Mav
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Post by Mav on Mar 17, 2013 23:21:57 GMT -8
So good to me?
Or...
Can't trust that day?
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Post by mace on Mar 18, 2013 1:13:32 GMT -8
Apple should borrow some funds, say $40 or 50 billion, even though it doesn't need them, because today's interest rates* are negative vs. real inflation, just as Google borrowed funds. Then it should use the funds to buy back alot of Apple Shares, same as IBM does with its shares. If Apple can borrow at 2% for 10 year money, then after-tax its real cost of capital is 1.5% per year (given its 26% tax rate) which is about 1/2 or 1/3 the rate of inflation. And since Apple's shares to be bought back are at a 10 PE, it would earn 10% (even if Apple should possibly not grow) or 7X the cost of that borrowed capital. ITS A NO BRAINER FOLKS. IT WILL INCREASE EARNS. PER SHARE. If Apple grows, which I expect it will, every share bought back at 10 PE, could earn 10% + the Growth, or easily 20% for Apple Corp. on 1.5% cost of capital. Wishful thinking by Goldman Sucks and similar thinking of making a killing from exorbitant fees for arranging such complex financial deal. KISS, Keep it simple and sweet. Buy back enough shares to compensate for share dilution and pay a good enough dividends to attract value investors. Bring down share count to 900 million. Increase dividends to $4 per quarter. Ignore gimmicky calls to buy a dollar for 80 cents from a person who doesn't understand technology businesses or buy when share is undervalue advice from guys who sold toxic financial products and created the financial crisis.
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Mav
Member
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Posts: 10,784
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Post by Mav on Mar 18, 2013 1:21:45 GMT -8
+1 to that.
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Post by greyfox15 on Mar 18, 2013 1:30:55 GMT -8
Mace, since when does the last "s" in KISS stand for sweet? Keep it Simple Stupid has been always the KISS I knew.
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Post by rob_london on Mar 18, 2013 1:35:12 GMT -8
Markets seem to be bouncing back here in Europe. FTSE-100 only down 0.5%, 90 minutes after market opening.
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Mav
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Posts: 10,784
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Post by Mav on Mar 18, 2013 2:11:48 GMT -8
Mace, since when does the last "s" in KISS stand for sweet? Keep it Simple Stupid has been always the KISS I knew. If we're gonna get that technical... ;D
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Post by phoebear611 on Mar 18, 2013 2:47:24 GMT -8
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Post by phoebear611 on Mar 18, 2013 2:55:29 GMT -8
Goldman's Jim O'Neill on CNBC talking about Cyprus: "This is a biggie." He feels the genie was let out of the bottle with this stumble. All that being said - I believe someone here mentioned yesterday that money may come to the US instead so not sure about how our markets play out in the long run but in the short-term it is most definitely a negative. Tweets have gone out that in the weaker banks in Italy and Spain they are seeing heavy bank withdrawals. I don't know how much is fact versus sensationalism but by the time we figure it out - damage is done. My only hope is that AAPL move inversely to the market. By the way - I've also listened to several pundits who have said that the bulk of this money in Cyprus banks are deposits from Russian oligarchs. Furthermore today and tomorrow are bank holidays in Cyprus - further prolonging the drop of the other shoe. This is really such a mess. It only manages to create uncertainty and fear - neither of which is good for the markets in general.
PS They are trying to change the 10% tax on over 100k euros to 3% but the biggie is that even if you are insured (i.e. like our FDIC in the US) with deposits below 100k euro you will still be hit with this "tax" -- but to a lesser extent. It seems that the breach of this insurance is a huge game-changer, at the very least psychologically for markets. None of this has been voted for in the Cyprus Parliament yet - but this is all not good at the very least. And the vote seems to have been delayed in Cyprus till Tuesday as I type...further prolonging uncertainty.
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Post by phoebear611 on Mar 18, 2013 3:16:20 GMT -8
My best guess is that we need to somehow see what is happening in Cyprus to be ring-fenced. Until then I think I will sit on the sidelines. Remember that a lot of our market has been driven by sentiment and this cannot be good for sentiment. It also doesn't mean that this bull market is over but I don't need to be a hero ... I would like to see how this plays out a bit given the unpredictability of the situation. (Geez - whatever happened to Mario Draghi's comment on that they will do whatever it took?!)
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Post by rob_london on Mar 18, 2013 3:30:23 GMT -8
Goldman's Jim O'Neill on CNBC talking about Cyprus: " By the way - I've also listened to several pundits who have said that the bulk of this money in Cyprus banks are deposits from Russian oligarchs. Yes, I've read that 60-70% of the levy proceeds could come from non-resident Russians. And there's this: "Russian energy giant Gazprom has offered the Republic of Cyprus a plan in which the company will undertake the restructuring of the country’s banks in exchange for exploration rights for natural gas in Cyprus’ exclusive economic zone, local media reported." greece.greekreporter.com/2013/03/18/gazprom-offers-cyprus-restructuring-deal-to-avoid-eu-bailout/
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Post by lance on Mar 18, 2013 3:33:05 GMT -8
End of overdone bull stock market rally? May be have a little needed pullback. Lets hope that this results in shift to AAPL.
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Post by rob_london on Mar 18, 2013 3:35:30 GMT -8
Ignore gimmicky calls to buy a dollar for 80 cents from a person who doesn't understand technology businesses With respect, why is buying backing a substantial quantity of extremely undervalued shares of your business a gimmick? Incidentally IBM is now Berkshire Hathaway's third largest holding, so I would suggest Warren Buffett probably understands technological companies a little...
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Post by appledoc on Mar 18, 2013 4:52:11 GMT -8
End of overdone bull stock market rally? May be have a little needed pullback. Lets hope that this results in shift to AAPL. I mentioned that a few days ago. If you don't want to go to cash, why not put it in the most beaten up stock of the last six months?
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mark
fire starter
Posts: 1,649
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Post by mark on Mar 18, 2013 5:03:19 GMT -8
Ignore gimmicky calls to buy a dollar for 80 cents from a person who doesn't understand technology businesses With respect, why is buying backing a substantial quantity of extremely undervalued shares of your business a gimmick? Incidentally IBM is now Berkshire Hathaway's third largest holding, so I would suggest Warren Buffett probably understands technological companies a little... Isn't IBM more a services company at this point? (disclaimer: I haven't looked at their financials recently)
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Post by terps530 on Mar 18, 2013 5:35:09 GMT -8
nice open for AAPL relative to everything else. Cautiously looking strong
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Post by appledoc on Mar 18, 2013 5:52:33 GMT -8
Google's AAPL chart is 14 minutes delayed right now.
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Deleted
Deleted Member
Posts: 0
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Post by Deleted on Mar 18, 2013 5:53:46 GMT -8
Apple should borrow some funds, say $40 or 50 billion, even though it doesn't need them, because today's interest rates* are negative vs. real inflation, just as Google borrowed funds. Then it should use the funds to buy back alot of Apple Shares, same as IBM does with its shares. If Apple can borrow at 2% for 10 year money, then after-tax its real cost of capital is 1.5% per year (given its 26% tax rate) which is about 1/2 or 1/3 the rate of inflation. And since Apple's shares to be bought back are at a 10 PE, it would earn 10% (even if Apple should possibly not grow) or 7X the cost of that borrowed capital. ITS A NO BRAINER FOLKS. IT WILL INCREASE EARNS. PER SHARE. If Apple grows, which I expect it will, every share bought back at 10 PE, could earn 10% + the Growth, or easily 20% for Apple Corp. on 1.5% cost of capital. Wishful thinking by Goldman Sucks and similar thinking of making a killing from exorbitant fees for arranging such complex financial deal. KISS, Keep it simple and sweet. Buy back enough shares to compensate for share dilution and pay a good enough dividends to attract value investors. Bring down share count to 900 million. Increase dividends to $4 per quarter. Ignore gimmicky calls to buy a dollar for 80 cents from a person who doesn't understand technology businesses or buy when share is undervalue advice from guys who sold toxic financial products and created the financial crisis. Disagreed...Apple obviously has more cash than it needs and it's growing everyday. Doesn't it make financial sense to retire more stock when you're paying 2.5% dividend on it, which is also likely to increase. You can borrow at 1.5% to cancel out debt you owe at 2.5%...sounds like a no brainer to me. Apple would also noticeably increase EPS with a notable buyback, which can't be a bad thing. I am completely in the buyback camp...it makes more sense than a one time dividend or continuing to hoard it. It's not like hoarding it is doing Apple any good...the PE ex cash is around 6.5, find me another company without debt that's PE is 6.5. Wall Street prices firms at that level if they have doubts about the future.
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Post by appledoc on Mar 18, 2013 5:57:22 GMT -8
705 to 555 trend line is firmly broken. Next two objectives are closing decisively above 484 and the weekly SMA100.
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Post by Red Shirted Ensign on Mar 18, 2013 5:58:56 GMT -8
Excellent beginning half hour....lets see volume pick up as winners are rewarded on a tough market day.
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Post by prazan on Mar 18, 2013 6:05:46 GMT -8
Google's AAPL chart is 14 minutes delayed right now. The quotes for everything on my board are skewed when viewed through Google charts. Every position is showing Saturday trading. Huh?
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Post by dreamRaj on Mar 18, 2013 6:14:44 GMT -8
If we cross the 450 mark today, it would feel quite bullish.
Never imagined that the S4 launch could spark AAPL. Hey, whatever it takes!
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Post by tuffett on Mar 18, 2013 6:16:17 GMT -8
Apple should borrow some funds, say $40 or 50 billion, even though it doesn't need them, because today's interest rates* are negative vs. real inflation, just as Google borrowed funds. Then it should use the funds to buy back alot of Apple Shares, same as IBM does with its shares. If Apple can borrow at 2% for 10 year money, then after-tax its real cost of capital is 1.5% per year (given its 26% tax rate) which is about 1/2 or 1/3 the rate of inflation. And since Apple's shares to be bought back are at a 10 PE, it would earn 10% (even if Apple should possibly not grow) or 7X the cost of that borrowed capital. ITS A NO BRAINER FOLKS. IT WILL INCREASE EARNS. PER SHARE. If Apple grows, which I expect it will, every share bought back at 10 PE, could earn 10% + the Growth, or easily 20% for Apple Corp. on 1.5% cost of capital. Wishful thinking by Goldman Sucks and similar thinking of making a killing from exorbitant fees for arranging such complex financial deal. KISS, Keep it simple and sweet. Buy back enough shares to compensate for share dilution and pay a good enough dividends to attract value investors. Bring down share count to 900 million. Increase dividends to $4 per quarter. Ignore gimmicky calls to buy a dollar for 80 cents from a person who doesn't understand technology businesses or buy when share is undervalue advice from guys who sold toxic financial products and created the financial crisis. It really isn't complex though. If the only reason to not do this is because of deep-seated insecurities and that Apple has never taken on debt before, I don't think it's a valid excuse. It is pretty much a no brainier opportunity to add value to shareholders. By the way, a buyback to take advantage of undervalued shares is no more "gimmicky" than negating share dilution, in my opinion. It is the exact same action to serve two different purposes. One is to prevent value reduction, the other to add value. Both pretty important, I say. I think it's more of a gimmick to accumulate ridiculous amounts of cash just for the sake of it, and invite yourself to scrutiny from everyone and develop the image of a greedy company that has more money than it needs, yet continues to charge top dollar (not my opinion but the opinion of many "ordinary" folk when they hear how much cash Apple has).
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Post by Red Shirted Ensign on Mar 18, 2013 6:16:50 GMT -8
If we cross the 450 mark today, it would feel quite bullish. Never imagined that the S4 launch could spark AAPL. Hey, whatever it takes! A big uncertainty quantified, analyzed and now deemed important but not critical.....
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Post by rob_london on Mar 18, 2013 6:21:53 GMT -8
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Post by Big Al on Mar 18, 2013 6:22:27 GMT -8
If we cross the 450 mark today, it would feel quite bullish. Never imagined that the S4 launch could spark AAPL. Hey, whatever it takes! Yup, that is quite a wall of calls at $450.
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Deleted
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Post by Deleted on Mar 18, 2013 6:30:43 GMT -8
nice open for AAPL relative to everything else. Cautiously looking strong Among several other bullish indicators, AAPL is bucking a negative market two days in a row, and doing it strongly. My best guess is that the institutions aren't waiting until the end of the quarter (as they have in the past) to pile on. My Weekly $435/$440 BCS is looking better and better. I think the brouhaha in Cyprus is going to blow over as a non-event. As bad as its banking system is, it isn't as large (and therefore dangerous) as the original PIIGS. The fact that they have a plan, no matter how painful/distasteful, that doesn't require a massive (on the scale of the PIIGS) bailout is a definite plus.
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icam
Member
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Post by icam on Mar 18, 2013 6:32:37 GMT -8
705 to 555 trend line is firmly broken. Next two objectives are closing decisively above 484 and the weekly SMA100. We broke through the trend line, but we may need a bit more time than 1 hour before the term "firmly" can be applied. Make no mistake, I'm all for breaking, and staying above that MF trend line.
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Post by artman1033 on Mar 18, 2013 6:53:31 GMT -8
The mini options have started.
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Post by lance on Mar 18, 2013 7:01:09 GMT -8
well out of daily downtrend line. For someone all out of Apple you can't find a better entry point for safe spot to start to limp in then AAPL over the past 2 weeks
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Deleted
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Post by Deleted on Mar 18, 2013 7:21:12 GMT -8
nice open for AAPL relative to everything else. Cautiously looking strong Among several other bullish indicators, AAPL is bucking a negative market two days in a row, and doing it strongly. My best guess is that the institutions aren't waiting until the end of the quarter (as they have in the past) to pile on. My Weekly $435/$440 BCS is looking better and better. I think the brouhaha in Cyprus is going to blow over as a non-event. As bad as its banking system is, it isn't as large (and therefore dangerous) as the original PIIGS. The fact that they have a plan, no matter how painful/distasteful, that doesn't require a massive (on the scale of the PIIGS) bailout is a definite plus. Hey Gregg, Just a question, or really anyone could answer...I have the same spread, but as a bullish put spread instead of a call spread. Do you generally get better prices with call spreads? The main reason I've been doing put spreads lately is just cause I love having them expire worthless, instead of having to exercise the calls or sell them for less than max value. Thanks
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