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Apple Share Price Hits $600, Just One Month After Hitting $500
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I got interested in this just while ago, when the Euro crisis has made life quite miserable here.
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Given their earnings it is not really out of line. Apple has been seriously undervalued the past 10 years.
It is just now getting to a point where the stock is inline with earnings.
djdover said:
Given their earnings it is not really out of line. Apple has been seriously undervalued the past 10 years.
It is just now getting to a point where the stock is inline with earnings.
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That is a lot of words to be so wrong.
Investing in seriously underpriced stocks is an investment steategy. Apple has been MASSIVELY under priced for the last five years.
You have no business giving financial advice or berating others for their opinions.
Avatar74 said:I'm still kicking myself for not buying stock when it was less than $200 ...
It's as I told a close friend yesterday, buying AAPL is not an investment strategy. There are two important words there: "investment" and "strategy".
Investment requires active research, and making decisions not based on speculative plays but a sound analysis of the value of the asset being acquired. Hearing about a company as ubiquitous as Apple and then jumping on board on the assumption that it'll keep going up (remember the housing market?) is not investing.
If all of Apple's enterprise were struck by a meteor tomorrow and wiped off the face of the planet, would the average Apple speculator be well insulated from that catastrophe in the rest of their portfolio. Would their "sit and presume infinite growth" tack work with the broader market?
If the answer to questions like these is "no" then whatever else you want to call it, it's not investing, and it's not a strategy.
Spend less time beating yourself up for "shoulda, woulda, coulda" on a company that could have just as easily gone the other way... and start beefing up your knowledge of investing, and insulate yourself against potential catastrophic loss. THAT, and not consistent huge wins, is what will growth your wealth tremendously in the long term.
Chasing unsustainable returns is a sure fire way to expose your principal to risk of loss... and that kind of loss compounds over time. I don't miss the AAPL boat because I have much more stable long term investments that are actually providing pretty stellar returns, very close to Apple's.... but without the volatility of the umpteen zillion speculators who are all sitting and hoping with their eyes closed and ears shut.
I'm not saying that Apple will do terribly, but Apple's book value is well below 600 dollars per share. So the difference is owing entirely to speculation on where they will go in the future. That works perfectly as long as Apple keeps producing double digit growth infinitely... but its the "infinitely" part that is a statistical impossibility. Growth rates have to shrink at that scale because a) Apple is gaining share of wallet much faster than the number of wallets or size of wallets is increasing, and b) Apple has to produce exponentially more marginal revenue each quarter just to maintain the same growth rate mathematically.
And then there's the Steve factor... any time a business's image and success are so inextricably tied to an iconic figure you cannot top that. No one will ever take the reins of Apple with a greater vested interest than Steve had. No visionary of Steve's caliber will prefer to work for Apple over starting his own company.
A shrewd investor is like a good hockey player... skate to where the puck is going next, not to where it is now.
That is a lot of words to be so wrong.
Investing in seriously underpriced stocks is an investment steategy. Apple has been MASSIVELY under priced for the last five years.
You have no business giving financial advice or berating others for their opinions.
Undervalued and overvalued stocks are phantoms. They are best hunted in the dead of night with cloves of garlic and wooden stakes. If you seriously believe that AAPL has been undervalued in recent years then surely you believed that it was overvalued as recently as five years ago, when the PE was over 100 for a long period. That of course would have been the time to stay away. Right?
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http://finance.yahoo.com/q/ta?s=NOK+Basic+Tech.+Analysis&t=5y
Looks like a winner to me!
That is out of control! And they haven't even released much new software of Macs yet this year. They are blazing away! It will probably be $700 by the time the iPhone 5's hit shelves!
I think it this way:
If Windows Nokia phones will start selling, Price is going to rise
If they (E)flop totally, they probably gotta release Android series and I think that would mean about 1000% increase quite quickly
Their build quality is superior compared on HTC or Samsung, for example the Symbian OS Nokia E7 and E8 are quite impressive when you hold them. And the PureView 41 megapixel camera tech is something that I personally would like to have on my pocket...
And they have largest market share still on the developing countries and those people cannot afford in years to buy iOS devices in mass volumes...
I think it this way:
If Windows Nokia phones will start selling, Price is going to rise
If they (E)flop totally, they probably gotta release Android series and I think that would mean about 1000% increase quite quickly
Their build quality is superior compared on HTC or Samsung, for example the Symbian OS Nokia E7 and E8 are quite impressive when you hold them. And the PureView 41 megapixel camera tech is something that I personally would like to have on my pocket...
And they have largest market share still on the developing countries and those people cannot afford in years to buy iOS devices in mass volumes...
No thanks, but you are welcome to take a chance. Won't say miracles can't happen, since I took a chance on AAPL in 1997 and that did pretty well. But at least they had Steve Jobs.
Yes they had and now they dont... Tim Cook wont come up with such ideas that Steve did. Mumbling about post-pc era.. yeah right. Pro work with ARM cpu's iCloud not gonna happen.
But, then again perhaps Apple just leaves the Pro working for Windows-8 users in the future. That would eat Apple away like cancer.
Miracles always happen but to whom, we will see.
We shouldn't under estimate Microsoft either. They will pull it off eventually and keep their 80-90 % of PC's and probably will get some good peace of tablets too.
But if Nokia wont sell other OS's than Win8 that will be a big problem.
What exactly do you think I mean when I say "underpriced"? And what do you think "underpriced" means? Note that these are two different questions.
The last sentence is just ad hominem. I'm a business analyst by profession with nearly 20 years experience. I deal not with market chartistry but analyzing actual inputs that affect sales forecasts at the executive level for a $20 billion dollar software manufacturer with 50 million customers. Yep, I have no idea what I'm doing. The armchair analysts at Seeking Alpha are the real experts. And my Harvard grad buddy, SVP Operations at a private equity firm with over $3.5 billion in capital commitments... yeah, he's a total idiot when he tells me that my methods of triangulation of enterprise value match those of M&A consultants....
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I am humbled, sir, by your obviously superior knowledge of cosmology.
I bow before you with respect, and retract my ignorant assertion.
Really, nice going, great point. Don't I feel dopey...
The bubble will burst one day, I can't see the world having enough money to keep increasing it's stock value! And I'm ********d if my taxes will pay for it lol! (Yes I know my taxes won't pay for Apple shares).
Whats the record for the highest share price ever?
Whats the record for the highest share price ever?
It's possible that Graham was influenced by Markowitz... or the other way around since Markowitz was maybe seven years old when Graham and Dodd published Security Analysis.
But Markowitz is taking a more probabilistic/microeconomic approach, whereas Graham and Dodd were focused on the financial analytics... which is more my area. I'm not a micro- or macro- guy. I professionally handle sales and revenue pipeline forecasting and analysis.
That said, your point about returns and their cost is right... someone else here said, and I'll just incorporate my response here to save space, that I'm passing up on some tremendous returns in favor of the illusion of security.
Well he can call it the illusion of security... I call it simply exposing less of my capital to risk because I already have significant capital, I make good money so I continue to have steady capital coming in, and therefore I'm in no hurry to pursue an unrealistic short term return. Instead, my preservation of principal leads to much larger compounded returns than the wildly speculative investor because every dollar of principal they periodically wipe out is PV * (1+r)^nt dollars in future value they've obliterated.
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Pulleeeeze. It's because of your great analysis that you missed the entire run in aapl. You're not alone. There's a clown named Ed Zabitsky who's been short for the last several hundred points. Comes on cnbc every once in a while for comic relief. One investor I know just rolled his severely aapl overweighted portfolio into 8 figures. Guess he ignored Graham.
If you don't know what you're talking about you'd be better off not letting everyone know it.
I purchased 6000 shares of AAPL at 18.75. I sold at 340. What'd I miss?
Edit: What I'm trying to say here is that price and value are both moving targets. They don't move in concert with one another. There are several times in the last three or four years that Apple's intrinsic value has exceeded its price (a buy opportunity)... but you can do all the armchair analysis of past performance you want. Could the average person look at my portfolio and decide there and then which stocks to hold on to and which to dispose of? I bet not. I don't think that the average person would have thought at $18.75 that Apple might someday hit $600. I didn't, but I did just fine. And then I moved on to other securities that turned out pretty sufficient returns. I also participated in an IPO in the 1990s that returned 500% in one day... So what? Does that mean that I should think that 500% is a realistic short term return?
But given my income and my financial habits, I'm in no hurry to dispose of any of my acquired securities... If you're taking gambles, you're going to skittishly sell before the next AAPL hits that $600 mark. Way before. How many people have that foresight?
And I'm not saying this with no knowledge of the business either. I wrote a proposal on internet music distribution in the mid 90s. In the process of developing that thesis, I spoke with key industry people including Dave DeMers of Soundscan, who went on to head CBS A&R and then Sony/BMG A&R. I was right there... But that was almost 20 years ago. I'm on to the next thing already... and I'm currently making returns that don't make me sad that I had disposed of my six thousand shares of Apple at $340.
*shrug*
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Idiot. Douche Bank did not sell all it's aapl, it simply removed it from its short term strong buy list because it hit 600. DB has involved itself in similar games in the past.
Oh, brother. Careful, you might hurt yourself when you fall off that high-horse.
I'm a plenty inexperienced investor and know it. That's how I know NOT to pull my money out of my 401K and plunk it down on Apple stock. Also, since this is not an investment forum I pretty sure most of the readers are not experienced investors. I'm not sure why you think I'm giving advice to experienced investors.
I'm just telling people: don't get too excited by this news and put a lot of money into Apple stock. When amateurs pick stocks on their own they loose more often than they win, especially when chasing headlines. Of course I don't know if Apple stock will be, e.g., above $800 or below $400 a year from now nor which is more likely. My point is that hardly anyone else on this forum does either.
If your deep experience has led you to a different conclusion then, please, enlighten us. Just try to bite off my main point rather than nibbling at my feet.
So. Just to be clear. 1) How many shares purchased when? 2) How many did you ride down from @200 to @78? How many from $78 back to $200? 3) You kept all of your original purchase, without adding or decreasing, and dumped it all at $340?
Ignatius is a seasoned investor and knows whereof he speaks. You know your limitations, and act accordingly, which is smart. You're also correct that no one should take any investment advice they read on Macrumors (or on Seeking Alpha 99% of the time). If you see investment advice here, the best thing to do is ignore it.
1. 6000 around 2000-ish.
2. All of it.
3. All of it.
I don't think I clearly explained my philosophy before, because you're still thinking as if I've said Apple was always a bad investment. That's not the case.
I'm championing the acquisition of assets at a fraction of their working capital.... this is the same strategy that propelled the fortunes of Warren Buffett, Walter Schloss, Jean-Marie Eviellard, Charlie Munger, George Soros, Stan Perlmeter, among others... these are all billionaires.
What I'm saying is that at this particular moment, Apple is overpriced. But that may not always be so. The market could tumble and present you with an opportunity even while Apple's operating results are unchanged but the market in general has taken a beating. That isn't the case at this moment. When Apple was at $386 a share some months back, however, it was. And it has been many times... but if AAPL is the only thing you have in your arsenal then you really haven't been looking around. Because I've done equally well with many other investments.
The returns I generate are atypical. If I were a money manager or a stock broker, I would not consider it ethical to suggest or even remotely imply that my returns are consistently attainable in the long run. but they don't have to be. Over time, smaller, sustainable returns compound... while protecting principal. This is critical to snowballing your overall multi-year return. There's reasons why brokers, advisors and money managers tell you that past performance doesn't predict future returns, and that every gain is at your own risk... because most of them aren't in a position of enough intellect to guarantee you anything. If they were, they wouldn't be doing business with you. Lee Kopp was one such person. My uncle did a few business deals with him. Kopp has a firm but he doesn't personally advise anyone with less than $30-40 million in investible capital. why? Because his expertise is worth more than your average Street analyst. Same with Tilson Funds.
But I'm going to put a point upon it: The total return for Berkshire, despite every naysayer who has thought since 1964 that Graham's methods were outdated, is about 185,000 percent, or 19-21% compounded annually for 40 years... a feat not even matched by the S&P. My rule of thumb? If you can't beat the S&P year over year, you might as well stick 75% of your cash in an S&P index fund and sit on it. Alternatively, you can evaluate the enterprise value of every company you're considering for acquisition (treat it as if you were going to acquire the company whole; take it seriously as a business)... but that requires some knowledge of interpretation of financial statements, accounting rules, and general business. So it's not for everyone... even among those who are in the profession, very few can consistently beat the S&P. Case in point: I keep a considerable portion of my portfolio in S&P index funds and ETFs.
Most people do not do the kind of research I do into the underlying business... and I don't even do that much. But the point here is threefold: A) I only hunt for winners... i.e. companies whose operating results are fantastic given the resources that they have available to them, B) that they have done so while minimizing risk, which may include deleveraging level 3 asset risk and maintaining a very low debt to equity ratio, and c) dispassionately waiting for only the right opportunity to acquire an asset at a fraction of its working capital where the reason for the undervaluation is not due to the operating results of the company but other temporary factors such as a general downtrend in the market.
What I'm saying regarding Apple is, once again, not that they are never or were never a good investment, but at $600 a share, they are not at this moment in a window of underpriced opportunity.
If you want me to share with you all the math behind it, send me a message and I'll break it down in detail. It's not rocket science... but you probably need to have some basic finance background at a college level to be familiar with the concepts involved. Or at least a willingness to research them on your own so I'm not just pelting you with data...
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Some people have pointed at this as an example of "the sky's the limit" but keep in mind.... Berkshire Class A Common has never split since Buffett's partnerships acquired the company in 1964. There are roughly 1.5 million shares of BRK-A.
By comparison, Apple has 923 million shares outstanding. Berkshire trades at around 2 times its book value. Apple trades at several times its book value. The refusal to split Berkshire's Class A common voting shares is what has protected it from speculative volatility, so the low transaction volume is due partly to the high barrier to entry, which is a good thing if you are a true investor seeking long term sustainable rates of return that will compound (read: snowball) over time.
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