Apple's Market Value Hits $2 Trillion

[tillsbury]

Nope, i don't understand how stocks work and if I did I wouldn't have asked my original question. Apple's customer's who spent more during the pandemic...remember we are only 5 months into the pandemic, things were pretty normal in February only by March things started to change. The real effect of it is going to hit by next January if things continue in this road, when people have been out of jobs for 6-9 months.

and they are trading 33x the earnings, do you mean that if I bought all of Apple I will have to wait 33 years to cover my initial investment before i actually start getting richer?

Depends on what you mean by “cover my investment”. if you bought all of Apple, and earnings remained the same, then you would have earned the total you spent on the company. But you would also still own all of Apple, so you‘d be very considerably richer than at the start, by an entire Apple.

Same as if you bought a rental property for 33x net rental return (which would be a bit expensive, but...) After 33 years the property would have paid you all the money back, but you’d still be up by the property itself.

 

[tillsbury]

How they are excellent to their customers? They abuse their privacy, sell them to 3rd parties, track you around the internet...

you missed the point of the post. That’s how they treat their product. Their customers are the ones paying for the data and advertising space, and they treat them very well.

 

[SuperCachetes]

Depends on what you mean by “cover my investment”. if you bought all of Apple, and earnings remained the same, then you would have earned the total you spent on the company. But you would also still own all of Apple, so you‘d be very considerably richer than at the start, by an entire Apple.

Same as if you bought a rental property for 33x net rental return (which would be a bit expensive, but...) After 33 years the property would have paid you all the money back, but you’d still be up by the property itself.

Huh? EPS is a metric that is simply the net earnings of the company divided by the number of outstanding shares. It has no direct impact on what someone who holds the shares gains or loses. Instead of digging the hole deeper and bringing in increasingly more irrelevant analogies, why doesn’t anybody just wiki this stuff?

https://www.investopedia.com/terms/e/eps.asp

 

[MacBH928]

To be fair, facebook is excellent to its customers. It’s just that we aren’t the customers.

Seems like the point that that post implied is that those aren't the actual Facebook customers.

you missed the point of the post. That’s how they treat their product. Their customers are the ones paying for the data and advertising space, and they treat them very well.

aha...my apologies to @cmaier , I ignored how their business model works. I thought he meant their "users" are happy to exchange data/privacy for the free social-connecting services, and we-who chose not to make that exchange-are not the customers they are going after.

 

[rafark]

I only wish I were old enough to buy stock when it was affordable.

You’re young enough to buy stock of the companies of the future! Apple is in its prime right now but eventually some new company will take over.

 

[MacBH928]

Depends on what you mean by “cover my investment”. if you bought all of Apple, and earnings remained the same, then you would have earned the total you spent on the company. But you would also still own all of Apple, so you‘d be very considerably richer than at the start, by an entire Apple.

Same as if you bought a rental property for 33x net rental return (which would be a bit expensive, but...) After 33 years the property would have paid you all the money back, but you’d still be up by the property itself.

Yeah you are right, but this means that any business that makes 20% profit is better investment than Apple because that means I will double my net worth in 5 years time meanwhile it will take 33 with Apple.

 

[MacBH928]

1. Personally I think you are right about things getting darker before it's all over. That said, sales and earnings are only indirectly related to a stock's performance. Stock prices are based on demand, period. You are trying to apply logic to the market, and you can't. What I can tell you is the same as you can hear from many others with both more and less experience than me: Apple is a solid company that has built an ecosystem that people love, and once they are in that ecosystem they tend to spend money in it. For every bitter butterfly-keyboard-axe-to-grind, there are 10 new customers buying their first iPhone or Mac. With Apple Silicon and 5G phones on the horizon, it isn't wise to bet against Apple in the short/medium term. That mentality is being factored into the price of AAPL in real time, pandemic or not.

2. Yeah, you really don't understand stocks. Not judging, but earnings per share are only one metric with nothing to do with how your stock purchase will perform. The share prices do what they do, and we can take a company's earnings, put them into an equation, and come up with a number that is a sortof benchmark - but one that is completely beholden to the share price, which, again, is driven strictly by demand. Look at something like TSLA, which has doubled twice since the spring. They've surprised people with being more solvent than expected here and there, but no way have their earnings quadrupled since March. If you believe in a company (and maybe more importantly, if you think many others believe in the company), buy into it. To directly answer your question another way - in the case of AAPL, the earnings per share number is about to be reduced to roughly 1/4 of what it is now due to the split - no one is complaining about that, I assure you.

I know stock price is related to demand, but demand should be related to profit or future growth. If I had $100M and an investment will make me a return of 1.5% in profit yearly, I would rather keep my money in the bank. The other thing is that if I believe this company will grow in the future like Amazon shareholders of the past 2 decades.

There is no revelation since last year that shows Apple will grow even further, so those who believe Apple has the potential to grow in 2020 should have believed the same in 2019 and the stock should have been $500 then. What I believe is happening now is that those who bought at $300 sold at $310, so those buying at $310 are hoping to sell for $330, so another would buy at $340 AKA bubble.

A person who bought Apple stock back when they were $50-100, such as you, have nothing to worry about because even if it drops all the way to $101 you still make a profit and not lost a thing on your initial investment.

 

[SuperCachetes]

Yeah you are right, but this means that any business that makes 20% profit is better investment than Apple because that means I will double my net worth in 5 years time meanwhile it will take 33 with Apple.

No. Just no. I don't know what else to tell you. The "33" number means absolutely nothing relative to what you are talking about. You are trying to correlate the stock performance to other metrics, and the market doesn't work like that.

Apple doubled its market cap in two years. Please show me where the EPS doubled since 2018. (FYI it's the first hit on a Google search, and by the way, it didn't double)

I know stock price is related to demand, but demand should be related to profit or future growth. If I had $100M and an investment will make me a return of 1.5% in profit yearly, I would rather keep my money in the bank. The other thing is that if I believe this company will grow in the future like Amazon shareholders of the past 2 decades.

There is no revelation since last year that shows Apple will grow even further, so those who believe Apple has the potential to grow in 2020 should have believed the same in 2019 and the stock should have been $500 then. What I believe is happening now is that those who bought at $300 sold at $310, so those buying at $310 are hoping to sell for $330, so another would buy at $340 AKA bubble.

A person who bought Apple stock back when they were $50-100, such as you, have nothing to worry about because even if it drops all the way to $101 you still make a profit and not lost a thing on your initial investment.

Besides theorizing in haphazard circles, you're pointing out my specific case as if I were bragging, which I'm not. If YOU had bought Apple in 2015, you'd be up 4.4x by now. That's 2.5x what the DJIA did. So throw hypothetical interest rates around all you like; I'm not sure what bearing they have. But if Apple stock is a "bubble," it's one that's been inflating for nearly 20 years.

Buy whatever you believe in, but if you leave your money "in the bank" you will miss out. Personally I think Apple is still a good choice, and if I wasn't already holding 50% of my retirement in it, I'd buy more too.

 

[lederermc]

and definitely not worth 2 trillion

It is only is worth what others are willing to pay for it. Apparently you are wrong.

 

[MacBH928]

Neither of us said anything that was forward looking. Your question was backwards looking:

I just assumed people investment ideology is based on buy now in the hopes it grows more in the future or based on return on investment (P/E)...at least thats what people do when buying a business or real estate in non shares form. I guess then in the stock market sell what people demand, and their demand is illogical...like $500 fashion designer shirt just because it caries name "xxx" on it mean while and exact shirt can be replicated for $10. I just assumed people are more careful with their thousands of money(or tens of millions).

That P/E Ration (1000+) is ludicrous. I won't touch it with a 10 foot pole. Even Musk tweeted it was over valued.

 

[MacBH928]

It is only is worth what others are willing to pay for it. Apparently you are wrong.

not really, in Tulip Mania a bubble was so huge it is said that a single tulip raised to the price of a house. Surely no flower will equal the price of a house. This is also exactly what happened in 2008, people kept buying real estate and rising prices until they defaulted on their loans and those who were stuck with real estate property saw the prices plummeted 20-30%. Thats a lose of $200K on a $1M property of the average joe.