sacto joe

charles1 said:

For Apple computer owners, the most horrifying website in existence is "What if I had bought Apple stock instead?" It lists the retail price of Mac computers when new, and the equivalent value of AAPL stock purchased with that money at that time. But it only goes back to 1997. It is horrifying enough to see that G3 I bought in 97 could have gotten me $300k in stock returns. But what about my OLDER computers, like my IIcx, Apple IIc, Apple IIe, etc? I would have been a damn millionaire. But instead, I am still paying on the student loan I used to buy that G3.

Sour grapes much?

I bought my first computer on credit (a Mac) in 1984 for over $3 K, including dot matrix printer. It had two programs (MacWrite and MacPaint), 512K of RAM, and required "disc swapping" to save files. Per your "analysis", I should have put it in AAPL instead - notwithstanding that 1984 Mac literally changed my family's lives to the positive, and I consider it my best investment ever.

Without that Mac, my wife would never have gotten into computer sales, would never have ended up working for several years at Apple, and would probably never have bought ANY AAPL. And that's just one person out of my family.

PS: I still own that 1984 Mac, and a ton of software for it. Wonder what that's worth today....

Aside from the guessing game about how many iPhones were sold, which is all these folks are left with now that Apple doesn’t inform them of the quarterly sales breakdown with this and other products, there’s the fact that market share is more and more a meaningless metric.The truly meaningful metric is installed base, which has been growing like Topsy for years and years.

(From Horace Deidu’s “The Pivot”) 

http://www.asymco.com/2019/05/16/the-pivot/

“The iPhone is the most successful product of all time. Over 1.6 billion have been sold. Including the iOS products it spun off, the total is over 2.2 billion. Of those 2.2 billion sold, 1.5 billion are still in use. There are about 1 billion iPhone users.”

Apple has not changed its direction since Steve Jobs was alive. Some of us have literally been saying Apple deserves a 30 P/E since the Great Recession. But it had AT LEAST 3 trips down to sub-10 P/E in that time, generally floating at an average P/E of about 14.

For those of us primarily invested in AAPL from that time who were also forced into retirement by the GR and thus had to liquidate shares to live, we absorbed a LOT of loss at those abysmal prices.

That all changed when Apple started using its massive cash position to buy back cheap AAPL stock. Why? Cumulatively, Apple bought back over 1/3 of its outstanding stock float from its peak back in 2013. And it paid an average price per share of an astonishing $150/share.

The result for the longer term investor was to see their percentage per share ownership of the company increase markedly. In essence, Apple "invested" in itself on behalf of its long term investors. It could have chosen to spend the buyback money on dividends. But dividends are taxed, while buybacks are not.

And there was another non-obvious impact: The percentage of long term investors versus short term market players has vastly increased largely due to the buybacks. You can see that if you look at the volumes traded before Apple started its buybacks versus lately. Now, that doesn't mean that there still isn't tremendous volatility in AAPL. But the day of the huge drops down to single digit P/E's are gone for good. There are just too many buy-and-hold investors that will refuse to panic out of AAPL. And thus stock manipulators can no longer easily push it over a cliff, like was done constantly in the bad old days.

Meanwhile, Apple continues to grow, huge company that it is. The fake "law of large  numbers" propaganda has been completely proven false in Apple's case.

Now, I have to honestly admit that this latest move towards finally fairly valuing AAPL has taken me by surprise, even though I long predicted that the worm would eventually turn. But a lot of that is down to the completely mishandled pandemic that has begun (yes, begun) stalking the world and this country. A company like Apple that has its moral values, has always stuck to its knitting, and is in the market niche it occupies, was pretty much destined to succeed fantastically in this environment, relatively speaking. But it was completely unpredictable that this administration and the Republicans that have gone to the wall enabling it would make such an incredible hash of protecting US citizens from that pandemic.

Sorry if that seems political, but it's simply fact.

mknelson said:

lkrupp said:

So this guy has a four year 'plan' to get AAPL to $2T? Then why isn't he already Apple's CFO? But remember, the Dutch East India Company was worth $7.9T in 1637 so Apple is just a shit-house gnat, right? When Apple hit $1T for the first time this factoid went viral in the usual attempt to downplay and denigrate Apple's accomplishment. Every Apple hater has the link to this drivel saved in their Notes apps.

A rather odd comedy-parison. AAPL's valuation is the share price x share value. The DEI valuation includes capital like ships, entire countries, slaves, so much pepper!

…So much pepper…

Valuation defined by market capitalization is Share Price X Share Count. Typo?

The issue of “market cap” is a red herring. A company (Microsoft, for example) can more easily grow market cap by NOT buying back shares. The comparative Price (per share)/Earnings (per share), or P/E ratio, gives this away. While both are large Companies, Apple has about twice the revenue of Microsoft, and a substantially larger EPS (earnings per share). This shows up as a substantially larger Microsoft  valuation, or P/E ratio.

The point being that market cap doesn’t reflect real comparative value, only the comparative value that the collective market, on any given day, chooses to assign a company’s stock. True value is a much squishier quantity, and has little to do with share count or where a company’s sales are in the midst of pandemics or race riots.

Which is why we can see AAPL at these near-all time highs in these fractious times: Investors are “betting” on Apple’s long term future, not its present struggles. Also, compared to many other businesses in these times, Apple is doing quite well at staying intact.

BTW, a lot of bad information in this thread today, along with a spattering of good information. DED’s article has the basics right on buybacks: Just like every other investor, Apple automatically gets more bang per buck when the share price drops.

Regarding buybacks, I made this comment on ped30.com a few days ago:

Below are some interesting numbers that I just calculated out of my master spreadsheet. They may seen unconnected, but I see a very deep and meaningful connection:

0.65 B
0.34 B
0.28 B
0.25 B
0.38 B
0.38 B

[These are] the approximate numbers of shares Apple has bought per fiscal year since they started their buybacks. Note that the first fiscal year, fy ‘14, was by far the biggest buyback. Also, note the major jump commencing in fy ‘18. The reason for that jump, simply put, was the repatriation of foreign-generated cash.

I submit that, with the pullback in stock prices, Apple’s buyback power is going to be supercharged. And the further the pullback, the more supercharged it’s going to be.

I’d further submit that few if any other companies in the world will be able to match Apple’s supercharger capacity and will to supercharge. Consequently, I view ANY economic slowdown short of a major world war as beneficial to long-term Apple shareholders.

Edit: For those who don’t understand the profound positive impact this has for long term stockholders, consider that buybacks in fact increase the percentage ownership of Apple for each remaining share. Thus, if you hold shares from before buybacks began, then when Apple buys back half it’s float, each share you still own will be worth twice the percentage ownership of Apple the company. Note that Apple has grown since buybacks started, so you effectively will own twice the shares in a larger, more profitable company. And furthermore, you didn’t have to pay any additional taxes to “acquire” those shares!

For my wife and I, being retired and elderly, Apple is essentially investing for us when our investing days are over. Pretty sweet!