Bad excuse. The PC gaming hardware market for example just breached $30 billion and is growing due to rising demand for high end components.
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Apple's Stock Price Projected to Keep Rising on 'iPhone 8' Optimism
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Bad excuse. The PC gaming hardware market for example just breached $30 billion and is growing due to rising demand for high end components.
AAPL is the largest company in the world (or in the top 5 for sure let's say). Such focus on "earnings" growth would appear to be blinding people with your viewpoint. What you say might be correct, that the "market" looks at "earnings growth" as the excuse to hold back AAPL share price from other comparable stocks. This is my point actually. This idea of pinning AAPL to "earnings growth" - I mean really how many percent has their earnings suffered over the last 5 years? A few percent here and there? What about the huge upside growth of "services" and other buzzwords? Without getting to far into it - please tell me what stock or fund is Better than AAPL for a couple million dollars I have to invest? All the "experts" in the last 15 years have shown themselves to be fools over and over and over. I did well by holding and acquiring more AAPL. I am happy that the world is finally seeing the light a bit, but still there are many people with horrible viewpoints on AAPL stock that I just cannot figure out. If only my friends and cousins had listened to me 20 years ago, or 10 years ago or even today. Only one of my friends in Japan listened back in the late 90's and he does thank me every time we get together - he is still holding too and it really made a difference in his life.
If you bet against AAPL now, you will regret it - that's my main message to send out there to everyone.
I challenge you to please point out what stock is safer and will provide decent upside.
Please tell me ________ is the stock that is "better" than AAPL. I'll look into it respectfully, believe me
AAPL might not be tripling up in the next 10 years, but who knows really for sure? I certainly do know that it cannot go down below $60.00. So that's your down side. Look at the down side for many other companies - some that I like, but just can't get over the horrible fundamentals.
You just can't lose (much) with AAPL. That's the key for me and I have been rewarded very well for holding AAPL - you can't lose - it's safer than anything else out there. Please show me how I could be wrong because I have all my eggs in one basket, and have had them there for a long long time.
Stock pricing is all about earnings growth. Please don't overlook the word after earnings, it's the key. This in the end is all investors care about (and the only thing they should care about), so pretend it isn't important at your own peril.
I've been in AAPL since 1997, so you don't have to preach to me about it. But in the end I consider myself more lucky than smart. I also understand the risks not only in being heavily into AAPL but also with being overweighted in any one stock, as I am still, despite a longterm effort to unwind this position. The proceeds are going into ETFs.
To repeat the advice I already stated above, most small investors should not be in individual stocks. If I was just starting my investing I would put at least 10% of my income every year into ETFs, market up, market down. Every year. Do that for 30 years and you can easily retire with a million or more, and with much less risk than trying to outguess the markets.
Thanks for the response.
I think it is a mistake to base valuations "all about earnings growth". I think there is more to it than earnings growth. Surely you must also know that and agree?
I find it difficult to believe that the markets will want to go back to a P/E ratio of 10 for example - those days should be gone for good for AAPL. Icahn talked about it 2 years ago and was right. I do not like Buffet, but he knows "value" when he sees it an of course I agree with his decision to buy into AAPL. Of course the markets are not always rational, everyone has their own way of looking at things and with all these technical trader guys talking about "head and shoulders" and "Elliot Waves" - I guess it should not surprise me that the majority of people will not happen to agree with my own views. Hey, there might even be someone who made more money than me using some bad methods for picking stocks such as technical analysis. It truly is a casino that way. You can have self-fulfilling prophesies in the markets that are fundamentally daft, but you can't argue with the free market.
In a world full of lies and propaganda and investors who may also have an incorrect "world view" anything can happen, and me complaining about it doesn't change things and doesn't help. In fact the dim view taken by so many "analysts" about AAPL is just one example in life that I have been able to profit from. Just imagine if you took the advice of a character like "Steve Balmer" of Microsoft 10 years ago. So many billionaires have been completely absolutely wrong about so many things.
Having said all this stuff, when the largest company in the world with the biggest earnings in the world still shows growth approaching double digits, and that company is one of the top brands of the world and has invented one of the most essential products that transformed the world over the last 10 years and they are getting 40% margins on the sales of these "essential for life" products and has more cash on hand than all the others and is managed so well, and takes the high road on almost all things, it's just an amazing company. It may be unstoppable.
Again - if you can name a stock that is better than AAPL, let me know here. I do not think you can name a better stock for the guy who has a million dollars and wants to invest it in the stock market. Dividends, undervalued, limited downside risk (limited to about 50% loss of your investment currently, and that can only happen if there is an armageddon), huge growth in new sectors of the company business (i.e.: services), a proven track record, happy customers. The future is very bright for AAPL
A mistake, eh? You've cited PE several times now. So what then does the "E" stand for in that ratio? If you know of a better and more fundamental way of understanding what is going on with a stock, then what is it?
Whether markets are "rational" or not is completely beside the point. What they do is price in every known hope, expectation, and fear, and they do it on a continual, ongoing basis, every second of every trading day. That is their sole function. If you think you know more than the markets do about what you should hope, expect or fear, then that's pure self-deception.
You may even manage to win a few of those bets, but only if you are lucky. The smart money knows the difference between luck and skill. Even the most seasoned investors, people who get paid to pick stocks, have a difficult time beating market averages consistently. Individuals, almost never. The vast majority, even of the pros, underperform the market averages and engage in a lot of unnecessary risk to get there.
If you think that AAPL isn't risky, then I wonder what you make of the recent fall of 30%, from which it took two years to climb out. It takes a cast iron stomach to invest that way, especially if you are only investing in one stock and/or are in the position where you might want access to your returns some time soon. Most people don't have cast iron stomachs, and most people should not even think they do.
I have said what I think individual investors ought to be buying several times already. I don't think I should have to repeat it again, but trying to outsmart the markets by stock picking is definitely not it.
If you have a million dollars and you use that money to buy a single stock, AAPL or otherwise, you are either a sucker or a gambler. Low cost index funds are a much better choice if you want to make money.
Which gun is the best to shoot yourself in the foot with?
Hey, it's Price to Earnings Ratio, not Price to Earnings Growth Ratio right?
Apple's earnings are monstrous. Please compare to any other stock.
The P/E ratio should be in line with other peer companies on the market...... the stock Price has been too low! That's what P/E tells you. And we are not talking about Amazon's P/E of 80. No. We are talking about Apple shares earning 9 dollars and the price was hovering around $100 for the longest time. For people who failed to see that Apple was a "no brainer" bargain months ago, and who still fail to see the value with P/E something like 14 or 15 right now, when it should be at least P/E 17 - well, maybe there is no hope for people who do not see the value there. Just on P/E alone.
Earnings growth is nice to see and is extremely important for most stocks, but do you really think the largest company in the world should have double digit earnings growth? (Apple might nearly do it!). If Apple does get 10% or higher earnings growth, wow. You really think Apple can DOUBLE in size in less than 8 years from now? That would be awesome, but I am realistic. Apple is just so incredibly huge, it would be too much to expect that. Is it possible? YES. But I don't need crazy earnings growth at this stage of the company to see that all Apple has to do is keep on trucking
Nobody dares to tell me a stock that is better than AAPL? I mean someone should say Tesla, but compare the risk of Tesla to Apple. I'd buy Tesla, but have not done so because I am so crazy for AAPL stock, but I may buy some TSLA soon because I believe in the company.
Anyway, I never did try to outsmart the world. I just did it with Apple and realized later how dumb the world is. Nearly 30 years later and I am realizing how smart I actually am, I have that confidence now. I totally missed on Microsoft and Ebay, and I guess Amazon and even Facebook at $18.00 a share. I just stuck with AAPL since 1993 - through everything - I bought what I know. All my buddies bought pharmaceutical companies that went broke or junior mining shares with their measly $10,000.00 investments. I stayed clear and bought what I know. AAPL.
Just look at the phones out there - apparently it's 80 or 90% Android! But who makes ALL the profits in phones and apps? Apple.
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Wrong.
Just Wrong.
Diversification is how you lose.
Just buy AAPL and you can be sure you will not lose more than 50% within the next few years (As of March 2017).
I put the "Million Dollars" on it to stir the imagination, and to be real. What do you buy?
Let me illustrate a bit. If the DOW crashes hard because of some catastrophe, do you think AAPL stock will follow in line? No - it won't and probably cannot. If it goes below $65.00 a share it's nearly below liquid asset value. How are your mutual funds run by suits going to do? Any idea on that?
Do you buy Gold? Maybe someday, but putting a Million Bucks in the GLD should only be done if you think the USD is going to crash, which it eventually could (hyperinflation).
How about Amazon, Netflix, Facebook? You like those P/E ratio's? love the companies but - RISKY
How about some mining company or oil stock or whatever. how about CAT? I mean there are companies out there, but they all seem RISKY compared to Apple. Keep in mind I do not know much about other sectors - I refused to care about the future of Panera Bread as a stock for example. That's for fools IMHO. Cramer knows lots of stuff and I watch him when I can, but all the companies he talks about have a recurring message for me - RISKY when compared to AAPL
If you still can't see it "Mark My Words" - in fact go search my previous boasts about AAPL from 10 or more years ago here - you'll see I am trying to help you see the light. AAPL is the only stock.
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Hey, at least you are finally acknowledging that earnings matter in some way. I will call that progress.
PE is a trailing indicator, based on the last four quarters of earnings. If you set that number along side the projected earnings growth rate, you get PEG, which provides an indicator of whether anticipated future growth justifies the current PE. Stock markets bid up PE on expectations earnings growth. They bid PE down when the opposite happens. You seem to be arguing that it should not be that way. This is howling at the moon and then howling at it some more because the moon refused to listen the first time. Good luck with that.
For AAPL to sustain a PE of 15, the company will have to report earnings growth of around 15% in the coming year. If they report better rates of growth, a higher PE might be justified and the stock will rise. If they report less, PE will compress and the stock will fall. Maybe they can pull that off, maybe not. All I can say is the market thinks they can. Again you can argue all day and night long how this should not be true, but that doesn't change anything about how it works.
Comparing PE for any one company with the PE for a market sector and drawing any firm conclusions is a dangerous business. This is especially true for a company as gigantic as Apple and one that is so highly dependent on one product. Time and again we've seen the effects of declines in earnings on the stock price.
I've said it three times now, you are asking the wrong question. You might as well ask about the shortest way to walk to Hawaii. There is no shortest way to walk to Hawaii, because you can't walk to Hawaii.
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The loaded gun, obviously.
Ya know, I bought AAPL 20 years ago and I've done remarkably well, mainly because I've been able to avert my eyes from the many collapses in the stock price over that time, and because I had other investments was financially able to tough it out. But I am fully prepared to admit, attest and affirm that I was damned lucky. I did not really know anything the markets did not know, I just guessed right. I might as well have picked a winning number on a roulette wheel for all the skill it required. From here on in, it's all ETFs for me. Boring, steady returns with no guesswork.
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Hey, at least you are finally acknowledging that earnings matter in some way. I will call that progress.
PE is a trailing indicator, based on the last four quarters of earnings. If you set that number along side the projected earnings growth rate, you get PEG, which provides an indicator of whether anticipated future growth justifies the current PE. Stock markets bid up PE on expectations earnings growth. They bid PE down when the opposite happens. You seem to be arguing that it should not be that way. This is howling at the moon and then howling at it some more because the moon refused to listen the first time. Good luck with that.
For AAPL to sustain a PE of 15, the company will have to report earnings growth of around 15% in the coming year. If they report better rates of growth, a higher PE might be justified and the stock will rise. If they report less, PE will compress and the stock will fall. Maybe they can pull that off, maybe not. All I can say is the market thinks they can. Again you can argue all day and night long how this should not be true, but that doesn't change anything about how it works.
Comparing PE for any one company with the PE for a market sector and drawing any firm conclusions is a dangerous business. This is especially true for a company as gigantic as Apple and one that is so highly dependent on one product. Time and again we've seen the effects of declines in earnings on the stock price.
I've said it three times now, you are asking the wrong question. You might as well ask about the shortest way to walk to Hawaii. There is no shortest way to walk to Hawaii, because you can't walk to Hawaii.
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The loaded gun, obviously.
Ya know, I bought AAPL 20 years ago and I've done remarkably well, mainly because I've been able to avert my eyes from the many collapses in the stock price over that time, and because I had other investments was financially able to tough it out. But I am fully prepared to admit, attest and affirm that I was damned lucky. I did not really know anything the markets did not know, I just guessed right. I might as well have picked a winning number on a roulette wheel for all the skill it required. From here on in, it's all ETFs for me. Boring, steady returns with no guesswork.
Thanks for taking time to reply to my post because I learned some stuff from what you say, and I genuinely appreciate it.
PEG is something I will study a bit more because of your good advice.
I still do not think I completely agree with what you say on a few points, but I think we are both into our own thing and satisfied with it. I hope I brought at least something interesting for you to thing about. You did that for me, so thanks again.
I always enjoy discussing this topic with people who take it seriously and want to know more. If you're interested in following up on the ETF point, here is a good starting place:
http://www.investopedia.com/articles/mutualfund/07/etf-portfolio.asp
For more depth, look up "Modern Portfolio Theory."
Well, this took me 3 seconds to google. Feel free to do more research on your own.
https://www.philanthropy.com/article/After-Steve-Jobs-Apple-Steps/228899