Apple's Stock Price Reaches All-Time High Above $180 After Warren Buffett Praises iPhone Maker

[IJ Reilly]

Actually stocks have historically always gone up for long term investors.

I think what you mean to say here is the rate of return on equities, over time, cannot be beaten by any other investment strategy. Whenever someone makes the argument that investing in the markets is no better than gambling, I tell them to look at a chart for the S&P 500 for the last two decades and tell me where they'd rather put their money.

 

[Falhófnir]

This is all well and good as long as people realise the intrinsic value of the company is a lot less than this, and most of the 'confidence trick' that makes it "worth $900B" is based on the success of a single product...

 

[I7guy]

I think what you mean to say here is the rate of return on equities, over time, cannot be beaten by any other investment strategy. Whenever someone makes the argument that investing in the markets is no better than gambling, I tell them to look at a chart for the S&P 500 for the last two decades and tell me where they'd rather put their money.

Actually the charts since 1927 bear this out.

 

[Baymowe335]

This is all well and good as long as people realise the intrinsic value of the company is a lot less than this, and most of the 'confidence trick' that makes it "worth $900B" is based on the success of a single product...

Kind of like Google’s success being based on advertising or Exxon’s based on oil? A lot of money has been lost trying to stick to that one trick pony narrative.

By the way, ever look at Apple’s other businesses? They aren’t exactly small.

 

[Falhófnir]

Kind of like Google’s success being based on advertising or Exxon’s based on oil? A lot of money has been lost trying to stick to that one trick pony narrative.

By the way, ever look at Apple’s other businesses? They aren’t exactly small.

Exactly like that. The book value of virtually every company is far below it's market cap. I don't know if Apple's BV is published anywhere, but its going to be nowhere near $900B. As much of the "value" is just a confidence trick, when there is a confidence knock, the value will go down - if Apple's cash cow the iPhone starts chronically underperforming then the hundreds of billions of theoretical value will evaporate in an instant. Not a prophecy of doom, but something for investors to be aware of.

 

[IJ Reilly]

Actually the charts since 1927 bear this out.

That too of course. I used 20 years because the returns are readily apparent over the much shorter time periods that will be relevant to today's investors.

 

[Baymowe335]

Exactly like that. The book value of virtually every company is far below it's market cap. I don't know if Apple's BV is published anywhere, but its going to be nowhere near $900B. As much of the "value" is just a confidence trick, when there is a confidence knock, the value will go down - if Apple's cash cow the iPhone starts chronically underperforming then the hundreds of billions of theoretical value will evaporate in an instant. Not a prophecy of doom, but something for investors to be aware of.

Are you seriously thinking you're breaking news?

It's like saying if Google starts losing ad revenue, investors will need to take note.

Apple's value is based on their ability to generate earnings, nothing else. Their EARNINGS validate their $900B valuation because they earn $50B/yr in profit (only 18X earnings). This isn't magic or trust in something intangible. This is cold hard cash.

Other companies, like Google, generate far less cash and trade at similar valuations, making the stock more "expensive" with the idea earnings will catch up in the future.

Apple is essentially priced for little to no growth.

You're a casual investor still thinking this is an iPhone story. That's changing. Wait until Apple is priced as a consumer products and/or services company. This will trade at a $2T valuation with today's financials.

 

[IJ Reilly]

Are you seriously thinking you're breaking news?

It's like saying if Google starts losing ad revenue, investors will need to take note.

Apple's value is based on their ability to generate earnings, nothing else. Their EARNINGS validate their $900B valuation because they earn $50B/yr in profit (only 18X earnings). This isn't magic or trust in something intangible. This is cold hard cash.

Other companies, like Google, generate far less cash and trade at similar valuations, making the stock more "expensive" with the idea earnings will catch up in the future.

Apple is essentially priced for little to no growth.

You're a casual investor still thinking this is an iPhone story. That's changing. Wait until Apple is priced as a consumer products and/or services company. This will trade at a $2T valuation with today's financials.

Apple is not priced for little or no growth, the stock is priced for 15-20% annual EPS growth. That is what the trailing PE is telling us. A company with little or no earnings growth won't trade for 18 times earnings, at least not for very long. Your mythical $2T valuation can only happen in the foreseeable future if Apple doubles its rate of earnings growth, to levels we haven't seen in ten years or so. What development is going to drive growth to the 30-40% range? I'm not seeing it. Not coincidentally, the markets aren't either.

 

[Allyance]

Buffett has 165.3M shares, more specifically, Berkshire has the shares.

I was going by memory from an Apple Stock news feed, 165.3 even better. Most people interchange WB with Berkshire Hathaway since he is the majority stock holder, Chairman & CEO.

 

[Falhófnir]

Are you seriously thinking you're breaking news?

No?

Are you seriously thinking you're breaking news?

It's like saying if Google starts losing ad revenue, investors will need to take note.

Apple's value is based on their ability to generate earnings, nothing else. Their EARNINGS validate their $900B valuation because they earn $50B/yr in profit (only 18X earnings). This isn't magic or trust in something intangible. This is cold hard cash.

Other companies, like Google, generate far less cash and trade at similar valuations, making the stock more "expensive" with the idea earnings will catch up in the future.

Apple is essentially priced for little to no growth.

You're a casual investor still thinking this is an iPhone story. That's changing. Wait until Apple is priced as a consumer products and/or services company. This will trade at a $2T valuation with today's financials.

Lol why so defensive, mortgaged to the eyeballs on their stock?

 

[Baymowe335]

No?

Lol why so defensive, mortgaged to the eyeballs on their stock?

Mortgaged? I actually wish I owned more. Anyone who has ever bought AAPL and didn't sell has made money. I own many thousands of shares, but it's only a small piece of my overall portfolio. I do want it higher though and think it's attractively valued. Otherwise, I wouldn't own this many shares.

 

[Carnegie]

Yeah sorry don't know where I got those other rates. Might have been thinking of California's separate capital gains tax. To my knowledge I've never be subjected to any excise tax/AMT, and I've certainly had gains of over $125k.
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Again sorry. My mistake. Posting late at night...

The PPACA added a net investment income tax of 3.8% on investment income, to include dividends and capital gains. But the $125,000 threshold I referred to is for married filing separately. I apologize. The threshold for individuals is $200,000.

So someone with taxable income over around $425,000 a year pays 23.8%, federally, on incremental capital gains.