Apple Again The Second Most Valuable Publicly Traded Company in the World

[ani4ani]

Originally Posted by radicalcentrist

It's freaking killing me that I bought at $605. I'm not selling (this is a long-term investment), but it's a little soul-crushing watching the stock keep dropping. It'll come back up, though, but it's hard to take right now.

Always find it interesting the emotional attachment to a stock. If it is falling and you are sure it will come back [which you surely do believe as your holding on to them?] , then sell them and buy them back?

[MacFather]

[Chupa Chupa]

Originally Posted by 1080p

Lulz... buy now and watch your money grow when Apple puts out a Siri powered TV.

The world isn't craving for a Siri powered TV. It's looking for one powered by content that doesn't melt your brain after 1 minute of watching insipid and cliched shows and movies. Without content who needs a TV?

[Oletros]

Does it mind if it is the first, second or fifth most valuable company?

[singularitie]

Originally Posted by SuperMatt

The "smartest people in the world" who somehow misjudged the housing market so badly that they plunged our country into a depression. Yes, those "smartest people" indeed.

Smart and greed have same denominator but drive actions in complete different ways. And yes, smartest PHDs (mostly statisticians) work on WS.
If anyone feels they are smarter they should take equity out of their house, sell the car and the dog and invest, put all that money on 1 Company with highest returns and growth potential and reap the benefits. Don't tell anyone though.

Waiting.....

[mdriftmeyer]

Investors want the stock to split so they have more shares to play with in hedging shorts and day trading on the margins up or down.

[Avatar74]

Originally Posted by Danoc

Apple is way underpriced today.

What's your mathematical basis for this statement? Give me a number and tell me how, mathematically, you got there.

[Mark Booth]

Lots of people have lost faith in Apple, not just institutional investors. I'm about as big of an Apple fanboy as there is, but even I can see too many recent missteps. The question of "what would Steve do" is a tired cliché, a question that Steve told Tim Cook not to ask himself. But the market and consumers had FAITH in Steve. Blind faith. Tim Cook hasn't earned that yet. And, until he does, investors and consumers are going to jump ship at the slightest hint of a storm.

Yes, it's ridiculous that Apple can have its most profitable quarter ever and yet Wall Street dumps the stock. But Apple has always been a growth stock and investors are concerned that the growth is stagnating. And since Apple hasn't released a single product in the last year that I plan to buy, I can completely understand Wall Street's skepticism.

When Apple starts releasing products that I can't wait to buy, then I'll know maybe things have turned around. I haven't had that "gotta have it" feeling since the iPhone 4S was released in 2011.

Mark

[Rogifan]

Originally Posted by TheHateMachine

You are right, this entire slide has been nothing but panic selling. Nothing else could have possibly influenced people to want to pay less for Apple stock or value it differently. Everyone just sees people selling and decides to sell! First it was profit taking, then it was capital gains tax and now it is just everyone in panic mode! Are you also in the same camp that has been claiming that we should buy the stock since its considered a steal the entire ride down from $705?

Conspiracy theories everywhere! Heavily manipulated stock, nothing to see here folks. Only manipulated when it goes down, when it goes up it is just Apple being awesome!

Macrumors, harboring massive quantities of aluminium hats for Aim Chair Power Brokers since September 2012.

I've never said anything about whether people should buy or sell the stock. But I do think its panic selling right now. I mean what happened with the company since September that would warrant a 40% sell off? When prior to September Wall Street was running it up to $700 with $900 and $1000 price targets?

[singularitie]

Originally Posted by Avatar74

May I ask why you aren't looking for other bargains that exist currently out there in the market that have as much or greater return potential? (They do exist, trust me.)

I never said I didn't. I bought ALU when it was $0.99, NOK for $2.45 (SOLD), CSCO @$19.56 among others. I've recently bought AKS and looking at JRCC. And to take on extreme risk I invested in FNMA and FMCC. Couple, 3 grand for a chance to make big. EEHHH... why not?

[MTL18]

Originally Posted by Myiphone7

I wouldn't turn a trade into an investment. If you bought apple at 605 with the idea it'll reach 1001 but instead it went to 437 (current price), then that's just a bad trade. Turning a trade into a "long term investment" when the trade goes sour always amounts to tremendous losses.

To be fair, he never said he was trading it. He said he was investing in it. If it is his own cash, and he has no pressure to sell, then there is no way to know that this will be a bad call. We have a dividend stock going through a transitional phase and still making billions. Selling a long term investment when it is down huge on account of 1 earnings report is a worse call in my opinion.

Apologies if the original poster is a girl, I got carried away with "he's"

[Chupa Chupa]

Originally Posted by Rogifan

Honestly these huge drops every day are just making Wall Street look stupid right now. I mean what really constitutes all this panic selling?

Except you don't know what they are selling. They could have a margin call and forced to sell. They could be trying to lock in profits and will buy back at a lower price. They could be trying to stave off a bigger loss. Investors and institutions aren't selling on a whim. They are genuinely spooked. If/when Apple has a new big product or monster earnings the stock might rebound, but its irresponsible to double down on a pair of 4s when the house is showing a face card.

[mdriftmeyer]

Regarding Wall Street full of PhDs.

If they have PhDs in Engineering, Physics, Mathematics, etc., then none of these folks were achieving tenure, working for corporations in SV [where stock options and salaries put real talent in the tens of millions and then some] or actually recognized by their peers in whatever field they so choose to do their research.

As a Mechanical Engineer with CS degree I worked with PhDs at NeXT and Apple from Astrophysics, ME, EE, Pure and Applied Mathematics [crypto, algorithm theory, etc], etc., but most of them with rare exception weren't the giants at NeXT or Apple.

During my undergrad days both the Physics and Mathematics departments notoriously have a hard time filling out their departments in certifications. Not because they turn people away. It's because the best mathematicians become Engineers whether it be EE, ChemE, ME, Materials Science Engineering, etc., who want to work designing chips, work with MEMS, Nanomaterials, etc.

They don't want to just work in Particle Physics or attempting to carve a nitch in most of pure and applied mathematics which has already been done.

Most of the software developed is not by in-house PhDs who wanted to strike it rich with Wall Street. It's outsourced.

My developer list for Professional Services always included Merrill Lynch, Fanni Mae, Swiss Bank, etc., who were contracting out NeXT/Apple consultants and in-house Enterprise staff to develop their Enterprise Solutions.

Sun Microsystems was a huge shop at doing this, not to mention Oracle, Sybase, etc.

Most of the development is done by 20+ year architects of n-tier mission critical software, not a bunch of bored PhDs with Physics and Math degrees. This myth continues to perpetuate itself. Wall Street is not teaming with the smartest groups of folks. They are teaming with the largest unethical groups of folks. Mostly business and law majors.

[jm001]

Whoa whoa whoa! Apple is not in freefall mode here folks. First of all WTF, they are the SECOND most valuable publicly traded company in the WORLD! And they are just short of being first again so what's with the panic? I see the decline in stock as more of a market correction as I felt that $700US/share and estimates of upto $1000 were just astronomically misleading. The media makes it look like they are in the same situation as RIM, but they just made record profits again. As for stabilizing demand, well any company will eventually stabilize until they create a new product that piques everyone's interest. Exxon does oil and the world is still hungry for oil. It's hard to beat resource based companies since resources are a common need around the world. There's always demand for resources.

[BigZ243]

If ever Apple could have an event showing a revolutionary new product it would be now.

[mike-sr29]

To be a bull when everyone is a bear and to be a bear when everyone is a bull... I did break a rule and that is to buy in several groups and not all at once. A rule not to be broken.

[winston1236]

Originally Posted by NT1440

LOL what do you define as long term?

Oil companies are done in the next 30 years, or we all are.

No theyre not. If you think exxon is just to close its doors and shut down when oil is gone youre crazy. They will be right there selling whatever energy source of the future is.

[Avatar74]

Originally Posted by singularitie

I never said I didn't. I bought ALU when it was $0.99, NOK for $2.45 (SOLD), CSCO @$19.56 among others. I've recently bought AKS and looking at JRCC. And to take on extreme risk I invested in FNMA and FMCC. Couple, 3 grand for a chance to make big. EEHHH... why not?

What I meant was that you're playing the see-saw game, talking about getting back on. the problem is that in current market conditions, there's a lot more downward pressure on Apple because their competitive moat is eroding. Their primary guide in innovation gone, it's going to be much harder for them to even maintain in a tech market that's maturing.

That's the nature of the industry and I would probably instead focus those resources on the next thing before others catch on to it. All eyes are already on Apple, so the propensity for it to be overpriced (even now) is much higher than its likelihood of being underpriced at any point in its earnings slope.

On the one hand I think it's good you have a focus on hardware manufacturers as valuation is always easier when you have countable widgets in current assets. But on the other hand it looks like you're very tech and finance centric.

One of my biggest gainers of last year was a farm machinery manufacturer. I acquired it considerably underpriced after having researched its management, its operating cash flows and its competitive moat. All of which took maybe inside of fifteen minutes.

There's a different school of thought there that high reward can actually come at lowest degrees of risk when you know where to look.... it basically amounts to the idea of acquiring a dollar worth of assets for sixty cents. Every time you bank on the hope that the dollar worth asset you paid fifteen dollars for will go even higher, you're taking on more risk for less reward.

Just something to chew on....

[bbeagle]

Originally Posted by nagromme

From #1 to #2. In other words, Apple is now TWICE as far along as they had been, towards being the LEAST valuable company in the world.

On a similar note, American Football is declining in popularity big time. Just last month there were 15 games a week on TV. This past week, only 2. In a month's time, there will be NONE on TV.

It sure doesn't bode well for the NFL, once the most popular sport. The league's days are numbered. It all comes on the heels of Ice Hockey appearing on TV for the first time in the last 6 months. Cause and correlation?

[apple-win]

Originally Posted by Avatar74

What's your mathematical basis for this statement? Give me a number and tell me how, mathematically, you got there.

http://en.wikipedia.org/wiki/Graham_number

http://www.gurufocus.com/term/graham...%2BNumber/AAPL

[MushroomTip24]

It's time for Apple to stop messing around. Give us up to date products instead of focusing on thinner products. LOL They should of gave us the Ipad mini retina in the first place. Iphone 5 was really boring. A few years back everybody wanted an Iphone, that's not the case anymore. Competitors caught up with them. Until they come up with something new and innovative I don't see the stock moving up again in that $700-$1000 range.

[AppleFan1984]

Originally Posted by apolloa

Maybe its about time Cook used some of that pile of cash to grow the business, like the stock market and analysts want them to do? Because its doing nothing else for the company.

Well, apparently it's doing at least one thing:
http://crave.cnet.co.uk/mobiles/appl...-vow-50009420/

[Newton70]

How does a company just sit back and let over $200,000,000,000 in market cap get erased in a matter of months? Yes, I know the market is irrational and what not but Cook and company have this dear in the headlights look as Wall Street repeatedly punches them in the face. The least the company can do is increase the dividend and share buyback program. Honestly, sitting on all that cash and not returning more of it to shareholders is criminal. Even if they increased the dividend and share buy back program, they'd still have the largest war chest in the business world to use for acquisitions, operations, or whatever they hell they'd want to do with it.

[MTL18]

Originally Posted by apple-win

http://en.wikipedia.org/wiki/Graham_number

http://www.gurufocus.com/term/graham...%2BNumber/AAPL

Yes, but you know that the Graham Number is inappropriate on large cap stocks right? Although your wikipedia link does not state it, there are many definitions of the Graham Number that specifically state that it is inappropriate for medium to large cap stocks.

Found a good definition: http://www.investopedia.com/terms/g/graham-number.asp

[Avatar74]

Originally Posted by apple-win

http://en.wikipedia.org/wiki/Graham_number

http://www.gurufocus.com/term/graham...%2BNumber/AAPL

Well, we're on the same page as far as the school of thought on valuation.... I'm an avid fan of Graham and value investing. However, by that calculation (I come at it from triangulating a few different calcs including that, terminal value and my own formula for determining operating value)...

But here's my question then: Apple's Graham Number is $308. They're priced at $444. So by that metric your statement that they are "way underpriced" is HUGELY false.

To have a comfortable margin of safety, using Graham's philosophy, they'd have to be trading somewhere between $230 and $270 per share (10-25% margin of safety) since the Graham Number is the theoretical absolute MAXIMUM one should pay.... but not the ideal bargain with a sensible margin of safety to insulate one's self from potential of catastrophic loss.