Apple's Correction
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Re: Apple's Correction
Strikes me Apple is being priced as if its days of innovation are completely over and that Steve Jobs was the sole innovator at the company. It's likely the latter is somewhat true and we're seeing that in their current lack of new product releases. It's also possible that great ideas are being suppressed by the new conservative management.
Either way, this is just about getting their edge back. And that shouldn't take much more than one great new product release. It's hard for me to believe that the development team at Samsung is suddenly sooo much more innovative and edgy than the team at Apple. Ultimately, everything produced by Apple's competitors is still an improved copycat of Apple's original releases. So if Apple is done innovating, this entire industry may be in trouble.
Either way, this is just about getting their edge back. And that shouldn't take much more than one great new product release. It's hard for me to believe that the development team at Samsung is suddenly sooo much more innovative and edgy than the team at Apple. Ultimately, everything produced by Apple's competitors is still an improved copycat of Apple's original releases. So if Apple is done innovating, this entire industry may be in trouble.
Re: Apple's Correction
A few reasons...Xan wrote:Maybe I'm missing something, but what's so important about the absolute share price? I mean, assuming you can afford at least one.rocketdog wrote: Not if it's $400 a share I'm not.
First, you have more of your money locked up into each share so your money doesn't go as far. All other things being equal, I would much rather diversify between 10 different well-chosen $40 stocks than put it all into a single $400 stock. The $400 stock is an "all-or-nothing" bet, whereas there is a decent chance at least some of my $40 stocks will do well enough to overcome any losers.
Second, with rare exceptions the higher a stock's price climbs the less upside potential there is. There is just a lot more headwind for a $400 stock than there is for a $40 stock. It is much more likely for a $40 stock to eventually double or triple in price than it is for a $400 stock to do so (how many $400 stocks can you name that eventually hit $1,200?).
Third, look at AAPL. They first hit $400 in Dec. 2011, briefly topped $700 nine months later, then sank back to $400 six months after that. I'm not eager to jump into an investment that has a strong potential for multiple $300 price swings in little more than a year.
If I'm going to "swing for the fences", it's going to be with a low-priced start-up company (like AAPL, but back in their early days). Otherwise I'll stick with my boring index funds, thanks.
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Re: Apple's Correction
Rocketdog,
That all makes sense, but only #1 has anything to do with the actual share price in absolute terms. The rest applies regardless.
That all makes sense, but only #1 has anything to do with the actual share price in absolute terms. The rest applies regardless.
Re: Apple's Correction
If you're doing the kind of portfolio management that involves rebalancing individual stocks, a stock nominally priced at $400 per share is harder to balance than if it were priced at $40.
Most public companies split their stock when it reaches a certain price point, usually somewhere between $80 and $100. It attracts more shareholders. Those who do not split have their own reasons for that, including the desire for a particular type of shareholder. And some just don't want to waste money on all the administrivia involved in a split.
Most public companies split their stock when it reaches a certain price point, usually somewhere between $80 and $100. It attracts more shareholders. Those who do not split have their own reasons for that, including the desire for a particular type of shareholder. And some just don't want to waste money on all the administrivia involved in a split.
Re: Apple's Correction
Is this why Google and Bershire Hathaway don't split?
The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.
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Re: Apple's Correction
They don't care about pleasing Wall Street's myopic short-term focus.rocketdog wrote: Is this why Google and Bershire Hathaway don't split?
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: Apple's Correction
Maybe, but it also has the effect of shunning most investors like us. Certainly for BRK anyway (unless you buy the B-class shares, or maybe a fraction of an A-class share, or else wind up holding a slice of the A-class in an index fund).MachineGhost wrote:They don't care about pleasing Wall Street's myopic short-term focus.rocketdog wrote: Is this why Google and Bershire Hathaway don't split?
The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.
- H. L. Mencken
- H. L. Mencken
Re: Apple's Correction
You can add Amazon to that list as well.MachineGhost wrote:They don't care about pleasing Wall Street's myopic short-term focus.rocketdog wrote: Is this why Google and Bershire Hathaway don't split?
everything comes from somewhere and everything goes somewhere
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Re: Apple's Correction
Anyone for Apple bonds?
http://online.wsj.com/article/SB1000142 ... 82274.html
Too bad the term "I-Bond" is already taken.
(I know this is the Stock section, but it doesn't really merit its own thread).
Edit: Never mind. I see PS's thread here - http://gyroscopicinvesting.com/forum/ht ... ;topicseen
http://online.wsj.com/article/SB1000142 ... 82274.html
Too bad the term "I-Bond" is already taken.
(I know this is the Stock section, but it doesn't really merit its own thread).
Edit: Never mind. I see PS's thread here - http://gyroscopicinvesting.com/forum/ht ... ;topicseen
Last edited by dualstow on Tue Apr 30, 2013 6:40 pm, edited 1 time in total.
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Re: Apple's Correction
Apple doing a bond offering is a general sign it considers its stock to be undervalued, otherwise they'd be using their overvalued equity to purchasing undervalued equity. If you don't know who the patsy at the table is, its...
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: Apple's Correction
MT,
Your trade is shaping up nicely so far. Is there a price or P/E that will tempt you to sell?
Your trade is shaping up nicely so far. Is there a price or P/E that will tempt you to sell?
everything comes from somewhere and everything goes somewhere
Re: Apple's Correction
I don't know. I will probably just sit tight for a while. I'm looking forward to reinvesting my Apple dividends right now.melveyr wrote: MT,
Your trade is shaping up nicely so far. Is there a price or P/E that will tempt you to sell?
My last Apple trade involved a buy at $240 and a quick sale when it hit $260. At the time I felt like a genius...but then I watched it go to $700 and I didn't feel quite as smart.
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Re: Apple's Correction
Don't feel too bad. I felt like a genius when my AAPL shares hit $700... only to watch the price tumble below $400 mere months later.MediumTex wrote: My last Apple trade involved a buy at $240 and a quick sale when it hit $260. At the time I felt like a genius...but then I watched it go to $700 and I didn't feel quite as smart.
Last edited by Pointedstick on Sun May 05, 2013 2:11 pm, edited 1 time in total.
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Re: Apple's Correction
{ fixed }
did you mean to write something else that second time, PS?
did you mean to write something else that second time, PS?
Last edited by dualstow on Sun May 05, 2013 3:20 pm, edited 1 time in total.
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Re: Apple's Correction
Oops. I meant to edit the initial post to correct a grammar error. Derp.
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
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Re: Apple's Correction
I bet you're happy right now.MediumTex wrote: I bought some this morning at $395.99.
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
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Re: Apple's Correction
Buying below $400 a share was a pretty easy call.Pointedstick wrote:I bet you're happy right now.MediumTex wrote: I bought some this morning at $395.99.
With that nice dividend coming in, it's a great investment all the way around.
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Re: Apple's Correction
Do you think that you owe Carl Icahn a steak dinner at the very least?
Re: Apple's Correction
Do you owe the rooster a steak because the sun rises?Reub wrote: Do you think that you owe Carl Icahn a steak dinner at the very least?
Q: “Do you have funny shaped balloons?”
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Re: Apple's Correction
Everyone's a genius in a bull market.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: Apple's Correction
It's been almost a month since anyone posted anything in the stock section of the forum?
That's really weird. I guess it means that the stock market has been exceptionally boring recently.
What a change from a few years ago.
That's really weird. I guess it means that the stock market has been exceptionally boring recently.
What a change from a few years ago.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: Apple's Correction
How about that Apple dropping $3.2bn on an overrated headphone company?
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Re: Apple's Correction
Something to do with the Mog streaming service perhaps, but it *is* weird. Well, it's 2% of their total.Tyler wrote: How about that Apple dropping $3.2bn on an overrated headphone company?
Re: Apple's Correction
I believe they were buying Dr. Dre.
Apple buys people, generally speaking. They are very concerned about having high-quality, in fact top, elite-quality people. Apple considers themselves highly resource-constrained. How so, having billions of dollars? The resource they are constrained by is people.
For some reason, they consider Dr. Dre, and/or perhaps others on his team, to be A-list player(s).
Apple buys people, generally speaking. They are very concerned about having high-quality, in fact top, elite-quality people. Apple considers themselves highly resource-constrained. How so, having billions of dollars? The resource they are constrained by is people.
For some reason, they consider Dr. Dre, and/or perhaps others on his team, to be A-list player(s).
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Re: Apple's Correction
I'd say its more that they want Millenial diversity catchet. Millenials are suckers for marketing fiction on top of being among the world's most guillible consumers.LC475 wrote: For some reason, they consider Dr. Dre, and/or perhaps others on his team, to be A-list player(s).
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!