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The P/E ratio for a company steadily growing at ~10% should be around 20. A rapidly growing company might warrant a much higher P/E. If I expect your company to be 30x as large in a decade as it is now, then maybe a P/E ratio around 600 makes more sense.

If your company is steady or declining, a lower P/E makes more sense - maybe something around 10.

Apple is at best in the steady 10% growth category. There's a lot of evidence that Apple is going to start contracting, though. They've stopped disclosing sales numbers, because they peaked years ago on most product lines. They've been jacking up prices to maintain revenue, but at some point this strategy will fail and revenue from iPhone and Mac will tumble. The AirPods and Apple Watch are still growing, but for how long? Plus they're much smaller markets and go for much lower prices than the iPhones and Macs that they're supposed to make up for.

Services is another big market for Apple, but their biggest service, the App Store and In-App Purchases, are increasingly under fire for being a monopoly.

Apple's time at the top is coming to an end. Tim Cook milked the brand for a long time, but it's coming to an end.

You are so wrong. The market cap today is 2.12 trillion. The services side alone is a trillion dollar company and the hardware side is as well. It predicted 30% of iPhone user will upgrade when the 5g phones come out. The app store is bs, will never amount to anything.
 
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I started buying Apple stock in the 1980s after Jobs was fired and the stock tanked. I have a publishing company and all my graphic artists used (and still use) Macs, and they would quit before switching to anything else. With that sort of loyalty I figured the stock was worth a lot more than the couple of bucks it was trading for at the time. I've done very well with the stock, and every time my advisor suggests I take some money off the table I say NEVER! Just wish I had bought a lot more.
Great job in sticking with it. I’ve had every advisor try to talk me into de-concentrating my portfolio from Apple (half my portfolio), but I haven’t sold any — only bought more. And I, like you and many others, wish I bought more — but at least we have some!
 
What goes up...must come down. If you are enjoying the run up, pick a spot to take some money off the table.
Good point, but it all depends on your age and financial needs at this moment. If you don’t need the money for 10+ years, why sell now? Of course it could move down, but it could also move up — trying to time the market is impossible (and stressful).
 
Didn't get in until 2007 at a split-adjusted price of $17.1786/share.

2007 was a good year! Buddy and I at work decided the new iPhone thingamabob seemed cool and bought some stock. My current basis is $19.80/share.

Its going to burst...any time now...

You are holding stocks from 1980s and didn't think of selling when Apple plummeted in mid 90s, didn't think of switching to Microsoft stock, didn't sell in mid 2000's when the stock exponentially doubled?

The small bit of Apple stock I bought in 2007 at $200 plummeted to $100 in short order. What do you do, panic and take the loss? Or do you focus on the fundamentals and the potential?

Me, I hung on, and doubled down when it was lower. The bought some more after the 7:1 split. I have never once looked at any of my moves in AAPL as a mistake, and my financial situation now reflects that. Apple may not always have the same rate of growth, but "solid" is the only way I can describe them... the opposite of a bubble. Apple Silicon, 5G phones, Apple TV+, Apple Watch: these are only the things we know about. There's going to be more. Again, Apple doesn't always go up 5% in a day - but I wouldn't bet against them in the long run, and I expect my heirs will probably receive some Apple stock, because I would never sell all of my position.
 
Silly question. If you buy Apple stock now, before the split takes effect... you won’t get the 4x shares right? It’s only for people that owned the stock the day the split was announced right?
 
I don't obsessively follow Netflix or Amazon, so I might be wrong here, but I agree that they're like Apple and way overvalued. They've been doing their thing and have been pretty steady for the past few years. They're done all the growth that they can, and I don't know where there is for them to continue dramatic growth.

I think Amazon should be trading at around 20-30x, not 125x.

Netflix and Apple should probably be around 15-20x, not 81x for Netflix and 33x for Apple.

Tesla is just getting started. They have clear plans to grow their production by 4x over the next 2 years and to continue at an insane rate after that. Elon says that they'll be rolling out FSD to their 1.2M already produced cars in the next 5-10 weeks. He's often too optimistic on timelines, so lets say it's 5-10 months away instead - it doesn't make a difference, really. Either way, we're talking hundreds of times the scale of any other company in this space. These millions of vehicles will each bring in tens of thousands of dollars to Tesla per year - overnight, they'll be bringing in tens of billions of annual pure profit. Add in the fact that they'll be building an extra 2M vehicles per year within two years. Their profits will be in the hundreds of billions per year within four years, with no reason to think it would stop there. A 20x valuation at that time would justify a market cap of over $3T in 4 years (but the fact they're still growing at that time would mean a higher multiple would be justified still.)

Nothing has been seen that will be the size of Tesla. It'll hit a scale several times larger than Standard Oil ever achieved.

Maybe when the Netflix/Amazon bubble pops we'll see it take Tesla down, too, but that'll just be an unrealistically good buying opportunity for Tesla (now is also a great opportunity, too - what else will grow 10x in 4 years?)
Not sure if you’re serious about TSLA...if so, just LOL. Hundreds of billions in profit in 4 years? LOL 🤣😂🤣😂🤣
 
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Silly question. If you buy Apple stock now, before the split takes effect... you won’t get the 4x shares right? It’s only for people that owned the stock the day the split was announced right?
The Board of Directors has also approved a four-for-one stock split to make the stock more accessible to a broader base of investors. Each Apple shareholder of record at the close of business on August 24, 2020 will receive three additional shares for every share held on the record date, and trading will begin on a split-adjusted basis on August 31, 2020.
That is from 9to5mac.com and should answer your question.
Edit: So if you buy shares on 8-24 before the end of business I think you would be a shareholder on record and get the 4 for 1 split.
 
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Silly question. If you buy Apple stock now, before the split takes effect... you won’t get the 4x shares right? It’s only for people that owned the stock the day the split was announced right?

no, there is a date of ownership, it has nothing to do with the day it was announced. Stock splits really don't mean much of anything, but for some reasons, some investors think it does.

Think of it like this, If you have $10,000 to invest today, you can buy 20 shares ( with the stock @ ~$500 a share ). Its the same if you buy the day after the stock split.....you still have $10,000 to invest, but the share price is now going to be $125 a share ( bc its a 4 for 1 stock split ) and you'll be able to purchase 80 shares ( assuming the price of the stock doesnt move too much up or down ). If its confusing, just google what a stock split is. You dont make any more or any less by owning it now or after the stock split ( asuming the stocks price doesnt move all that much that is ).
 
I feel like at this point an asteroid could be hurling towards earth and the DOW Jones would jump up 80 points
Except that nothing even remotely that concerning has happened, despite the media frenzy whose goal is to scare you. Most of us stayed home and ordered food, groceries, ate ice cream, and watched Netflix.

The virus has been bad, no question, but as bad as the media pounded for the last 6 months? Not even close. Bad stuff happens...it’s not always the end of humanity and it’s never the end of business. Business only stops if literally the world is ending.
 
Apple recently announced a four-for-one stock split that will take effect for shareholders of record as of August 24, with split-adjusted trading to begin on August 31.
N00B question: Why won't split-adjusted trading begin on August 25? Say I have 100 shares at the market's close on August 24. What happens if I sell them on August 25?
 
Silly question. If you buy Apple stock now, before the split takes effect... you won’t get the 4x shares right? It’s only for people that owned the stock the day the split was announced right?

First, not a silly question.

if you buy shares by the end of trading on Friday, August 28th, you’ll get the additional shares from the split (unless you buy shares in some kind of private trade). starting Monday, August 31st, shares will trade on a split-adjusted basis.

If you buy shares after August 24th, the additional shares technically go to the previous owner first and then come to you, but from your perspective it will seem like they just come to you.
 
N00B question: Why won't split-adjusted trading begin on August 25? Say I have 100 shares at the market's close on August 24. What happens if I sell them on August 25?

Because the split doesn’t happen until trading ends on August 28th.

If you sell shares (through the exchange) on August 25th, the trade will have a kind of note attached to it meaning your account owes the buyer 3 additional shares (for each 1 you sold) when those new shares get distributed. So when the split happens, the additional shares go to the new owner. The real date that matters is August 28th.
 
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You're gonna regret that car payoff. I sold off 300 shares just before the 7-1 to buy a hot shot car. Didn't care that the dealer was hosing me. It was all play money anyway. Well, that $30k to $35K would be about a $Million now.
It’s fine, some of us didn’t buy the stock, hence didn’t sell any stock hence didn’t enjoy any car. I say, drive it like it was stolen, track days, etc

On a more serious note, the stories of some of the people here investing and holding onto it... hats off.
The kid me of 15 years ago didn’t foresee any of this when I started playing with a few bucks and was just jumping between Apple, Nvidia, ATYT and similar. A $2 increase on a $45 stock price would make me cash out. Dumb af.
 
This has to be the greatest turnaround of an American company in history. I vividly recall back in '97 when Steve Jobs introduced Bill Gates on a big screen behind him as he announced Microsoft's investment of $150 million in non-voting stock. This was done to keep Apple basically from going under at that time. Now, here we are. Amazing.

Its sad, but Apple fans should swallow their pride and thank Gates for keeping Apple around. Sure he did it for PR and because they were fighting the monopoly war at the court, but none the less he did it. Also I find it pretty stupid that Apple was begging for $150M, I mean that number is so low they could have gotten it from any investor or bank given their size.
 
2007 was a good year! Buddy and I at work decided the new iPhone thingamabob seemed cool and bought some stock. My current basis is $19.80/share.



The small bit of Apple stock I bought in 2007 at $200 plummeted to $100 in short order. What do you do, panic and take the loss? Or do you focus on the fundamentals and the potential?

Me, I hung on, and doubled down when it was lower. The bought some more after the 7:1 split. I have never once looked at any of my moves in AAPL as a mistake, and my financial situation now reflects that. Apple may not always have the same rate of growth, but "solid" is the only way I can describe them... the opposite of a bubble. Apple Silicon, 5G phones, Apple TV+, Apple Watch: these are only the things we know about. There's going to be more. Again, Apple doesn't always go up 5% in a day - but I wouldn't bet against them in the long run, and I expect my heirs will probably receive some Apple stock, because I would never sell all of my position.

Well if you bought at $20 you have nothing to worry about because if the stock drops from $500 to $100 you still make 4x in profit. Its people who are buying now at $450-500 that will be in deep trouble if it drops. Apple can't grow into infinite, I just don't see it, in the end there is market saturation. You can't take more money than people already have. A competitor will rise, Apple management will change and will drop the ball, world wide recession will make people abandon the $1000 phone and hold on their Apple products longer or change to more affordable plans.

You bought stocks in 2007 when Jobs was heading the company and for sure back then there was a lot of room to grow even if it drops to a $100, but those who held on to it during Frank Ameli when it was rumored they will go belly up, you are brave especially by not considering the Microsoft stock which was shooting like a rocket.
 
Well if you bought at $20 you have nothing to worry about because if the stock drops from $500 to $100 you still make 4x in profit. Its people who are buying now at $450-500 that will be in deep trouble if it drops. Apple can't grow into infinite, I just don't see it, in the end there is market saturation. You can't take more money than people already have. A competitor will rise, Apple management will change and will drop the ball, world wide recession will make people abandon the $1000 phone and hold on their Apple products longer or change to more affordable plans.

You bought stocks in 2007 when Jobs was heading the company and for sure back then there was a lot of room to grow even if it drops to a $100, but those who held on to it during Frank Ameli when it was rumored they will go belly up, you are brave especially by not considering the Microsoft stock which was shooting like a rocket.

You are correct, I have absolutely no fear of ever losing money on Apple. But the timeline for growth is probably much, much longer than you are thinking. Consider that I, like many others, was learning BASIC on an Apple ][ running software that was licensed from Microsoft nearly 30 years before the iPhone (and my first stock purchase). The point is, both these companies have found ways to broaden their market exponentially, going on 40 years. It isn't just adoption of any one thing, and when there is a risk of saturation, you reinvent/pivot/upgrade to sustain your business. Though the trials and tribulations make for a good story, it's not really rocket science.

I'll stop short of saying anyone should buy AAPL because I obviously have a vested interest - but I don't think someone getting in now has anything company-specific to worry about in the next decade, at the very least. Yes, the stock may drop between now and 2030, but my money is on a stock price that has outpaced the markets in ten years' time.
 
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