Without the X and only first week sales of iPhone 8, now i'm very curious about next quarter for sure.
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Apple Reports 4Q 2017 Results: $10.7B Profit on $52.6B Revenue, 46.7M iPhones
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If it is a one time repatriation holiday, I bet they bring back pretty much all of it. They have $20b in cash and I'd guess only a portion of that amount is needed as capital overseas. All the short and long-term securities aren't really used for anything, I'd guess. Also, based on projections for this coming quarter, the iPhone X is very high margin and they expect to sell tons of it in the coming year. So tidal wave of cash is coming. They could bring back and dividend everything but their $20b in cash and I'm not sure they would be precluded from doing anything they want. In in the next 12 months they could accrue another $50 billion cash.
Of course companies are conservative and safe. And human emotions are such that I'm sure the executives and board are used to the reserves and now feel like having $100b in reserves is a prudent thing to have. So they won't do too big a dividend. But I bet they really have no need for this anymore when you factor in the cash coming through the door every week.
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The effect of dividend and buyback should be about the same, in theory. But I'd like the craziness of a return to shareholders of that kind of money. And since I'm a shareholder as well it would be a nice check to me. And a check is helpful instead of increased stock price which increasingly unbalances my portfolio as a shareholder for a number of years. (In fact I sold about 20% of my holdings last year because of diversification issues in part. (Yep, that wasn't a smart move, but the theory of diversification is right.))
Though of course there are tax implications to a dividend.
Different people are needed at different points in a company’s history. Jobs was right for his era, but he would have been a disaster for the Cook era. Cook is amazing, and has been responsible for most of the achievements of Apple, but not the initial innovation and concept that Jobs provided. Cook has refined the culture and expanded it, and has done as fine a job as any CEO in American history, if not world business history.
He's Eisenhower, not Churchill.
No, ripping off customers would be selling them a phone for the same price as an iPhone and.....
- Getting a vastly inferior processor that gets crushed by the A11 (not future proof).
- Having facial and iris scanning that can be easily fooled by a simple picture (or picture with contact lens).
- Having to wait until 2018 to get an update to Oreo, months after release.
- Having to wait another 6 months for the next version of Android (P), and accepting it’ll be your last update.
- Not getting support after 2 years.
- Telling customers with red-tinted screens to “fix it themselves” by playing with color sliders until the display looks good to you.
- Getting horrible resale value should you wish to sell it and upgrade to a newer phone.
- Putting up with an App ecosystem where developers can’t be bothered to optimize their Apps for more powerful devices or tablets or even to create new high-end Apps to utilize the power in modern processors.
- Vastly inferior service & support should you ever run into issues or need warranty.
That's pretty crazy if you think about it. But miniaturization has its' costs, not to mention what the market is willing to pay.
How does it feel to be so utterly right?Both matter about as much as a picked booger.
Inevitably the inb4 and i told you so DOOMED "Apple fanatics" typically outnumber the actual DOOMED "Apple detractors" by about 500 to 1. It's like you guys can't wait to inundate a thread with ironic "DOOMED" quips... as if they're pithy observations. They're not.
Continued from above: 98% of people think all DOOMED posts should be doomed. This was confirmed by a stringent scientific poll survey conducted 15-20 minutes ago. Poll was sponsored by Leningrad Polytechnika... Go Polar Bears.
So one begat the other. They were so prolific and ridiculous that a group of people love pointing out how wrong they were. And it's not over yet, these people are still wrong quite often.
Spot on excellent quote. I usually disagree with most of your opinions but this one is pretty darn good.
Both types of quotes are lazy, horrible, and useless imo. Neither bring any value to any conversation. Again, imo. Others may differ... especially those who rely on them.
To each his own.Can confirm. I bought the new(est) Mac mini a couple years ago to use as a simple home server.
The performance SUCKSSSSS. I know the speed of the computer itself is not great and I knew that going in. But the disk performance is just horrendous. I'll be replacing the HDD with an SSD as soon as I can find the time.
The current tax holiday proposal is 12%. I don't know yet whether it is proposed as a one-time event but from what I've heard the companion move is not taxing foreign corporate earnings at all. If that holds up the incentives for earning abroad and keeping those earnings there could change a great deal. The perverse impact could end up being encouraging foreign investment, especially if the earnings can be run through tax havens and brought back home tax-free. A sweet deal, if you're a multinational corporation.
In any event, if Apple did have the opportunity to repatriate and decided to import even half of their overseas hoard, they could easily afford to drop a $10/share one-time dividend, or an equivalent buyback (or some combination thereof). In either case, corporations with big overseas earnings would likely increase their U.S. capital investments rates little if at all. The investor class would get virtually all of the benefit. As a member of that class I might mutter a thank you, knowing full well that it's just another wealth-concentration plan being sold to a gullible public as just the opposite.
I've been there. My 2010 Mac mini server was so slow that I almost replaced it with a Hackintosh I had lying around, but the Hackintosh's slowness on an HDD showed me what the true problem was. Swapped out my Mac mini's HDD for an SSD. Actually usable now.
Yep. It wouldn't change Apple's investment in the US because Apple has access to all the cash they want in the U.S. already. Same pretty much goes for all the companies successful enough to have large overseas cash holdings. But investor class would get a bunch of money from these dividends and then, maybe, spend some of it in the U.S. stimulating the economy. More likely the investor class would just take this found money and invest it again. That is almost certainly what I would do. Though maybe I'd buy a new iMac with my "Apple Money".
Spot on excellent quote. I usually disagree with most of your opinions but this one is pretty darn good.
Both types of quotes are lazy, horrible, and useless imo. Neither bring any value to any conversation. Again, imo. Others may differ... especially those who rely on them.
No, you're right. Something new needs to be said, maybe even calling out users who claimed failure directly with quotes of everything they said like Gruber's Claim Chowder. I used to keep a list of these things but it was too much work.
Yep. It wouldn't change Apple's investment in the US because Apple has access to all the cash they want in the U.S. already. Same pretty much goes for all the companies successful enough to have large overseas cash holdings. But investor class would get a bunch of money from these dividends and then, maybe, spend some of it in the U.S. stimulating the economy. More likely the investor class would just take this found money and invest it again. That is almost certainly what I would do. Though maybe I'd buy a new iMac with my "Apple Money".
The way I look at it, if I drink a lot of beer, it's good for the environment, because some of that liquid ends up in the groundwater. I call it the "tinkle-down" theory. Pass me another beer, I am feeling especially altruist today.
Market is always right.
However, if I didn’t think AAPL would go up in the future, I would sell today. I believe everything I hold will go higher and do so at least as fast or faster than the broader Market. More than 75% of my investment portfolios are in index funds.
Markets can also stay irrational longer than most can stay solvent. I am willing to wait for this to play out.
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Buybacks are better for long term value because they retire shares, saves the company money by not having to pay div on the shares they buy back, and they save you and me taxes on dividend income.
Don’t get me wrong, I’m happy to get a check, but that’s a one time thing. Buybacks can increase long term value more significantly. Of course, there are circumstances to everything. Buying back over $170 will have a smaller impact of course.
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Well, sure, future value will be determined by growth in earnings, but that's a different matter from saying a stock is undervalued today. That assumes some special knowledge about the company's future that none or few possess. The markets valuing a company at a current level does not imply that the markets are saying the stock won't go up in the future.
If you are into ETFs (this is all I buy now myself and where all my gains from AAPL are going), then you are no doubt familiar with risk/reward tradeoffs. An appropriately diversified ETF portfolio is intended to maximize reward for a given level of risk. Putting a lot of money into one issue, particularly a volatile one such as AAPL, is taking on a lot of excess risk. I can't preach too much because I am hanging way out on the hairy end of the risk/reward curve myself, perhaps even more than you, because of my large AAPL holding throwing my portfolio way out of balance. I am in steady sell-off mode not because I don't think it will go up in the future, but because the risk (for me) is ridiculously large.
Yes indeed, the markets can stay irrational longer than we can stay solvent. That's a great thought. Anyone who is tempted to try to make money as an amateur stock-trader should write that on a post-it note and stick to their computer screen as a constant reminder.
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I would offer a friendly amendment to this statement: buybacks don't so much retire shares as they file them in the company's bottom drawer. They are authorized to reissue them at any time, and they generally do in the form of options and grants to top execs. I regard them as temporary reversals of dilution. I suspect most public companies do as well.
As for dividends vs. capital gains, they are taxed at the same rate for most people. Though I also recognize the potential tax-planning advantages of capital gains, I don't see them as being very large.
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It has been six months since I posted this hypothetical long-term investment portfolio of AAPL, the four FANQ stocks (Facebook, Amazon, Netflix, Google), Berkshire-Hathaway, and four common index funds. We "purchased" $10K apiece of these on April 30th, 2012, with the exception of Facebook which we bought a year later.
Let's take a look at where these investments stand as of yesterday's close (November 3rd).
If you had shoved the original $100K in AAPL, you'd have $203K today. The company traded places with VOOG, the Vanguard S&P 500 Growth fund. VOOG outperforms the S&P 500 index by about 5% so let's say that AAPL is outperforming the S&P 500 by about 8%.
The days of AAPL's wild stock price growth are over. The stock is behaving like a strong S&P 500 large cap core company and has been for a while.
If you had given it all to Warren Buffett, you'd have $232K. The Wizard of Omaha beats the boys in Cupertino. Amusingly, Berkshire-Hathaway has a position in Apple. Something else in the Berkshire-Hathaway holdings is bringing up the performance.
If you were cautious and just put it all into "Cubes" (QQQ) and trusted the Nasdaq-100, you'd have $228K.
If you had put $25K into each of the four FANG stocks, you'd have $797K, an ROI of +697%.
If you had put all $100K into NFLX, you have $1.7 million.
Just a fun analysis when one considers AAPL has a piece of a diversified investment portfolio. It will be interesting to see where each of these will be in early May 2018.
Disclaimer: via index funds, I am an indirect shareholder of all six companies (AAPL, four FANGs, BRK). I am not a direct shareholder of any of these companies.
Let's take a look at where these investments stand as of yesterday's close (November 3rd).
- NFLX: $170,008 (+1600%)
- FB: $66,021 (+560%, one year less in portfolio)
- AMZN: $48,910 (+389%)
- GOOG: $34,071 (+240%)
- BRKB: $23,211 (+132%)
- QQQ: $22,837 (+128%)
- AAPL: $20,355 (+103%)
- VOOG: $19,792 (+97%)
- IWB: $18,555 (+85%)
- IWM: $18,130 (+81%)
If you had shoved the original $100K in AAPL, you'd have $203K today. The company traded places with VOOG, the Vanguard S&P 500 Growth fund. VOOG outperforms the S&P 500 index by about 5% so let's say that AAPL is outperforming the S&P 500 by about 8%.
The days of AAPL's wild stock price growth are over. The stock is behaving like a strong S&P 500 large cap core company and has been for a while.
If you had given it all to Warren Buffett, you'd have $232K. The Wizard of Omaha beats the boys in Cupertino. Amusingly, Berkshire-Hathaway has a position in Apple. Something else in the Berkshire-Hathaway holdings is bringing up the performance.
If you were cautious and just put it all into "Cubes" (QQQ) and trusted the Nasdaq-100, you'd have $228K.
If you had put $25K into each of the four FANG stocks, you'd have $797K, an ROI of +697%.
If you had put all $100K into NFLX, you have $1.7 million.
Just a fun analysis when one considers AAPL has a piece of a diversified investment portfolio. It will be interesting to see where each of these will be in early May 2018.
Disclaimer: via index funds, I am an indirect shareholder of all six companies (AAPL, four FANGs, BRK). I am not a direct shareholder of any of these companies.
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Interesting, but on a practical basis, a somewhat deceptive exercise. Essentially these stocks were cherry-picked for performance, much of which had already occurred by the time they were picked. For that reason alone, it doesn't reveal much except that hindsight is still 20-20.
The reality of investing is that increasing returns always comes at the price of increased risk, so each and every one of these high-fliers has a downside that by definition is greater than the more conservative choices. The downsides might not be exposed by looking at them during bull markets, but they certainly will be at other times. Investing requires considering what happens in your portfolio not just in up markets, but also in down markets.
By the same token, it's also deceptive to say that VOOG outperforms the S&P 500 by a given percentage. This ETF hasn't been around for long and has never been subjected to a bear market. When this happens, we will see the other side of the risk/return curve of their stock picking.
Price is the price, true enough, but this whole game is finding the stocks that are the most "undervalued" for the long term. Simply, AAPL is one of those. Prices change daily, but value is a broader topic. Warren Buffett made a fortune in PetroChina because he simply looked at the numbers and said, "This is undervalued." Markets don't always price for individual companies, rather they price based on other broader market conditions and good stocks get taken down with them.
AAPL has bought back so many shares (almost $170B worth) that while the shares can be reissued to execs, won't be issued on nearly that scale...AAPL's buyback is a completely different beast because it's so large. They've reduced their share count by a staggering nearly 20% in just about 5 years.
Not sure how much it matters exactly what terminology you use, it is still extremely difficult to find stocks that you know something special about now that the rest of the market will discover later. Even the professional stock-pickers (fund managers) don't have a good track-record in that regard over the long haul.
I bought AAPL 20 years ago but I consider myself damed lucky, not smart. The only smarts I can claim over that time is not getting too swept up in the emotions of the market and selling when I had good personal reasons, and not because I thought the markets were sending me secret messages. The other smart thing I could claim for myself is the knowledge that I am not smart enough to do it again.
I would not choose Buffett as an example. He's one of the few people on the planet who makes his own rain. The moment he takes an interest in a company, whether he becomes an activist investor or not, the perception of that company changes instantly. For sure neither you nor I nor millions of other investors can hope to duplicate the Buffett Affect.
Yes, I know Apple has taken a very large piece of their float off the market. I was really only making the technical point that these shares aren't really retired. They may never reissue more than a modest fraction of them, but over time they will reissue some of it back, sure as shooting.
When Apple buys back shares, it does retire them.
It can, of course, always issue new shares. That's true whether it's bought back shares or not. Even if Apple hadn't bought back (and retired) any shares over the last few years, it would be able to issue billions of new shares.
Stock picking is next to impossible which is why 3/4of my investments are index funds. I totally get it...my point is that there are a few times you can have a small edge and that’s where picking a couple you think can win might be worth the risk.
We might be using different definitions of the word retire, but I would ask how you know those share can't be reissued. I believe they go back into the pool of unissued shares. Don't see why they would not. A company can't issue as many shares as they wish, the number is restricted by their charter and amendments. The total number of shares Apple is authorized to issue, I have no idea. Do you know how to find that number?
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Points taken, with the understanding that these small edges are often illusory. What we're really doing in these instances is voting with the relatively small number of investors who believe that a company's future is better than (or not as bad as) it looks. This is basically what I was doing buying AAPL in 1997. Investor consensus had thrown the shroud over Apple, and not for no reason. At that time they were fielding takeover offers, which seemed to create some downside protection for the money I was risking, but in the end I can't honestly say I was doing more than playing a hunch. Which, if it works out, is not being smarter than the average bear, just luckier.
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