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Old Nov 19, 2012, 01:29 PM   #26
Rocketman
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Which is why I doubled my stake in a Vanguard S&P 500 index fund, rather than pouring it all into one bucket of risk with AAPL. If anyone here can beat the S&P year in and year out, they should be a fund manager for Berkshire Hathaway.
The problem is not beating it. But beating it with scale of positions. The limit is liquidity in this market. Want to invest $10m? No problem. Want to invest $2B? Liquidity is the primary driver not picks or timing.

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Old Nov 19, 2012, 01:30 PM   #27
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Effin' analysts...
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Old Nov 19, 2012, 01:31 PM   #28
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The funny thing about chartistry is that the "trendline" changes radically depending on what timeframe and how much data you're looking at. Technical analysis is the process of drawing a longer line based on the earlier parts of the line.... that's not analytics at all. That's dart throwing.

Perhaps for the long term. But if one is trading off short-term volatility and swings, then it's a decent metric to use.
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Old Nov 19, 2012, 01:33 PM   #29
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The problem is not beating it. But beating it with scale of positions. The limit is liquidity in this market. Want to invest $10m? No problem. Want to invest $2B? Liquidity is the primary driver not picks or timing.

Rocketman
Neither liquidity, nor timing, nor picks are a method.

Value, however, is. Operating value isn't subjective. Price to book isn't subjective.

If liquidity is a driver of market pandemonium... But basic economics teaches the relationship between scarcity and value. The only way to beat the S&P year in and year out the way Berkshire's fund managers have is to ignore the market and its proposition of liquidity, and look for long-term, stable value acquisitions that are currently underpriced by the market.
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Old Nov 19, 2012, 01:35 PM   #30
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Definitely keep holding. That's too much of a loss at this point.
Yeah...question is how long.
I'm hoping I can exit somewhere in the $700s come Q1 earnings call.
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Old Nov 19, 2012, 01:35 PM   #31
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Perhaps for the long term. But if one is trading off short-term volatility and swings, then it's a decent metric to use.
I've never met a day/swing trader who didn't wipe out his principal at some point.

Any number times zero is still zero. Compounding interest over the long term always beats trading. Impatience is the enemy.
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Old Nov 19, 2012, 01:36 PM   #32
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Price to book isn't subjective.
What's the price to book of AAPL today (accounting for cash and growth rate of course) since "earnings multiple" matters.
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Old Nov 19, 2012, 01:37 PM   #33
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Though not completely related, the market went south right after the elections - further contributing to Apple's losses.
Also, today, for the first time in four weeks (at least at the moment) the Dow average has gone up 45 points.
Aside from Apple's fluctuations, the market is doing it's own share of movement. That is, completely normal.

Stay in for the long haul and don't let the short term freak you out.
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Old Nov 19, 2012, 01:38 PM   #34
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@#$@*the market.. just buy gold and silver.. at least it's in my hands...
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Old Nov 19, 2012, 01:38 PM   #35
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These people on Wallstreet have no idea what they are doing... They are so out of touch with Apple and the Tech industry. The ONLY reasons why Apple will not become a $1trillion company is because of a handfull of analysts that put out crappy "analysis" (opinions) that are based off of their 20 years of experience in betting everything they own on the Microsofts, the Intel's; etc.

Facebook is a good example of this. Wallstreet has no idea how powerful the social media combined with technology such as iphones (super-smart phones in general) have on how the future will be.
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Old Nov 19, 2012, 01:43 PM   #36
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Originally Posted by lzyprson View Post
These people on Wallstreet have no idea what they are doing... They are so out of touch with Apple and the Tech industry. The ONLY reasons why Apple will not become a $1trillion company is because of a handfull of analysts that put out crappy "analysis" (opinions) that are based off of their 20 years of experience in betting everything they own on the Microsofts, the Intel's; etc.

Facebook is a good example of this. Wallstreet has no idea how powerful the social media combined with technology such as iphones (super-smart phones in general) have on how the future will be.
They just care about how they will make money from fb. Which at the moment isnt making a huge amount compared to its valuation.
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Old Nov 19, 2012, 01:47 PM   #37
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So apple stocks surged 6% because an analyst said something good about apple?
Epic fail?
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Old Nov 19, 2012, 01:48 PM   #38
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Phew. I'm glad. I was really getting worried $500 billion market cap wasn't going to be enough to keep the doors open through 2013.
Actually, that money is not Apple's, nor is it available for Apple to use. That is money in the hands of Apple's investors. Granted, Apple would want to keep the stock growing in case they needed to raise capital by issuing MORE stock, but since Apple has over 100 Billion in the bank, there is no need to get more money. But the market capitalization of Apple could go to $0 and not impact Apple's operations. And Apple could operate without any revenue for a considerable period before they ran out of money. So, I wouldn't worry about Apple in any case.

P.S. I understand you were being sarcastic.
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Old Nov 19, 2012, 01:49 PM   #39
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So apple stocks surged 6% because an analyst said something good about apple?
Epic fail?
I'm sure Brian White is flattered Mac Rumors thinks he can move Apple's stock price 6%.
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Old Nov 19, 2012, 01:50 PM   #40
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What's the price to book of AAPL today (accounting for cash and growth rate of course) since "earnings multiple" matters.
Apple trades at close to five times book value. But if you want to actually account for operating cash flow and growth, using either an operating cash growth model (working capital plus projected cash flows discounted to NPV) or enterprise value calculations (based on terminal growth), it's somewhere closer to $500 per share. That, however, doesn't give the shrewd investor any sensible margin of safety at current market price. The daytrader would never have found anything interesting about Apple when it was an underpriced investment.

Earnings multiples are bs.... only telling you what premium every other fool paid for a security in a sector, not what you should pay.

But let me step back a second: Regarding the earlier point about liquidity and scale. Sure, when you have very large scale positions it becomes more difficult to move the needle as capital needed to do so becomes limited.... But no one here is really in the position of a Warren Buffett, who is currently shopping around for a couple of $20 billion deals. So, in principle, beating the S&P year in and year out is possible, but daytrading would never get you there... but some people will never understand why buying a dollar worth of assets for sixty cents actually increases your return while reducing your risk, versus paying more than a dollar for a dollar of assets which increases your risk but not your return.

Call it what it is... daytrading is basically gambling. But, if you've got money burning a hole in your pocket, at least casinos have martinis and women....
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Last edited by Avatar74; Nov 19, 2012 at 02:11 PM.
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Old Nov 19, 2012, 01:51 PM   #41
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Wasn't it AC/DC? Lol
Yes.
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Old Nov 19, 2012, 01:52 PM   #42
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I remember when I bought stock at $16 a share. Best decision I ever made. </DREAM>
You're lucky I got it at $74.
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Old Nov 19, 2012, 02:01 PM   #43
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Personally I don't think it's because of Analysts comments by a decent "correction" in the sell off of shares that occurred over the past couple of weeks.

There are analysts posting comments almost on a daily basis.
Agreed... there is something else at work here. If this analysts comments drove the stock up that much then it is simply because its a signal to other analysts that its time to cash in on their market manipulation of driving the stock down so they could buy it cheap.

Doug Kass did just that by posting publicizing his 10 reasons why AAPL was a bad stock to own and then (with 9 of those reasons still being true) reversed course and published his "5 reasons to buy AAPL" and started buying it up. If you don't know who Kass is -- he is the hedge fund manager who said the iPhone 5 "feels like a toy" because it was just "too thin" and "too light".

Just like John Paczkowski says: Apple Investors are still Wusses.

The hedge fund managers and analysts know they are wusses. They know they can manipulate the price to their advantage. There is some kind of fear around Apple being like Cinderella, but nobody knows how long it is until midnight. I am 100% certain that one day Apple's growth will slow down to an IBM-like pace. I am 100% certain that one day Apple will be overtaken by a competitor. But I'm pretty darn sure that slow-down and demise will likely take a good 10 to 15 years of time once it starts and will be as slow a demise as Microsoft experienced. Apple may not experience it if they turn into a steady stock like IBM that can live on for decades with ups and downs.

But if Apple is heading for a cliff like Microsoft, it will be a long time before they are facing it. The company grew 45% in revenue last year and 61% in profit. People are seeing the value proposition of going "all Apple". I had a couple I know through some friends tell me on Saturday that they are planning on going the "all Apple" route because they went to Apple store and they could see how well things work together.

Research in Motion faced that same cliff two years ago -- they took a dive right in. Apple may be there (again) some day. They may make a series of mistakes or some competitor may change the whole game when they aren't looking, but it will be preceded by a decade of slow decline rather than a single product release not meeting the expectation of some reviewer or a single analyst declaring that Apple should have made a penny more per share and therefore this is a sign of the end.
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Old Nov 19, 2012, 02:03 PM   #44
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Wall Street hates uncertainty (e.g. Apple management shake-up, iPad mini launch).
Wall Street loves results, and Apple's holiday quarter (CY Q4 / FY Q1) earnings call will be in January, like always.
Add fiscal cliff fear to the mix.
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Old Nov 19, 2012, 02:06 PM   #45
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It does seem to be an easy way to make money.
And would constitute a federal crime. All of these "manipulation" charges are total hooey by people without the first cluey.
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Old Nov 19, 2012, 02:10 PM   #46
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Yeah...question is how long.
I'm hoping I can exit somewhere in the $700s come Q1 earnings call.

The best thing I can tell you is that if it takes that long, so be it.
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Old Nov 19, 2012, 02:11 PM   #47
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Originally Posted by extricated View Post
Though not completely related, the market went south right after the elections - further contributing to Apple's losses.
Also, today, for the first time in four weeks (at least at the moment) the Dow average has gone up 45 points.
Aside from Apple's fluctuations, the market is doing it's own share of movement. That is, completely normal.

Stay in for the long haul and don't let the short term freak you out.
Exactly. A lot of the recent down action on Wall Street is tax trading. Capital gains taxes are expected to rise in 2013. Investors aren't going to be tax traders, though, and their best strategy is to ignore the static. If you keep to a long time horizon, it doesn't matter what happens over a period of weeks or even months.
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Old Nov 19, 2012, 02:14 PM   #48
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Got to love Keynesian economics. QE1+QE2+QEinfinity+OperationTwist+OperationTwsit2+BankBailout+GMChryslerBailout+Tarp+Cash4Clunkers=A slightly better than expected day on Wall Street.

This economy is past the point of no return. We crumble without centralized pumping. Do yourself a favor, don't play against the machines.
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Old Nov 19, 2012, 02:14 PM   #49
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Exactly. A lot of the recent down action on Wall Street is tax trading. Capital gains taxes are expected to rise in 2013. Investors aren't going to be tax traders, though, and their best strategy is to ignore the static. If you keep to a long time horizon, it doesn't matter what happens over a period of weeks or even months.
Presuming you had a sensible acquisition price, right.
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Old Nov 19, 2012, 02:16 PM   #50
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Effin' analysts...
No doubt somewhere one is noting a $30 single session rise in the stock price is a sign of Tim Cook's failure and another analyst somewhere is saying "Steve Jobs never would have let the stock rise $30 during a session".
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