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Apple Shares Continue to Surge as Record-Breaking Market Cap Passes $720 Billion
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Congratulations on your wisdom, especially in the dark days of the early 2000's, when Apple got the cash infusion from MS. During the not quite as dark days of 2012-2013, it was hard to hold on to that 16:1 ratio, even as my friends (we have an "investing club" at work, where the winner verbally clubs the rest with their investing prowess), and my quote always was (and is): "you only realize a loss when you sell."
I consider myself more lucky than wise, honestly. The investment was made through a traditional broker at the time who called me, rather politely, completely nuts. A couple of suitors were sniffing around at the time, so to me it looked like the downside risk was not huge, or so I thought then. Probably it was greater than I knew. Who made Apple a takeover offer? Sun Microsystems. Oh, how the worm turns.
The cash Apple received from Microsoft (that was also in 1997) is overrated as the piece that turned Apple around. It was Steve and the products that did the deed. At the time they had quite a bit of cash on hand, not that they weren't burning through it pretty quickly.
The only wisdom I can cop to is repressing the urge to try to outguess the markets. I never tried to time swings by buying and selling. I'm positive I would have ended up with less had I done that. Folks will try to convince themselves otherwise, but not me.
they can afford to pay their regular employees a little more. but they don't, and expect them to work long hours and hardly any days off. they hardly get by whats legal. and i don't mean sales people. i mean people who work at the genius bar who fix things you bring in. you realize they get paid about the same as someone who doesn't know that much just selling you something.
Steve's legacy lives as far as creative genius, but Tim Cook has managed better growth from Apple since Jobs' death. Doubt that? Check it out via the charts, or any financial reporting organization.
In fact just today, CNBC was discussing that very fact.
Are millions going to rush out & buy the watch on Day One? Probably not, and Apple isn't hanging the entire company's future on that either. Give it time!
Look at the hugely slumping Android sales this past quarter vs the increase in iOS. No contest & it's going to continue like that especially with Apple's cash reserves to do what they wish.
Millions buying the watch on day one? Hmmm. I don't know. Lines around the block? Yes, I guarantee it. Reports of folks lining up with start at least a week before the release. The iPhone sales are not driven by crazed fanboys. But there are enough of those to swap a release of a new product. This is especially if there is any hint at supply constraints. Or even if there is no hint. There are at least thousands of people in any city who will want to have it first. They will show up and get online.
If there is no supply constraint, then I expect a million sold in pre-orders. Easily more.
Can't keep going up. Nothing lasts forever. Has to start falling again at some point once iPhone sales start to level off.
Expect profits to fall dramatically once the tax authorities around the world get their act together and put an end to Apple's worldwide tax avoidance.
Expect profits to fall dramatically once the tax authorities around the world get their act together and put an end to Apple's worldwide tax avoidance.
Apple, particularly from an investment standpoint, has a very rare and unique situation that I believe will be hard to predict. Other companies have had successful cash cow products, but I can't recall many that make as much per unit profit, that people don't mind continuously updating frequently. IE, iPhones. The stock price is purely a function of their iPhone results. I'm struggling with when to sell my shares, I bought in at $380 pre-split. The market cap scares me because a little negative sentiment for any reason can cause a quick selloff, but their business is extremely healthy and is showing no signs of slowing down. There are two things that will eventually put a ceiling to the stock or even cause a massive selloff:
1. Slowdown in iPhone growth.
2. Slowdown in iPhone upgrade cycles.
I think there is still time before these happen, and honestly I'll probably upgrade again in a year and half even though I am perfectly happy with my 6+. BUT I have definitely thought that this may be the first time I decide to hang onto a phone for a little longer than the "normal" 2 years. Especially since they'll keep upgrading the OS.
1. Slowdown in iPhone growth.
2. Slowdown in iPhone upgrade cycles.
I think there is still time before these happen, and honestly I'll probably upgrade again in a year and half even though I am perfectly happy with my 6+. BUT I have definitely thought that this may be the first time I decide to hang onto a phone for a little longer than the "normal" 2 years. Especially since they'll keep upgrading the OS.
In theory, present value of future earnings (what people believe them to be) would be the value of the stock. But, for tech companies in certain volatile sectors, anything beyond 2-3 years is highly speculative, so market sentiment and confidence in the C level team about what happens beyond this rather close horizon plays a huge part in how the stock is priced.
That sentiment may or may not reflect reality. Considering how Apple was priced 18 months ago, I'd say the market has no idea how to price Apple in general.
Wall Street doesn't really understand what differentiates Apple from the rest of their competition, which means that the stock often doesn't reflect the true ability of the company to generate future profits. It reflects this capacity for profits only when they actually materialize (like right now) in a sort of knee jerk reaction which explains the fact that the stock's value doesn't rise in a continuous manner, but in large sweeping fits.
A person who gets Apple could take advantage this market inability to understand it, to actually make a decent amount of money
.who the hell cares.
If the job was that terrible, than nobody would be working there. Its supply and demand, even in the job market.
Also, its not too difficult a job to be an apple retail store employee, even a "genius". Something tells me they are paid ok for the jobs they have.
As for apples share price, i believe i have a pre adjusted price now under $6 a share. I don't think i'll ever sell, unless innovation completely comes to an end......which i dont see anytime soon.
Apple will eventually have a strangle hold on your home ( tv, entertainment, home monitoring, appliances ect.. ), your car and how you interact with it and if apple and the iwatch can get health and wellness all on one page ( errrr, on one device ), than the amount of profit and sales that they will generate......well, it will be absolutely mind boggling
Again, not selling anytime soon.
who the hell cares.
If the job was that terrible, than nobody would be working there. Its supply and demand, even in the job market.
Also, its not too difficult a job to be an apple retail store employee, even a "genius". Something tells me they are paid ok for the jobs they have.
As for apples share price, i believe i have a pre adjusted price now under $6 a share. I don't think i'll ever sell, unless innovation completely comes to an end......which i dont see anytime soon.
Apple will eventually have a strangle hold on your home ( tv, entertainment, home monitoring, appliances ect.. ), your car and how you interact with it and if apple and the iwatch can get health and wellness all on one page ( errrr, on one device ), than the amount of profit and sales that they will generate......well, it will be absolutely mind boggling
Again, not selling anytime soon.
not for me, i enjoy older cars ( i have a 1977 z/28) and like to enjoy spending out of my free time like hiking and mtb i'd rather spend money on camera equipment. apple never did anything for me. they didn't care about their employees ever. so i quit. first hand experience. i found better job and never looked back
Just to make me more depressed,
Can someone work out how much $5,000 of shares are worth today if purchased back in 1997?
Can someone work out how much $5,000 of shares are worth today if purchased back in 1997?
Does Microsoft or bill gates personally still have stocks from the investment made years ago? If so could it be possible Gates made more money from Apple than MS?
In theory, present value of future earnings (what people believe them to be) would be the value of the stock. But, for tech companies in certain volatile sectors, anything beyond 2-3 years is highly speculative, so market sentiment and confidence in the C level team about what happens beyond this rather close horizon plays a huge part in how the stock is priced.
That sentiment may or may not reflect reality. Considering how Apple was priced 18 months ago, I'd say the market has no idea how to price Apple in general.
Wall Street doesn't really understand what differentiates Apple from the rest of their competition, which means that the stock often doesn't reflect the true ability of the company to generate future profits. It reflects this capacity for profits only when they actually materialize (like right now) in a sort of knee jerk reaction which explains the fact that the stock's value doesn't rise in a continuous manner, but in large sweeping fits.
A person who gets Apple could take advantage this market inability to understand it, to actually make a decent amount of money
Sure, but for most companies, predicting anything beyond the next couple of quarters is pretty dicey.
Of course market sentiment plays into stock values, but then sentiment is based on what is known and what is forecasted. Sentiment gets priced into all stocks. When AAPL got pounded a couple years back, it was actually for a perfectly good reason: earnings were declining. The only way you, as an individual investor, can beat sentiment is to hang tough when the ride gets rocky, assuming you think the company is fundamentally sound. It sure doesn't help to blame the markets for "getting it wrong" any more than it helps to howl at the moon.
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It depends when you bought exactly of course, but AAPL could have been had in 1997 for around $15 a share. Your $5,000 translates to around 333 shares. After two, 2:1 splits, and the last 7:1 split, your holding would be 9,325 shares today, worth around $1.16 million.
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No. The Apple shares Microsoft bought in 1997 were restricted, non-voting. The company was required to hold them for five years. Nobody knows for sure of course, but it is generally assumed they were sold as soon as the agreement allowed, in 2002.
I'm just eating it up and wanting MORE - hitting 130..... maybe even 145. Just MAYBE ..... it's gonna be a good year for the overall market All of this reminds me of my economics class back in the 90's. My professor gave us "imaginary money" and told us to purchase stock from any company we wanted to. "Yahoo!" Was too expensive. Exxon was Exxon and Apple was the little computer company that no one took serious. I decided to out all of my imaginary money into Apple and ended up with 100 shares. We learned how to keep track of our shares (buying or narrowing the morning news paper), what to look for and what to expect. Probably some of the best teachings that I've retain to date. Back then, Apple stock was earning/losing pennies at a time but man or man was it mentally fun.
Th question people around me constantly bring up... Is now a good time to purchase? Hmm.
Th question people around me constantly bring up... Is now a good time to purchase? Hmm.
Your stock price=reflect the information in the market is probably the worse investment myth around. There is no perfect information flow (or absence of information flow, a more prevalent form of "information), more like hotspots, freeways, small slow roads and places were certain information doesn't reach at all. The quality of the information itself is highly variable and is timing sensitive.
Even if there were perfect information, the user of this information is not a rational being and investors are not uniform in their motivations, capabilities, history, demos, etc. Investors also harbor all sort of psychological biases (probably dozens) that come into play in how they parse the market.
You talked that Apple earnings slightly declining explained why people had the stock price were it was. Well, that's the problem. One of the first thing learned doing a valuation, is that you should not take current performance as sole measure (or even the biggest measure) of how a company/stock should be valued (too many people do). It may happen that this decrease reflects some major inherent weakness in the company, but that should be the deciding factor, not current earnings.
This is especially the case in a fast moving field like tech and a company with a very particular business model like Apple. An atypical company warrants a much closer examination, which analysts seem way too lazy to actually do.
Interestingly enough, the way Amazon is valued seems completely different than Apple's. They both have some entrenched position (for apple, brand loyalty and ecosystem), yet Amazon gets valued very highly despite not being that profitable and future profitability being constrained by small profit margins and fierce competition on its own turf (like Alibaba). That alone tells you investors are not rational beings. Well, we knew that hey ;-).
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The perfect market that's been a part of the conservative ideology for a very long time, doesn't exist and never has : heavy market distortions are the norm, not the exception. Heavier regulations could smooth some of it, but not all of it.
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Coulda
Woulda
Shoulda
none of your non-investments will make any sense, and it's a spiral into despair if you look at what you could have, would have, or should have done.
Here's how I look at investments:
If an investment is going up, it really doesn't matter when you get on the (proverbial) elevator, it's still going up. If you get on at the bottom, it'll be a fun ride to the top, but no one knows, for sure, where the top is. Those that sold at $119 around Thanksgiving just missed out on $5 of growth. Those that didn't buy at $105 a couple of weeks ago missed out on 18% growth.
If you're looking for that magical stock, start looking at the penny stocks now, and 16 years from now, hope it goes to $800/share. You only have slightly less odds playing PowerBall.
One last thing: Who is to say that, if you get those penny stocks at $8/share, you won't bail when it gets close to $600, then drops to $350?
It's better to invest wisely, than try to be lucky.
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Who cares. I'm more interested in Apple innovating and producing products. Its all great that their stock is doing well, but since I'm not an investor but rather a customer it matters not that apple is beating google in this facet.
They know nothing lasts forever so they are coming up with new products constantly. So it'll keep going up as long as they can keep making great products like the iPhone.
And the taxing changes won't do much difference as it'll effect every big company in a similar way. Apple isn't the only one hoarding cash overseas.
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I think it's kind of a milestone, like the first time when Apple became the highest valued tech company. Now it's twice as much valued as the next company.
Keep this very important difference in mind.
iPhones are subsidized and are usually free or a couple hundred bucks.
The Apple watch will require full payment up front.
This will be a key factor on who is willing to go deeper in to CC debt for a status symbol trinket.
A myth, eh? Somebody recently won a Nobel Prize in Economics for that "myth." Eugene Fama. You might look into that.
FWIW, information doesn't have to be "perfect," it merely has to be what is known. Nether do investors need to be rational and they certainly don't have to be uniform. It's inherent in the nature of auctions that market prices are going to reflect the collective opinion on worth at any given point in time much more nearly than some theory of their value. About the future, everyone is guessing, it being impossible to do anything else.
Declining earnings lead to a declining stock price, invariably. If I need to explain the connection then this is bound to require a more remedial lesson in market basics than I am prepared to supply.
Amazon is not being valued by a completely different system. It's exactly the same one. They continue to push their top line at a massive clip, and to plow those earnings into growing revenues further (the definition of capitalism as it happens). At some point they will need to show where profits come from all this top line growth, and investors it would seem are becoming more nervous about that, bidding the stock sideways over the course of the last year or so.
You might want to cut the "conservative ideology" crap. This doesn't have a single thing to do with what I am saying.
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This is true, especially that last bit. And this comes from someone who has been lucky.
From what I hear on these boards, most people should not be buying individual stocks at all. They should be investing so much every month into a range of ETFs and not trying to guess what today's hot stock is going to be or what the markets are going to do today, tomorrow, next week, or even next year. If a person started that regime when they were 30 they could retire with millions, easily, without needing to hit any jackpots.
I agree. They've been pumping Apple up artificially for years now. AAPL is the linchpin of the derivatives market. The world's artificial economy is floating on Apple stock. It's one giant naked short sale!