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Old Feb 26, 2013, 02:40 PM   #51
mrhick01
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Quote:
Originally Posted by mac jones View Post
God bless you. And God bless America.

Give to the United States Stock Market. Support the Corporations, and the American way.
Well I mean that is what it is, more or less. Now we argue about how justifiable that is or not, but it exists and has been here for a couple of centuries.

The exchange exists as a means to accumulate capital and build wealth. I continue to hope that this engine for growth maintains a satisfactory level of integrity and restraint for the nation and the nation's investors, that certain elite groups that are exposed to more information than others do not have an unreasonably unfair advantage over these others.

Wishful thinking, I know.
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Old Feb 26, 2013, 02:42 PM   #52
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I wonder how this will affect the dividends.
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Old Feb 26, 2013, 02:43 PM   #53
samcraig
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So can someone explain the problem with this logic?

I have 1K to invest
company X is currently $200 a share. This means I can by 5 shares.

I have 1K to invest
Company X's stock has just split - it's now $100 a share. I can buy 10 shares

30 days from now - stock is up 100 points.

Scenario #1: if I sell - I have made $500
Scenario #2: if I sell - I have made $1000

No?
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Old Feb 26, 2013, 02:46 PM   #54
Tommy555657
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Apple stock

Typical pump and dump by one of Cramer's cronies. Cramer admitted to price manipulation in an interview about his hedge fund he ran.
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Old Feb 26, 2013, 02:47 PM   #55
FluJunkie
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Originally Posted by SiPi View Post
Buy 100+ or dont bother at all.
I am glad I bought a modest 20, when Gil Amelio was CEO.
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Old Feb 26, 2013, 02:51 PM   #56
Boatboy24
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Originally Posted by Peace View Post
Some people can't afford $450-$700 a share as an investment.

$200-$300 is more reachable for those wanting to invest and don't have a lot of money.
This only applies if you can afford only one share (in which case, you probably shouldn't be buying indivdual stocks). $2,500 invested in AAPL is still a $2,500 investment, whether you buy five shares or ten.
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Old Feb 26, 2013, 02:51 PM   #57
jon3543
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Quote:
Originally Posted by samcraig View Post
So can someone explain the problem with this logic?

I have 1K to invest
company X is currently $200 a share. This means I can by 5 shares.

I have 1K to invest
Company X's stock has just split - it's now $100 a share. I can buy 10 shares

30 days from now - stock is up 100 points.

Scenario #1: if I sell - I have made $500
Scenario #2: if I sell - I have made $1000

No?
Your numbers are right, but do you seriously not perceive any difference in the two scenarios?
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Old Feb 26, 2013, 02:52 PM   #58
phillipduran
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Quote:
Originally Posted by samcraig View Post
So can someone explain the problem with this logic?

I have 1K to invest
company X is currently $200 a share. This means I can by 5 shares.

I have 1K to invest
Company X's stock has just split - it's now $100 a share. I can buy 10 shares

30 days from now - stock is up 100 points.

Scenario #1: if I sell - I have made $500
Scenario #2: if I sell - I have made $1000

No?
There is more supply in scenario 2 so I think you are comparing apples (ha!) to oranges.
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Old Feb 26, 2013, 02:52 PM   #59
adambadamh
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Quote:
Originally Posted by samcraig View Post
So can someone explain the problem with this logic?

I have 1K to invest
company X is currently $200 a share. This means I can by 5 shares.

I have 1K to invest
Company X's stock has just split - it's now $100 a share. I can buy 10 shares

30 days from now - stock is up 100 points.

Scenario #1: if I sell - I have made $500
Scenario #2: if I sell - I have made $1000

No?
Your math is right, but in one case the company's shares appreciated 50% and in the second they appreciated 100%. If a stock splits in two that means that its earnings per share is also halved.

Shares are all about the change in percentage of your investment, the actual dollar value of a single share doesn't really matter in the grand scheme of things other than to an investors mental awareness. The fact that Google is trading at about $800 has absolutely no relationship to Apple trading at $450 or the value of any other stock.
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Old Feb 26, 2013, 02:53 PM   #60
Batavian
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Pump and Dump.

This Jack is gonna laugh all the way to bank.
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Old Feb 26, 2013, 02:54 PM   #61
UnfetteredMind
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Quote:
Originally Posted by samcraig View Post
So can someone explain the problem with this logic?

I have 1K to invest
company X is currently $200 a share. This means I can by 5 shares.

I have 1K to invest
Company X's stock has just split - it's now $100 a share. I can buy 10 shares

30 days from now - stock is up 100 points.

Scenario #1: if I sell - I have made $500
Scenario #2: if I sell - I have made $1000

No?
The equivalent of the 100 point gain on the $200 stock would be 50 points for the $100 stock and thus the gain is the same for each. It would take the same amount of performance improvement/reporting to grow the $200 stock by 100 points as to grow the $100 stock by 50 points (50% gain).

EDIT: I see adambadamh already replied with the same info.
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Old Feb 26, 2013, 02:56 PM   #62
samcraig
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Quote:
Originally Posted by phillipduran View Post
There is more supply in scenario 2 so I think you are comparing apples (ha!) to oranges.
Quote:
Originally Posted by jon3543 View Post
Your numbers are right, but do you seriously not perceive any difference in the two scenarios?
Quote:
Originally Posted by adambadamh View Post
Your math is right, but in one case the company's shares appreciated 50% and in the second they appreciated 100%. If a stock splits in two that means that its earnings per share is also halved.

Shares are all about the change in percentage of your investment, the actual dollar value of a single share doesn't really matter in the grand scheme of things other than to an investors mental awareness. The fact that Google is trading at about $800 has absolutely no relationship to Apple trading at $450 or the value of any other stock.
Well if I'm in to make a quick profit - doesn't it make sense to get more excited about a lower entry point (post split) vs buying less shares.


Again - not talking percentages. I am talking when the stock upticks 100 points in both scenarios.
I'm not saying *I* am - I'm posing the scenario so people can understand why some people might care (or not) about the split/buying in at a lower point.
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Old Feb 26, 2013, 03:03 PM   #63
Avatar74
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Quote:
Originally Posted by Ralf The Dog View Post
It would be moronic for most investors to purchase 100 shares at $148,32. If I were to do so, I would be very overweight on one stock. Any investor with that little diversification is not very bright.

Proper sector diversification and risk mitigation takes a significant amount of money... playing math games with splits doesn't change the viability of the operating returns generated by a company, and institutional buyers who make the market generally know that.

My point is that investors who saw Munger and Buffett's business acumen and recognized it as being better than their own have been handsomely rewarded for getting on board years ago and sitting tight....

Berkshire is itself more diversified than most people could themselves allocate... with around 500 subsidiaries in all kinds of industries and a number of major stakes in companies like Coca-Cola, American Express, etc.

The company has grown the per share book value of its investments 22% year over year, annually compounded for half a century. It's own share price has tracked very closely to its book value, rather than seeing volatile and irrational bubbles and bursts... and consequently has snowballed a staggering 490,000% cumulative return since 1964.

Find me a single fund manager who could have even come close to that with their own picks.... I can name at least two, and neither of them will talk to you if you have less than $30 million to invest anyway.

If that's not you, my advice is to put your money into an index fund and sit on it.... Unless you really can beat the S&P year in and year out, in which case you ought to be an investment manager at Berkshire...
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Last edited by Avatar74; Feb 26, 2013 at 03:10 PM.
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Old Feb 26, 2013, 03:04 PM   #64
Silvereel
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Originally Posted by Peace View Post
Some people can't afford $450-$700 a share as an investment.

$200-$300 is more reachable for those wanting to invest and don't have a lot of money.

The last I heard Apple was a publicly traded company.
I've never understood this argument. I have a lot invested in Apple, and I am by no means very wealthy. If you intend to invest X amount of dollars, in the market, it doesn't really matter if you get 5 shares or 500 shares of something for that amount. Stock splits really don't change anything, aside from perception, and I suppose that from a psychological perspective that's what matters. But there's really absolutely no point in saying you have to have 'more' shares. That isn't what matters. It's all in the money involved.
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Old Feb 26, 2013, 03:07 PM   #65
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Originally Posted by adambadamh View Post
Your math is right, but in one case the company's shares appreciated 50% and in the second they appreciated 100%. If a stock splits in two that means that its earnings per share is also halved.

Shares are all about the change in percentage of your investment, the actual dollar value of a single share doesn't really matter in the grand scheme of things other than to an investors mental awareness. The fact that Google is trading at about $800 has absolutely no relationship to Apple trading at $450 or the value of any other stock.
That and a 100% gain is not twice as difficult to achieve as a 50% gain... it's exponentially more challenging.

Also, it's very unrealistic. People look at Apple's near term success like they looked at the housing market... thinking this is the norm. But it's not. It doesn't last. The 100 year average anuual rate of growth in housing prices is 1.7% (0.7% factoring in inflation). In securities, using the DJIA as the barometer? 5.3%.

Anything above 5% is where you enter into varying degrees of risk (versus the risk-free rate (RFR), set by the 30 year T-bill). Anyone telling you that your or even a good money manager's picks could produce returns in excess of 8% consistently over a period of three decades is very likely blowing smoke up your ass.... (unless your name is Warren Buffett, Jean Marie Eviellard, Walter Schloss, Charlie Munger, Stan Perlmeter, Lee Kopp or Whitney Tilson)
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Last edited by Avatar74; Feb 26, 2013 at 03:15 PM.
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Old Feb 26, 2013, 03:07 PM   #66
Ryth
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Originally Posted by Yelmurc View Post
I wonder how this will affect the dividends.
I believe it will be the same thing. It splits. So you'll get around $1.23 a share vs $2.56 or whatever they were paying out.

So if you had 100 shares and were getting $256 dollars a quarter, then now you'll have 200 shares and still get $256 dollars a quarter.

----------

FYI: From Apple 2.0

Doug Kass went long on AAPL Monday, floated the rumor Tuesday, sold shares 30 minutes later and then said it couldn't happen tomorrow without a shareholder vote.
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Old Feb 26, 2013, 03:08 PM   #67
Buck987
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1% is a jump?
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Old Feb 26, 2013, 03:08 PM   #68
Peace
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Originally Posted by Silvereel View Post
I've never understood this argument. I have a lot invested in Apple, and I am by no means very wealthy. If you intend to invest X amount of dollars, in the market, it doesn't really matter if you get 5 shares or 500 shares of something for that amount. Stock splits really don't change anything, aside from perception, and I suppose that from a psychological perspective that's what matters. But there's really absolutely no point in saying you have to have 'more' shares. That isn't what matters. It's all in the money involved.
I'm not singling you out. Ok ?

But I choose to not listen to armchair stock manipulators. I don't even like the way the stock market works. I go by gut instinct and it has never let me down before. I have no idea if Apple will split or not. Nor do I really care all that much.

With that. Carry on folks!!

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Old Feb 26, 2013, 03:11 PM   #69
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Originally Posted by FluJunkie View Post
I am glad I bought a modest 20, when Gil Amelio was CEO.
Think how glad you'd be if you bought 100 when Gil was CEO.
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Old Feb 26, 2013, 03:12 PM   #70
pizz
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Originally Posted by Avatar74 View Post
Precisely. Scarcity increases value... Berkshire-Hathaway has not had a single stock split of their Common Class A shares since 1964... Current price? $148,362 per share. I like it that way. It keeps out the scatterbrained speculators who panic on every little tea leaf they read too much into.

Say it with me: speculation is not investing.
BH is the exception. What other stock do you know is worth 148,362?

Last edited by pizz; Feb 26, 2013 at 03:19 PM.
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Old Feb 26, 2013, 03:12 PM   #71
codefuns
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Originally Posted by mrhick01 View Post
Why does it appear to me that you are on a one-person crusade to sink Apple the corporation?
he didn't sink apple, he is just kind to save your real money.
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Old Feb 26, 2013, 03:22 PM   #72
Popeye206
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Quote:
Originally Posted by samcraig View Post
So can someone explain the problem with this logic?

I have 1K to invest
company X is currently $200 a share. This means I can by 5 shares.

I have 1K to invest
Company X's stock has just split - it's now $100 a share. I can buy 10 shares

30 days from now - stock is up 100 points.

Scenario #1: if I sell - I have made $500
Scenario #2: if I sell - I have made $1000

No?
No. :-)

In Scenario 1, you would have bought 5 shares at $200 each... investing $1000. If the stock goes up $100. you now have $1,500 in value. This is all right. BUT, if your $200 per-share stocks split, your 5 shares now become 10 shares (still it cost you $1,000) only now if you add a $100 to the price, you now made $1,000 and not $500.

What you expect with a split is that the shares get cut in half, but then rebound because now they are much cheaper and more investors can buy in driving the stock back up.

If Apple splits at 450 and is worth $225 tomorrow, then worth $300 next week, it's like the stock went back up to $600 pre-split. A good thing for us all.

Help?
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Old Feb 26, 2013, 03:23 PM   #73
Avatar74
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Ya bet BH is the exception. What other stock do you know is worth 148,362?
It's exceptional only in the sense that the degree of its returns over time are unparalleled. The fact that it produced any returns over time, rather than consistent losses, is not exceptional.... most companies that have survived that long have had to have relatively stable operating performance.

But the principle that its per share price has appreciated closely with actual growth in operating value because they did not split is not an anomaly.

Go find other companies that have not split and have had pretty solid operating results... Compare those to the long term growth in total market capitalization of companies that performed reasonably well but had repeatedly split.

You'll see a marked difference.... The only reason to have a stock split is to artificially create more speculative behavior which is great if in the near term you want to falsely inflate stock price out of proportion with the actual operating results of the company rather than have sustainable, meaningful organic growth that compounds exponentially over time.
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Old Feb 26, 2013, 03:23 PM   #74
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Originally Posted by spazzcat View Post
In theory there are stocks on paper somewhere, but you almost never seem them. They are held by your broker, you maybe able to request them? But it would be a pain to sell because you would need stocks to be with your broker...
Actually as of, I believe 2011, most companies no longer actually issue stock certificates. All digital.
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Old Feb 26, 2013, 03:24 PM   #75
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How is that not stock price manipulation?

Dude, really. It "jumped" 1.3%. Wow, someone made billions!!

pfffft..


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