AAPL Stock Recoups Losses Incurred After Tim Cook Slashed Apple's Revenue Guidance

[KPandian1]

When apple was at $1T was Wall Street agreeing with Cook and a few months later disagreeing?

It does seems like that is what the stock market is doing - as AAPL has last almost twice the % of the Tech stock and overall market decline.

Maybe they are seeing the effects of his policies on Apple Co. and are voting with profit taking - just like Tim's focus.

 

[I7guy]

It does seems like that is what the stock market is doing - as AAPL has last almost twice the % of the Tech stock and overall market decline.

Maybe they are seeing the effects of his policies on Apple Co. and are voting with profit taking - just like Tim's focus.

So then I can assume that Wall Street is now agreeing with Tim as the stock has started to rebound.

Even though the guidance was reduced a company doesn’t sell $84 B worth of good and sales to disgruntled and dissatisfied customers.

 

[KPandian1]

So then I can assume that Wall Street is now agreeing with Tim as the stock has started to rebound.

The Wall Street doesn't hate Apple - just disagreeing with its recent direction. They waited until the XR was available for a reasonable time to show dissent.

 

[citysnaps]

The question is, do you raise the price and attempt to make the products "fashion symbols" with the branding? Or do you lower the price to compete with the newcomers in the space that offer nearly equal products?

Neither. You price your products to return the margin necessary, currently around 38%, to keep your company running well and satisfying investors. That's within industry norms and less than Samsung's and Microsoft's, just as an example.

Apple products are not fashion symbols. That's ridiculous. They are cast as premium products with outstanding features and sharp industry-leading design. Apple knows that competing with <$100 smartphones and low-cost laptops and accessories in a race to the bottom will not sustain the company, or satisfy their customer base.

 

[I7guy]

The Wall Street doesn't hate Apple - just disagreeing with its recent direction. They waited until the XR was available for a reasonable time to show dissent.

Then how do you explain the recent rebound? Market appreciation only?

 

[C DM]

I looked at my statement and verified the number of stocks. To keep it simple, each stock became 14 - full stop. So even at the peak value of the share is 14X233 = $3262. The purchase price for each stock was about $10 then, (maybe more) and the is 326 or less.

At today's $157 per diluted share price, the value is 14X157 = $2198, i.e., 219 times. Dividends not included.

I tried following the Investopedia math - can't understand their computation. That is the site I go to understand the investment jargon, they are a solid service; so even more confusing. Their example timeline is the same as mine.

So, no thousands multiplication.

If you or anyone can explain this to better comprehend the Investopedia because you worked their steps and understood it, please explain it to me.

Still this multiple is lovely.

Tried to time the market and sold some at $210 in August 2018; didn't get the peak. Hope to buy some now.

Percentages and times are certainly related, but are not the same thing. In fact the 219 times would be in the order of 21900% (well into thousands of percent).

 

[KPandian1]

Then how do you explain the recent rebound? Market appreciation only?

No love-fest yet.

Apple dropped $91 in three months flat - 39%.

Nasdaq and the other broad indicators fell - about 10-20% at most.

These market numbers have rebounded by about 15+% or more in January 2019.

Apple has recovered only about 10%. This is not a rebound; it is hardly at par with market appreciation.

The last time AAPL was at the current level ($157) was in August 2017!

Maybe it was overvalued at $233. Even at $157, it is a solid long-term performer; jumped from the $92 (May 2016) two years ago to $150 in May 2017 and $180 in May 2018.

Then the overly exuberant leap into the $230's in five months. That is mad institutional speculation about its upcoming products. The statement from Tim Cook blaming China and the "Battery" program for adjusting earnings prediction lower from the earlier numbers smashed it down. This maybe dragged the market along or it was a coincidence that AAPL dived with the market. Only AAPL dived by about three times as much as the market. All of this under the influence of speculation.

I was seeing a plateau at the 180's - its earning are about the best still. Its August to November quarterly earning jumped up freakishly.

The quarterly numbers to be released in February, reflecting the holiday sales and the highest number of every year, will show if it is doing well. If they are below $3, then Apple is performing below its own standards.

 

[I7guy]

No love-fest yet.

Apple dropped $91 in three months flat - 39%.

Nasdaq and the other broad indicators fell - about 10-20% at most.

These market numbers have rebounded by about 15+% or more in January 2019.

Apple has recovered only about 10%. This is not a rebound; it is hardly at par with market appreciation.

The last time AAPL was at the current level ($157) was in August 2017!

Maybe it was overvalued at $233. Even at $157, it is a solid long-term performer; jumped from the $92 (May 2016) two years ago to $150 in May 2017 and $180 in May 2018.

Then the overly exuberant leap into the $230's in five months. That is mad institutional speculation about its upcoming products. The statement from Tim Cook blaming China and the "Battery" program for adjusting earnings prediction lower from the earlier numbers smashed it down. This dragged the market along or it was a coincidence that the market dived with AAPL. Only AAPL dived by about three times as much as the market. All of this under the influence of speculation.

I was seeing a plateau at the 180's - its earning are about the best still. Its August to November quarterly earning jumped up freakishly.

The quarterly numbers to be released in February, reflecting the holiday sales and the highest number of every year, will show if it is doing well. If they are below $3, then Apple is performing below its own standards.

But you didn’t answer the question. Apple has more than a bit of market inelasticity and sometimes it goes the way it goes. That is why hindsight analysis is usually very good.

 

[KPandian1]

Then how do you explain the recent rebound? Market appreciation only?

Short answer, market appreciation only, and even then not at par with it. Not a rebound from the effects of Tim Cook's interview/warning.

[doublepost=1547918958][/doublepost]

But you didn’t answer the question. Apple has more than a bit of market inelasticity and sometimes it goes the way it goes. That is why hindsight analysis is usually very good.

Yes, hindsight is always good, even brilliant; were we talking about it?

 

[ibivibiv]

I agree with the clear differentiation. That ceased to be the case though in 2009 with the release of the galaxy. But today, Apple does retains its top notch customer service moniker.

When apple was at $1T wa Wall Street agreeing with Cook and a few months later disagreeing?
[doublepost=1547908449][/doublepost]
People who didn’t get out at about $208 are kicking themselves. And, IMO, that’s we’re some of the negativity comes from.

Well, yeah... the XR thing didn't work out swimmingly. There was that little wrinkle.

 

[ipponrg]

I agree with the clear differentiation. That ceased to be the case though in 2009 with the release of the galaxy. But today, Apple does retains its top notch customer service moniker.

When apple was at $1T wa Wall Street agreeing with Cook and a few months later disagreeing?
[doublepost=1547908449][/doublepost]
People who didn’t get out at about $208 are kicking themselves. And, IMO, that’s we’re some of the negativity comes from.

That is the inherent problem with investing in Apple.

Look at their historic volatility. People like Baymowe are trying to say this is a good stock to keep your money in long term when it has historically fluctuated drastically. I think that can’t be more apparent that you should not “invest long term” in this stock, but set the right triggers to get in/out. That’s how you will make the most of your investment at the expense of short/long capital gains
[doublepost=1547920971][/doublepost]

Apple products are not fashion symbols. That's ridiculous.

They certainly are not solely fashion symbols, but Louis Vutton, Angela, Hollywood, and many other designer brands/accessories would disagree with you. There is definitely a fashion appeal to it.

If Apple products weren’t decorated and marketed as sleek, I’d love to see if mainstream Hollywood and the general public would still buy into it. Imagine the stores looking like CompUSA.

 

[KPandian1]

I think that can’t be more apparent that you should not “invest long term” in this stock, but set the right triggers to get in/out. That’s how you will make the most of your investment at the expense of short/long capital gains

Good point.

If you don't mind paying capital gains tax or define yourself as a regular trader vs investor with long term goals, what you describe applies to AAPL and every stock. The delta should be enough to offset the cost of the trade plus tax to be able to do this. Don't know if the average person looking at the calendar to turn 365 days is going to make much.

Anyone who invested $1000 in 1990's and ignored the stock will be sitting on a gold mine now - better than most dividend stocks like oil.

 

[I7guy]

Well, yeah... the XR thing didn't work out swimmingly. There was that little wrinkle.

It’s a work in progress. Maybe the xr didn’t meet apple’s expectations however it’s the darling of Youtube, if that counts for anything.
[doublepost=1547926445][/doublepost]

...They certainly are not solely fashion symbols, but Louis Vutton, Angela, Hollywood, and many other designer brands/accessories would disagree with you. There is definitely a fashion appeal to it.

If Apple products weren’t decorated and marketed as sleek, I’d love to see if mainstream Hollywood and the general public would still buy into it. Imagine the stores looking like CompUSA.

Commenting on the “fashion” aspect of it...seems like comments are all over the place as I interpret them. Most manufacturers are attempting to be designing sleek, sexy upscale, premium looking phones. However Louis Vuitton doesn’t speak for me these are not fashion accessories in my book as sleek as they might look.

 

[ibivibiv]

It’s a work in progress. Maybe the xr didn’t meet apple’s expectations however it’s the darling of Youtube, if that counts for anything.
[doublepost=1547926445][/doublepost]
Commenting on the “fashion” aspect of it...seems like comments are all over the place as I interpret them. Most manufacturers are attempting to be designing sleek, sexy upscale, premium looking phones. However Louis Vuitton doesn’t speak for me these are not fashion accessories in my book as sleek as they might look.

I agree, I have one. It was a nice medium size for me and I don't obsess over the displays. I wish I still had Touch ID but meh. I'm curious to see what happens next. Maybe beef up the Xr, Drop the Xs and go with just a Max? Back to basics? Maybe they just muddied the market with too many offerings? Tough to say but the ride is fun

 

[sakurarain]

Tim is not the only one in Apple who shall bear the responsibility for the current status. yes, he is CEO but frankly there might be quite much causes and troubles on Apple as i could image. Who knows that there is not any office politic from other leaders against him? he is just be pushed to the camera. he is not so bad and even we can say he is qualified and passionate as i see, but maybe not quite capable to move apple constently forward like Steve. all i hope is keeping Apple developing as usual (at least not getting worse and worse) and wait until next Steve comes to the stage

 

[MacsRuleOthersDrool]

If financial markets were underdamped closed-loop control system then money could be made exploiting this feature. This is a generalization you can't make. No doubt that periodically this might be true, but we only know that in retrospective.

Regarding the analysts, you do have expectations or a consensus of them at least. If the expectations shift, all equal then the price according to their model should by definition go down. Same applies for the realization of expectations. I agree that the models analysts build and use with the assumptions will very often miss but when everyone is wearing gloves and scarves it's probably cold outside.

The knowledge I have of the Stock Market can be fit into a thimble. However, I spent a couple of decades developing closed-loop PID motor control systems. Hence my observation regarding the similarities between the Stock Market and an under-damped closed loop control system. ;-) But it was simply an observation, nothing more. But it does seem that the entire concept of "Puts" and "Calls"(?) or whatever the terms are, is exactly based on exploiting the prediction of the periodicity of certain stocks and commodities.

And there are no more sure-fire examples of "follow the leader" than Stock Market Analysts. Considering the that that the ENTIRE reason stocks go up and down is because certain "experts" THINK it should go up or down at any given moment. Nothing more, nothing less.

And the model of stock prediction is somewhat like weather prediction. Where I live, it was predicted that we were going to have Snowmageddon this past weekend, starting on Saturday morning. So pretty much everyone rushed to the grocery store and bought out every single loaf of bread, dozens of eggs, and gallons of milk, to the point that they were COMPLETELY sold-out by Friday evening, like these supplies were going to be unavailable for another month or something. Guess what? We got rain instead of snow (for the most part); but there was DEFINITELY a "run on the stock market" (grocery stores), that was NOTHING more than the product of an INCORRECT PREDICTION.

IMHO, the Stock Market all-too-often behaves like the panicky shoppers, where the predictions quickly become self-fulfilling-prophecies "just because".

 

[Coconut Bean]

The knowledge I have of the Stock Market can be fit into a thimble. However, I spent a couple of decades developing closed-loop PID motor control systems. Hence my observation regarding the similarities between the Stock Market and an under-damped closed loop control system. ;-) But it was simply an observation, nothing more. But it does seem that the entire concept of "Puts" and "Calls"(?) or whatever the terms are, is exactly based on exploiting the prediction of the periodicity of certain stocks and commodities.

And there are no more sure-fire examples of "follow the leader" than Stock Market Analysts. Considering the that that the ENTIRE reason stocks go up and down is because certain "experts" THINK it should go up or down at any given moment. Nothing more, nothing less.

And the model of stock prediction is somewhat like weather prediction. Where I live, it was predicted that we were going to have Snowmageddon this past weekend, starting on Saturday morning. So pretty much everyone rushed to the grocery store and bought out every single loaf of bread, dozens of eggs, and gallons of milk, to the point that they were COMPLETELY sold-out by Friday evening, like these supplies were going to be unavailable for another month or something. Guess what? We got rain instead of snow (for the most part); but there was DEFINITELY a "run on the stock market" (grocery stores), that was NOTHING more than the product of an INCORRECT PREDICTION.

IMHO, the Stock Market all-too-often behaves like the panicky shoppers, where the predictions quickly become self-fulfilling-prophecies "just because".

To continue on you meteorologist parallel... Imagine there are not only 1-3 weather guys but a few dozens and they all predict the weather. The general reaction will exhibit some variance but will tend toward the (weighted if some weather guys have higher views) mean of the predictions. That is an even more accurate description of the stock market, especially now when everyone and their mom can start a Wordpress blog and become financial analysts. For sure some have higher popularity and credibility and might effect the stock price more (see Elon's 420 Tesla tweet), but the general noise is just too much. The predictions made by analysts are fairly accurate, although not so precise.

Some interesting reading on this topic: https://en.wikipedia.org/wiki/Prediction_market

The panic or self-fulfilling topic is interesting, as there is historical evidence in form of momentum/trend factors (purely statistical phenomena's of panic and hope), but at the same time the assumption that any predictable pattern will be exploited until it disappears. An other thing to factor in is Exchange Traded Funds tracking indices such as SP or Nasdaq, this might actually increase the deviations due to news as they are not actively participating.

Anyhow, interesting discussion.

 

[I7guy]

This is somehow a reflection of Apple doing well suddenly - or the realistic simple market fluctuation?

No-news news!

When apple stock goes down its Tim Cook’s fault. When apple stock goes up it’s market fluctuations. Go figure.

 

[KPandian1]

When apple stock goes down its Tim Cook’s fault. When apple stock goes up it’s market fluctuations. Go figure.

AAPL is doing well - the course it is on is a combination of Jobs vision and Cook's management.

$175 is a sane target for it to stay at until its next innovation comes in, or the services revenue takes off like iPhone did. $233 was insane.

Both leaders had/have their faults - Cook's errors are in our face now. Easiest example that cost the battery-affected owners each a solid $650-900 dollars in ditching their iPhones because of "dying" phones vs $70.

Bigger, heavier, expensive, fragile and slippery - all the boxes are checked off for iPhone the X-series owners; they are not shy about that.

This year is not an "S" year - hope they bring something new.

PS: I won't blame Cook for the ATV 4K or the HomePod; just the ridiculous software that cripples the HomePod.