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I may be wrong, but I think last year you were pretty down on Apple's share price and the company as an investment. Do I recall that correctly? And if so, how do you like it at this price? I also recall you had objections about trading based on the P/E ratios. Is that right? I don't recall the argument (I might not have gotten it at the time.) But do these P/E ratios start to get tempting to you? They have to me. A few quarters of performance not too different from how Apple did last year and this stock price is going to look way too low, I think.
Not yet, even on past analysis if we ignore what factors have changed their operating cash flow outlook. My objections weren't solely about Apple's P/E ratio at the time, but about the reliance upon P/E ratios in general.
think about it.... What does a P/E ratio tell you? Does it tell you what the operating efficiency of the company is? No. It tells you two things. Price and Earnings... as if one has any bearing on the other. The only question P/E ratio answers is "How many times in excess of earnings was the market dumb enough to pay for this security?" If the question is: "Should I be only as dumb as the market?" The answer is always "No." So at any given time any P/E ratio will only ever tell you "This is how dumb you shouldn't be." Not "Now is a good time to be this dumb."
It doesn't matter if "comparables" have similar P/E ratios.... Is paying sixteen dollars for one dollar smart? I don't know... but it's never as smart as paying sixty cents for one dollar.
At any rate, that has no bearing one way or the other on my thoughts on AAPL.
In the same time that another person was waiting for Apple to lose the 35% of its share price that it did, just in the hopes of getting on board with it, I had various securities producing positive returns of 25 to 65 percent.
So.... I'm more than content. It's been an absolutely stellar year for me. I don't expect that type of performance to continue so I'm not about to take uncertain/unnecessary risks with the gains I've made.
I'm busy looking for the next thing before someone gets wise to it. The next thing to me doesn't mean "when should I jump on the same old train everybody else is on" but "where's that newer, faster train with the cheaper tickets that nobody knows about just yet."
I don't get nostalgic about investments. Sure, often I look for an otherwise solid company that hit some kind of momentary speedbump in price.... but the margin of safety has to be considerable. Apple's price drop isn't due to one lawsuit or one hiccup in supply chain or one manager who got caught with a hooker... The issue for me is that nothing on their balance sheets or income statements or projected operating cash flow really makes me go "Holy *****, this is a bargain."
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