gatorguy

GeorgeBMac said:

gatorguy said:

davidw said:

gatorguy said:

Xed said:

gatorguy said:

Xed said:

gatorguy said:

IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing. 

Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.

How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't. 

1. No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).

Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect. 

As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.

 And it's totally ignorant to say that buy backs are a total waste of money. 

We are both 100% in agreement on that point. It's also something no one in this thread claimed. Market experts do however disagree on the wisdom of buybacks. You mentioned Warren Buffett. Do you also know who Larry Fink is or the company he manages? 

"Larry Fink, who runs BlackRock, a huge money-management firm, has argued that buybacks are bad for companies and even bad for democracy. “Society is demanding that companies, both public and private, serve a social purpose,” he wrote.  “To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”

Harvard Business Review argues that open-market stock repurchases should be banned altogether:
https://hbr.org/2020/01/why-stock-buybacks-are-dangerous-for-the-economy

So what to do with these high levels of excessive cash lanquishing? When some of these companies claim they simply cannot afford to pay their employees more and stay profitable is it actually true, or the claim that US companies cannot afford to invest in plant and equipment for producing essential products in the US and thus must search out cheap manufacturing in countries with less respect for personal freedoms?
https://www.theatlantic.com/ideas/archive/2018/07/are-stock-buybacks-starving-the-economy/566387/


GeorgeBMac said:

Xed said:

gatorguy said:

Xed said:

gatorguy said:

Xed said:

gatorguy said:

IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing. 

Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.

How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't. 

1. No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).

Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect. 

As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.

Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.

The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?

The answer is capitalism:   Companies like Apple use capital to produce products and services.  That's what capitalism is.  Giving away that capital detracts from their purpose as a company -- and the future of that company. 

The scary part is that this is a capitalist company who is declaring that they have no productive use for capital.  As a capitalist nation we have put our faith and our future in their ability to productively use capital.  But, with every dollar of stock buybacks they are saying that they are failing at their job of allocating capital in productive ways.

In the early 1980's the U.S. Steel companies did the similar:  They were operating mills using 100 year old technology.  Japan stepped in with their modern technology and started selling better steel at lower prices.   Did the U.S. Steel companies use their piles of capital to upgrade their mills so they could compete?   No, they invested in things like Marathon Oil.  My own steel company bought a drug distribution business.  The result was the demise of the U.S. Steel industry -- which we, of course, blamed on Japan.

But they at least invested their capital in what they believed was a good investment.  Stock buybacks are not investments, they are give-aways.  But, like those steel companies are saying:  "My business, my corporation, is a bad investment".

George, everyone once in awhile you drop jewels in amongst the trash. 

I would say the same.  Occasionally you make sense..

...... You can't work people to death with slave wages.  But neither can you pay them so much the business becomes uncompetitive.

Um, yeah obviously. See your mention of things averaging themselves out in an economy, barring artificially-created constraints perhaps requiring political changes. Keeping a firm thumb on a society won't survive in the long-haul. 

But the current social giveaways in the US for example are introducing a level of inflation not seen in a while, and if unchecked will eventually negate many of the benefits of increased average consumer financial resources.  Putting more money in your pocket is not the simple endgame answer. IMO we need to seize back some of our own manufacturing prowess, particularly for essential services and products. Don't be dependent on the whims of another. Renew and rebuild our factories left in disrepair or abandonment, install new and more efficient equipment without resorting to near slave-level wages to run it as some Asian countries have decided is most helpful to their society's economics (as tho they asked).  Recreating the infrastructure and educational systems to go along with it ensures the wages will continue to outpace the eating away from inflation for a very long time. It's a multi-faceted process that simply moving money from one wealthy overflowing bank account to another hoarding it doesn't assist at all. "Working capital" is more than a phrase, and can take many forms. Investing in your own society is one of them. 

IMO no one should be forced to work just to survive, we should be past that. People often don't have the choice of where to live or the circumstances surrounding it. .But there need to be obvious advantages to making the extra effort, pushing when your mind and body are telling you not to, and a few thousand people hoarding the majority of the wealth with sticky grimy hands unless you are serving their selfish purposes ain't it. I've been around a few decades now and see with my own eyes and experience that being a business success today is not as easy as "anyone can put in the hard work and do it" as it used to be. 

BTW, your pushing of people's buttons for no reason other than imaginary winning isn't helpful or informative at all. Perhaps consider retiring the frequent and more often than not dishonest "hater/Trumper'' tag you put on people meant to only get a rise out of them. It's just as unseemly as another here who often falls back on "liar!", both of you perhaps not realizing it reflects poorly on the forum and our members in general. You know exactly what I'm referring to, 'nuff said. 

If we can't have at least begrudgingly courteous discussions we shouldn't take part in them at all. 

davidw said:

gatorguy said:

Xed said:

gatorguy said:

Xed said:

gatorguy said:

IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing. 

Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.

How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't. 

1. No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).

Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect. 

As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.

 And it's totally ignorant to say that buy backs are a total waste of money. 

We are both 100% in agreement on that point. It's also something no one in this thread claimed. Market experts do however disagree on the wisdom of buybacks. You mentioned Warren Buffett. Do you also know who Larry Fink is or the company he manages? 

"Larry Fink, who runs BlackRock, a huge money-management firm, has argued that buybacks are bad for companies and even bad for democracy. “Society is demanding that companies, both public and private, serve a social purpose,” he wrote.  “To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”

Harvard Business Review argues that open-market stock repurchases should be banned altogether:
https://hbr.org/2020/01/why-stock-buybacks-are-dangerous-for-the-economy

So what to do with these high levels of excessive cash lanquishing? When some of these companies claim they simply cannot afford to pay their employees more and stay profitable is it actually true, or the claim that US companies cannot afford to invest in plant and equipment for producing essential products in the US and thus must search out cheap manufacturing in countries with less respect for personal freedoms?
https://www.theatlantic.com/ideas/archive/2018/07/are-stock-buybacks-starving-the-economy/566387/


GeorgeBMac said:

Xed said:

gatorguy said:

Xed said:

gatorguy said:

Xed said:

gatorguy said:

IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing. 

Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.

How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't. 

1. No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).

Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect. 

As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.

Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.

The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?

The answer is capitalism:   Companies like Apple use capital to produce products and services.  That's what capitalism is.  Giving away that capital detracts from their purpose as a company -- and the future of that company. 

The scary part is that this is a capitalist company who is declaring that they have no productive use for capital.  As a capitalist nation we have put our faith and our future in their ability to productively use capital.  But, with every dollar of stock buybacks they are saying that they are failing at their job of allocating capital in productive ways.

In the early 1980's the U.S. Steel companies did the similar:  They were operating mills using 100 year old technology.  Japan stepped in with their modern technology and started selling better steel at lower prices.   Did the U.S. Steel companies use their piles of capital to upgrade their mills so they could compete?   No, they invested in things like Marathon Oil.  My own steel company bought a drug distribution business.  The result was the demise of the U.S. Steel industry -- which we, of course, blamed on Japan.

But they at least invested their capital in what they believed was a good investment.  Stock buybacks are not investments, they are give-aways.  But, like those steel companies are saying:  "My business, my corporation, is a bad investment".

George, everyone once in awhile you drop jewels in amongst the trash. 

Xed said:

gatorguy said:

IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing. 

Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.

How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't. 

ArchStanton said:

gatorguy said:

StrangeDays said:

gatorguy said:

Alex_V said:

I agree with all the comments so far. I had an exchange with a guy on FB over this issue. (There is irony there, I acknowledge.) He was talking up Google’s recent privacy changes, as if to say that they were the same as Apple’s. I pointed out that they stopped third parties from snooping, but Google can still snoop. I asked him: Google doesn’t make money selling phones, and they provide Android for free. Why would they do that? How do they make money? The answer is: they sell data on their users. The guy responded that he knew that because he was in marketing. So, why was he arguing about it on the internet?

Your friend lied.
Google doesn't sell user data. 

Selling targeted advertising access to sub-categories of users based on user data, is exactly what is meant when people say “sell your data”. They’re selling access to your metadata. Your little semantic games will never change that and just leave you looking intellectually dishonest. 

It's more YOUR little semantics game, and a very misleading one played by a few others. There's no advertiser access to user data, especially not YOUR OWN personal data. 
User data is not for sale, tho there are companies that do, even ones you inherently trust (perhaps because you don't know any better?)

Google places ads for companies based on baskets of ANONYMISED USERS WITH SIMILAR DEMOGRAPHICS in much the same way Apple creates baskets of users for delivering targeted ads in certain Apple services. Baby steps. You know why Apple treats that as OK to do? Because they aren't selling that data or even giving it away, and neither is Google. The intellectual dishonesty is pretending they do.

Is maintaining a talking point so important to you that using half-truths to do so is acceptable? Don't work that FUD. Be better than that. 

"In much the same way Apple does". And you accuse others of using half truths? Using the standard lie of 'see they all do it' to confuse the issue. It's becoming a time honored obfuscation for the Android crowd. 

The difference between what private information Google(and Facebook) collect on you(personally you not an obscure group) and what Apple collects on you is massive, and I mean MASSIVE! Anything Gatorguy says from this point will not factually contradict that, period, end of story.  He's trying the bait and switch with 'who gets to see that personal information'. Then using that to push ''see, they all do it' equivocation. It's used by the Android crowd time and time and time again -- and it's dishonest.
but they have to do that. The issue of privacy data mining is not just won by Apple, Apple wins it running away by 100 miles. That's not the simple claim of an Apple user, that is verifiable, quantifiable, indisputable fact. Everything they try to push from here will be to obscure that 100% fact.

But to play the obfuscation game: who gets to see the massive private information of a user on an Android platform and the minimal information that Apple collects? For both platforms it is negotiable via ToS updates(especially using gray area wording in the ToS. Don't ever believe that a company (Google, Facebook, even Apple) may not change their policy. They will.  For Google (and Facebook... among others) whose main income of 100 to 200 billion dollars per year in "advertising" revenue, this huge number is achieved by knowing as much about you as possible. I can almost guarantee there will be changes to ToS especially if these many billions in revenue start going south. 

It's free and relatively say to do: get a copy of the private data recorded by Google, by Facebook, by Apple. See the truth for yourself. Just be prepared to be shocked at how big the file and how huge the private information Google and Facebook have recorded on you (again this is fact, nothing Gatorguy or the others trying to cloud the issue can honestly dispute). 

Oh, Google places far more emphasis on maximizing the value of their advertising services than Apple does. Why wouldn't they? That is absolutely not the same as "selling your data". They don't. "They all do it" is not the point at all.

At the same time Apple is making sure to keep their fingers in advertising and if a time comes that hardware isn't delivering the revenue gains they want don't' believe they won't make ads a much bigger piece of their business. While iAd failed, and they will probably never be as good at it as Google anyway, Apple never has given up on testing the targeted ad waters. There's so much money there, why would they? Apple can see how successful Alphabet is, all they have to do is look at recent results. MASSIVE gains YOY. I'd be shocked (and so would you IMHO) if they wouldn't like a bigger piece of it, just as Google wants a bigger piece of hardware. 

Alex_V said:

gatorguy said:

It's more YOUR little semantics game, and a very misleading one played by a few others. There's no advertiser access to user data, especially not YOUR OWN personal data. 

User data is not for sale, tho there are companies that do, even ones you inherently trust (perhaps because you don't know any better?)

Google places ads for companies based on baskets of ANONYMISED USERS WITH SIMILAR DEMOGRAPHICS in much the same way Apple creates baskets of users for delivering targeted ads in certain Apple services. Baby steps. You know why Apple treats that as OK to do? Because they aren't selling that data or even giving it away, and neither is Google. The intellectual dishonesty is pretending they do.

Is maintaining a talking point so important to you that using half-truths to do so is acceptable? Don't work that FUD. Be better than that. 

Whatever. Google snoops on us. They monitor us online, they scan our emails, etc. They want to know as much as they can about each of us to build up a detailed psychographic profile of us: Demography, socio-economic status, political beliefs, sexuality, etc. Etc.  In the long run, like the NSA, they want to know everything about everyone. Google then sells that knowledge to advertisers. I’m not so comforted that it is anonymous. Because Google knows. Plus, they did this surreptitiously, without informing us. Apple's big offence was to insist that we are informed. 

As far as I know, the only adverts that Apple presents to me are on the App Store. When I search for a word processor, it says: “Here’s another word processor, have a look.”

Scanning emails for ads? Nope, not in years.
Political beliefs? Google doesn't permit ads based on that, nor allow collection of data related to it.
Sexuality? Nope, another category that Google does not allow. 

You're also not all that familiar with Apple's ad platform, so the link to that is here:
https://support.apple.com/en-us/HT205223

If you do more reading and research and less assumption you'd not be so misinformed.