In ‘The Intelligent Investor,’ Graham begs a rather satirical question that goes something like, do you plan on being alive in 25 years? If so, stop-loss at your comfort level then buy back the fear. If not, stop-loss at your comfort level then sell 6 month calls.
Apple is a hollow shell waiting to implode. Apple is centered around the US market to a degree that should be frightening. Here in europe telcom providers start to phase out their apple product packages for private consumers. In phone stores iphones rust away in some dark corner, hoping for some bobo to casually stroll by and buy it. Macs never really sold anywhere outside the US and MP3 players are a dying breed with the advent of spotify and the like. Chine was a market for apple once but HTC pushes them out more and more. Even if apple keeps its US market share, which I believe is unlikely, it is still leaking profits everywhere. Then there is also the ireland tax haven where they parked their cash never to return. If they dont come up with a stylish cure for cancer soon they will go down gloriously. Everyone who denies that is either gullible or outright stupid.
Overconfidence bias at its best. Do you know who the people most confident in their abilities are? I’ll give you a hint: it is rooted in a coping mechanism. You basically say that AAPL will implode for certain. Talk about setting your confidence intervals too narrow.
I was negative on AAPL for a long time, as evidenced by previous posts. Tell me, how do you think this stock trades?
To be precise, I said that IF apple does not come up with the next big thing, I do not see reason for this company to further make profits. Sorry if I formulated it that harshly and offended you, but let us be reasonable. An innvoative company can only be recognized as such as long as it continues to deliver new ideas and new products. As you yourself mentioned apple has disappointed in that matter for numerous years now while pumping loads and loads of money into R&D. If in 4 years we talk about the impact of the iPhone 8 on apples share price, apple wont be the most valuable company in the world anymore. I dont see how smartwatches are the next big thing (although I am no tech geek and was wrong about tech trends before). Even if smartwatches, smartglasses, etc are well received by customers, there are already competitors in the field with substitute products.
A great drawback of apple is that most of its big sellers were clever redesigns of existing products and thus far apple never came up with a proprietary product idea. That and the huge amounts dumped in R&D with no results signal to me they either burn a lot of cash in developing follow-ups for their existing products and questionable red ocean products or are inefficiently working on a breathtaking innovation that continues to devour cash. The latter seems unlikely, because we would have heard something about such a project. The former is a really bad sign, because if they need ever more cash every year to come up with a marginally altered version of the iPhone 4 somewhere something is going terribly wrong.
Furthermore, as I said, international market positions are eroding in the consumer branch. I am not exaggerating when I say no one buys iPhones in Europe anymore. Its Samsungs territory - period. A 16-year old can close a phone contract today and get a free S5 or can pay an extra 70 bucks for the inferior and uncool iPhone. Who do you think builds a stronger customer relationship. Macs never really sold here and the Mac store booths in large electronic stores arent even manned with apple staff anymore. Macbooks are surrounded on shelfs by acers and lenovos, offering an equal performance to the average user at half the price. 2 years ago you could get 4 different mac-related magazines in every large grocery store, now you have to be lucky to find even a single one. However, from what I have heard from friends in telcom apple pushes hard to sell iPhones as company phones for larger customers, maybe thats how they hold their ground, but from a cost perspective I guess they will loose that segment to Samsung too.
If we put my everyday observations aside and look at the data, the picture definitely is different, but that is what makes it fishy. I wont say we have the next Enron in the making, but I cannot for the love of me tell where apple is making its money. revenue and ni have trippled over the past 3 years. proft margins decline, but not by much. PE at 15 may be on the high side, but wouldnt bother me either. PBV is increasing which bothers me the most combined with the increase in leverage. my opinion is that the current hike in share prices is partly caused by the recent split and the incoming traffic from smaller investors, but that also brings the risk of making the share price more noisy and bigger corrections might be ahead. What in the end matters to me is that I am not able to discern where apple is outperforming its peers with its mediocre product development and lack of innovation. Maybe they are just good at selling, maybe all their value is in their marketing and sales force, but then again, if I want to invest in a tech company I would be better off elsewhere.
I do not invest in apple, because I do not fully understand what is going on and why they prosper and unless you know the answer to those questions I would advise against investing in apple in any manner.
Fair enough. On the corporate governance side, Samsung should really be ashamed of itself. I mean, here you have one of the biggest companies in the world and the controlling ownership of the company is subject to constant familial infighting, tax fraud and intrigue. On the plus side, they may need to declare a dividend (Korea is not big on that) for generational transfer tax purposes. If they do then maybe some of the other companies in Korea will follow their lead.
@I_am_the_highway, AAPL doesn’t need the next best thing right away. Think about its products from a designers perspective - they’re all basically blank slates with fundamentally sound features that only can improve. AAPL is smart - they let competition put out all the bells and whistles. Then they kick back, watch, study, pay attention, then make moves. In the meantime AAPL product users find novel ways to interact with their product through its lifetime. I attribute that to idk, the fact that where I live it’s usually focused, productive people who use AAPL products (and can afford them). So theres a psychological component to it’s product evolution, too. One that the end-user takes upon themselves. For example, AAPL’s automator tool-kit. My Mac is rigged to wake me up each morning to music, open all my recent unfinished documents, reminders, tasks, and calender and finally Notes with the speech-function enabled so that I could jot down some mental fog notes while I dress. That in itself yields a future value. My iPhone has become a pen/pencil/notepad and pretty much personal data recorder. All that’s left is installing it as an artificial organ…cuz my thumbs are tiring…
Also, could I ask a question? What’s HTC’s presence in China all about? Do Chinese associate HTC to anything beside say a smart phone that other people have?
Sorry I was referring to Huawei, not HTC. Huawei does well for many reasons, one it being backed by the Chinese gov and also being closer to the end customer. Since the technology gap from apple phones to other brands has ceased to exist, there is no reason for a customer to prefer apple over its comps other than brand name.
http://www.iimedia.cn/36765.html
Your good personal experience biases your view. In the US, I agree, apple caters to tech savy creative people, but in Europe, Russia and China (the largest markets with demand for luxury products) apple sells its stuff to hipsters and pretentious nobends. Apple’s target clientele (the creative webdesigner with large disposable income) does not exist outside the US and even if they exist they often harbor socialist ressentments, therby shunning large corps such as apple.
Your argument about end users discovering new uses for the product is flawed. That’s the same as saying the end users of Toyota cars need to find the deficient brakes and work their own way around it. That is not innovation, that’s just a cheap and lazy cop out.
^ You are so clueless it’s entertaining. Apple has never been about a “technology gap”. Apple succeeds because it has the best hardware design, the best software design, the best ecosystem, a very loyal fanbase, and the more prestigious brand. It is a high end brand, and people who can afford an iPhone usually prefer one over android, and the end result is that even if Apple does not sell the majority of phones, it comes close to the majority of profits.
I could say this to you nicely, but since youre a newbie here and a budding troll. Suffice it to say that you’re an idiot.
you were begging for the kool aid, werent you?
Palantir, how do you define ‘technology gap’?
The void between his thighs?
I must agree with Highways points about Europe, Apple is seen in a completely different light to the US. Only pretentious idiots and actual designers buy macs here.
I am the highway . Palantir smashed you son
Would any of you buy Apple shares at these levels? I am debating about it…
As outlined in an earlier post, I am a seller
buy - short run (up to 6 months)
hold - medium (up to one year)
no action - long run (everything beyond 1.5 years)
with all analysts issuing buy recommendations across the board, the price can hardly go down in the very short run. after that it’s a wild guess…
today I saw this sell recommendation with target price 56 and thought to myself, I dont want to be in this guy’s shoes, given the feces appleboys fling at you in this forum for desacrating their idol.
—INFORMATION PROVIDED ABOVE IS ONLY MY OPINION. I DO NOT ACTIVELY COVER APPLE, NOR DO I OWN IT. PLEASE PERFORM YOUR OWN DUE DILIGENCE BEFORE ARRIVING AT YOUR INVESTMENT DECISION—
I’ve only read the first two paragraphs.
You’re an idiot. Apple isn’t going anywhere anytime soon. It’s one of those too big to fail companies. Unless another company can compete for AAPL’s market share through something outside the smartphone industry, then you have no argument. Even then, Apple is more than just an iPhone, it’s one of the best compaines in the world. It will keep breaking the benchmark and raising the bar in consumer technology for generations to come. The brand alone makes half of the stock’s price.
I have only read your first sentence and decided to ignore the rest.
Looks like IBM is ignoring all your sentences while you bleat on AF.
lets make it easy then, 6 months from now you enter into a fresh long and I enter a short. 5 years from now we close positions and compare