The fact remains that the vast majority of professional money managers don't beat the market over time. A year or two here or there, if they are really good, but even then not often or consistently enough to justify their existence.
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Hedge Funder Lee Cooperman Takes 'Modest Position' in Apple, Drives Stock Price Over $500
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The fact remains that the vast majority of professional money managers don't beat the market over time. A year or two here or there, if they are really good, but even then not often or consistently enough to justify their existence.
Of course. That's a given. And among the few who do, many succeed partly by keeping their AUM constrained to reasonable levels, so they don't fall into the universe of "investable" asset managers anyway.
On an unrelated note, blech. Today was rough.
It's not merely the stock market itself, rather the economics of supply and demand! Stock purchases go up = demand for the stock goes up = stock price goes up ...
Yeah, but I never try to figure out today. Don't stare into the hairy eyeball. That's my philosophy.
Uh, except that for stock the supply doesn't actually change. Think auction.
In another words, the bigger brothers always get even bigger because they always win if a fight is involved. That is exactly something we should prevent the society eventually become.
Aye, but it used to be much harder to manipulate.
I don't know much about the U.S Markets but here in Australia trading bots and institutional trading have pretty much broken our stock exchange.
I think the only reason why the price is higher within the recent month is due to speculation on the buyback in addition to future earnings which I believe Apple will meet regardless of the share prices. Even though it's going to be a really positive fall and winter for 2013, the problem is that all the product is going to land between September and February. Looking at a 2 year projection of earnings pretty much puts Apple in the mid $500 to $600 range. Saying it's severely undervalued is an overstatement IMO. Anyone offload some shares this month? I know I did.
So...you didn't read anything I wrote and wanted to post something that is consistent with your internal narrative? Ok.
Aren't those two really good reasons?
I'm still trying to fathom the idea that future earnings could be dependent on the share price. It's a tough concept but give me time.
I dumped all of mine. That said, a proper cash flow analysis suggests your numbers are lowif you believe current projections about Apple's long term growth. Remember that in principle, stock price is (supposed to be) determined by future cash flows. In the most basic case, such as a stock with constant earnings that pays out those earnings as a dividend in perpetuity, the calculation follows as such.
I bring up the theoretical argument here because looking at a 2 year projection doesn't ever give you proper valuation. You need something a little longer term, with a terminal value. Given EPS forecasts for the next couple years plus a projected LTG rate of 18% (mean analyst forecast), you're looking at a valuation around $770. You have to trim the LTG rate to 10% to get something like $585.
I'm not going to speculate on which LTG rate is "right", but rather just wanted to chime in that it's crucially important when conducting any kind of valuation analysis.
Large investors use their buying and selling to sway share prices all the time. So the comment is very relevant.
Alas, for people like you that have such a poor logic ability, why would you try to join the discussion forum? You can only be a factor to explode the number of unnecessary back-and-forth words that everyone in the forum have to spend precious time reading.
Anyway, I am simply going to be nice to you for this once and give you detailed explanation about the logics shouldn't really need to be further narrated.
Your original comment was to use examples to prove that the "big players" don't always get the market to follow them". However, your example only proved that they don't get the market to follow when there are bigger players cut in and reverse the first influence. In another words, your example further illustrated the fact that the bigger the players/allies are, the higher chance they can direct the market as they wish. Hence there came my response to your comment -- a better market mechanism needs to be established to make sure big players can have NO BIGGER impact than the tiny regular players.
What are you even saying?
Thanks, this would be hugely helpful. Perhaps you could also send this as an email to my employer who pays me quite well for my opinions on the market.
The market is comprised of millions of investors, some of whom are large, institutional players and some of whom are small, retail investors. If Warren Buffett comes out and says that he thinks Cisco is undervalued and he puts his money where his mouth is, you think the market should ignore him? Really?
Stepping back to reality, you might take a second look at Cisco as a retail investor. You might consider the fact the Buffett often beats the market and then say to yourself "you know what, he's probably a better stock picker than I am" and choose to follow him into the trade (albeit with less money). That's how the market reacts. It's not illogical. It's often reactionary, so I would be concerned if one of these participants were to announce a huge position, pump the stock up, then dump it immediately, but unless you bring some evidence to the table that these guys are engaging in a large-scale pump and dump schemes then you don't really have a valid point.
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In a really logical market, one million people each investing $1000 on the same stock at the same direction should have bigger impact than one big investor who puts in one billion dollar, unfortunate the reality is always the opposite. That's all I meant, not your exaggerated "ignore him" statement.
I get sick of this financial *****torm around Apple shares. Shall we just ignore the news about the financial sharks trying to misuse Apple? I suggest Apple just uses its cash pile to buy ALL outstanding Apple shares in the next few years. That would be a joke....