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Stocks are always priced "just right," by definition. As for the other part, you just don't get it at all.

Of course by just right I meant that the 700+ price it had in September was ridiculous. I was responding to the guy who asked me why I think the price should keep growing exponentially when apple is not growing exponentially. Not sure where your confusion on my statement came from.

As for the second part, yeah let's leave it at that. :rolleyes:
 
Sure, a company can grow as close to "forever" as realistically matters. The question is at what rate. At 20-30% a year as Apple had been growing? Probably not. But 10% a year is not out of the question, if the new products keep coming.



Yes, it has happened, you are just in denial about it. Nobody is forecasting YoY growth, and even if by some miracle they managed to squeak out more a few pennies more in EPS this year compared to last, the margin would be too small to really matter.



Not really. The markets are looking 3-6 months down the road. One or two quarters, at most. As an investor you would do will to look beyond that horizon, but you will have to accept that that markets are not pricing the stock for the long term.

You are assuming a stock price is driven by some rational criteria, it is not. Look at Amazon (P/E Undef) or Facebook (P/E 1,500ish). Amazon is "expected" to show a profit last quarter, but it is only expected to come in around .09 billion. I believe that puts their P/E a lot closer to Facebook than to Apple's P/E of ~9. Neither one of those stocks is priced on expectations for the next 5-10 years, let alone the next 3-6 months. What are they based on? Trading driven by pros fleecing amateurs on popular stocks.

It is easy to see Apple as undervalued today versus what the company may be worth in 10 years. No rational person can say that about Facebook or Amazon.

Google is one of the most reasonably priced tech stocks today. If Apple was trading at their P/E of ~27, the share price would be around $1,200 and the market cap would be over $1 trillion. Google is not growing or growing growth any faster than Apple. Where is the sense in that?
 
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RT @joemccann: Someone bought $203,000,000 worth of $AAPL stock *before* earnings in the after hours. Wow.


Uh....... do they know something?
 
Exactly, so why do you want this particular company's (which has significantly slowing growth) stock to be priced as if it is?
Because even without any growth at all, it has a P:E of 9, and that's not even factoring in the cash slush pile. It is irrational, unless you expect not only a lack of growth, but a severe contracture in earnings. Not likely.
 
Well we should find out the latest quarter's news in a few minutes. And then this thread will be dead we will all be on the earnings release thread. :)
 
Of course by just right I meant that the 700+ price it had in September was ridiculous. I was responding to the guy who asked me why I think the price should keep growing exponentially when apple is not growing exponentially. Not sure where your confusion on my statement came from.

As for the second part, yeah let's leave it at that. :rolleyes:

You aren't following. The function of markets is to set prices. So by definition, whatever the price is now, that is the right price. Anything else is just theoretical. So when AAPL was at $700, that was the right price at that time, based on what investors knew and expected about the future. Instead of good things happening, the news since then has been mostly negative. In reality, markets tend to overreact on both the optimistic and pessimistic side, so while $700 based on current earnings might have been overly optimistic, the question remains whether $400 is overly pessimistic based on future earnings. The answer to that question we will not know until after the fact.
 
You are assuming a stock price is driven by some rational criteria, it is not. Look at Amazon (P/E Undef) or Facebook (P/E 1,500ish). Amazon is "expected" to show a profit last quarter, but it is only expected to come in around .09 billion. I believe that puts their P/E a lot closer to Facebook than to Apple's P/E of ~9. Neither one of those stocks is priced on expectations for the next 5-10 years, let alone the next 3-6 months. What are they based on? Trading driven by pros fleecing amateurs on popular stocks.

It is easy to see Apple as undervalued today versus what the company may be worth in 10 years. No rational person can say that about Facebook or Amazon.

Google is one of the most reasonably priced tech stocks today. If Apple was trading at their P/E of ~27, the share price would be around $1,200 and the market cap would be over $1 trillion. Google is not growing or growing growth any faster than Apple. Where is the sense in that?

Not really. During the mid-2000s AAPL was selling at PEs in the 70-100 range. And what was the basis for these high multiples? Expectations of growth. Were those expectation fulfilled, or no? Did investors who bought at those multiples get fleeced?

No rational person, indeed.
 
Conference call should be interesting. Tim Cook is going to get drilled on future products and if he pulls the norm and says "Great stuff in the pipeline". Watch the after hours stock price drop significantly.

"Mr. Cook, we heard that you're planning to sell an iPod on a wrist band... True or false, sir?"
 
: AAPL reports EPS $10.09 vs. $10.10 ; Revenues $43.6 vs. $42.75B

Buyback of $60 Billion.

dividend upped 15%

About 2% above the Street on EPS. Not great, but not terrible. Not as bad as the last two quarter anyway. Setting the dividend at around 3% should make some investors happy.
 
Last quarters, the stock didn't drop because revenues didn't grow, it dropped because the growth of revenues didn't grow.

Uh, I neither implied nor stated anything regarding Apple's last Q, just stated a basic generic investment fact. Don't be so quick to rush in to comment.

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Perpetual Exponential growth is not possible.

True. Nothing is forever. That's why stock that go up usually also go down. Thanks for pointing out the obvious.
 
Uh, I neither implied nor stated anything regarding Apple's last Q, just stated a basic generic investment fact. Don't be so quick to rush in to comment.


I understand your basic investment fact, just wanted to point out that growth alone isn't necessarily enough to please investors (as proved by past quarters). They also have to maintain a growth growth. Your original comment only mentionned growth, which happened in previous quarters when the stock dropped.
 
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