stroke of 4 AM in the pre-market. No other stock does that. The only time to take a chance on Apple is when it's crashed at least 40% from its high. Otherwise, it's a trading stock at best. That's going by the last 5 years of its behavior. I would look at it in the low 80s; maybe then it would a no-brainer again.
Only time will tell if that view is correct. Will Apple's innovation end without Steve Jobs? Or did Steve Jobs perform his most important task of embedding the creation of great products within the culture of Apple? Who knows, but as Apple continues to add $10B+ each QUARTER to its cash reserves a sell off of AAPL for anyone holding it seems entirely premature. At $93 per share, it seems ridiculous to sell it versus buy it considering just the fact of how much profit Apple earns each quarter. When THAT trails off, maybe AAPL should see lower share price. Until then, that's just denying math.
How about a look at the 5 years that Cook has been CEO? What is happening to Apple now that Cook has run out of Steve's ideas? When he surrounds himself with dead weight execs like Eddy and Angela he will sink - and sinking he is.
More like Steve Ballmer or Marissa Mayer of Apple...
And YHOO investors can only wish Marissa had been as effective WRT Yahoo core as Tim has been with iPhone.
I love that over previous years I could always rely on Apple and have a set level of confidence and expectation for any of their products I bought. But in recent years I've started questioning the value proposition which really annoys me that I have to do that.
For example, I am wanting to upgrade my work computer and have the budget for a Mac Pro but would even settle for an iMac with decent gpu performance but from what I've read the latest ones seem to be a bit underpowered still. But why would I spend the same amount of money I could buy a brand new small car with on tech that is years old now (i.e. Mac Pro). I considered upgrading my MacBook Pro instead and getting a new monitor because after having retina screens everywhere else the Thunderbolt display I've got looks pretty ordinary. Although I paid AUD$999 for it a number of years ago, the exact same display is the only option from Apple still (and considerably outdated) but is now $1599 here in Australia. But at least it has free shipping I suppose
So now instead of just hitting buy on the Apple website I've considered a Windows PC highly spec'd to be similar as the Mac Pro but frustratingly I just don't even want to head down that path. However I fear that if Apple keeps going down their current path at some point it's going to force my hand. All my devices are Apple at this point and for my family members as well and anyone else I could convince in the past. If it comes to it then once I leave the eco-system I suspect it will be quick and thorough. Just don't want to get to that point though, and really hope Apple have something worth buying for my day job upgrade before our fin year ends June 30th. And I no longer recommend Apple anymore - I used to unhesitatingly. Now it's "look, I have chosen to use this, but I'm not suggesting anything - go do your own research because you are going to have to find what represents good value to you and for many Apple doesn't". Surely I'm not the only one in this boat. And surely that represents a long term problem for Apple. I've found the value of an Apple product is really evident when you own all the other Apple products and having them work as well as can be expected together. But just as the halo effect has grabbed new customers in the past, when it starts hitting in more numbers then the reverse is going to be true as well - people won't just leave one device - they will start questioning all of their devices and probably pretty quickly end up with few to no Apple devices at all. That to me would be more worrying if I was a shareholder than the quarterly fluctuations.
Such a messed-up argument and a messy mind, and so full of his fucking self. I suspect too much of the usual alterants on top of a narcissistic personality, such as you find a lot of in the music biz. If you took out the five kinds of metaphors he keeps repeating, the music industry, basketball, bands, singers, etc., the piece could be half as long.
But not a bit more convincing. He's full of it.
We are now in a period where it is obvious AAPL should not dominate your portfolio. I would love for the buy backs to stop and to focus on a 5% dividend, so I can look at it like the income stock it is.
The other thing to think about is what COMPANY is a better investment than Apple. There are many stocks, but when the bubble bursts AMZN has a lot farther to fall.
How about a look at the 5 years that Cook has been CEO? What is happening to Apple now that Cook has run out of Steve's ideas? When he surrounds himself with dead weight execs like Eddy and Angela he will sink - and sinking he is.
---
Seems that the last thing you are doing IS looking at the last five years with Cook as the CEO. Since he took over there's been over $100 billion of annual revenue growth and about a doubling of annual profits. And that was on top of a business that had already climbed to astronomic levels. Show me another mega cap business that has increased as much in percentage terms over the last five years as Apple. And in doing so, try not to confuse the businesses with their stocks; Cook runs the business, the market manipulates the stock, more than any other. Could Cook provide a better narrative for the stock? Maybe, but I doubt it. The street is hell bent on seeing the negative around this one company, unlike any other. It's been that way since the PC wars. It likely won't change anytime soon.
As to the lastest results, I was glad to hear Cook put forth the two-year argument. It just makes no sense for the market to punish a company for having an outsized year or setting future expectations based on what is obviously an outlier year.
Apple is a great company and has never stopped being a great company.
The BIG banks and fund managers know this and play the market accordingly.
As for your critique of Apple execs, you have a single challenge. Names. Give people NAMES to replace them. And not that crap of "Elon Musk should become the CEO of Apple." Who exactly should run its global subscription business? Eddy Cue has negotiated the biggest global licensing businesses for 10+ years running. Who's got a better track record? Angela Arhendts for retail? Tell me who has a better experience and history running a boutique retail business? Happy to listen, considering you've thrown those two examples out there. But you're just another anonymous armchair quarterback who likes to throw feces around without any substance. I'll take the team generating real revenue and real profits, thanks.
Mac users know the difference. That is why Macs are gaining market shares as PCs decline.
The future of computing lies in iPads, iPhones, iCloud, Apple Watches and the like, equipped with SIRI, Touch ID, VR cameras and advanced operating systems.