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Post by applemuncher on Jul 27, 2013 9:56:18 GMT -8
Does anyone realize the Apple's 6.9B in net income for its June Quarter is 328% greater than the entirety of Amazon's 2.1B of net income since it opened? It is easy for the average investor to look at Amazon and see no serious competitor to what they do. I bet none of us can name a single relevant competitor for their core business. They are looked upon as the gorilla in the future of retail. I would never invest at these valuations, but their story is easy to understand and there is no threat to their business model. I suspect that there is belief that they can become more profitable when they feel like flipping that switch. But right now, their strategy is to become embedded in people's lives. And Bezos is real good at articulating his view of the world. But with Apple, there are perceived and real threats everywhere. People invest in the future, not the past. And there are many who see Apple as an impending has-been with dangerous competition. Not saying they are right, but Apple is clearly under attack from the likes of powerful companies like Samsung and Google. Who are Amazon's Samsung and Google? And Apple articulates their vision of the future very poorly. That hurts them in my view. This whole "we build great products and growth follows" comes across as snubbing their nose at conventional investing principles. It is hard to tell if they are right, arrogant, or have their heads buried in the sand with that attitude. My money is in Apple, not Amazon. I don't get Amazon's valuation either, but it is what it is. Nice post. I agree 100%.
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Post by Deleted on Jul 27, 2013 10:01:01 GMT -8
But it "ended" with Apple, a company that's never stopped making a profit. Is this just a function of smaller market cap? I think it's a function of the shoe being on the other foot now. It's the rational side that gets screwed for being rational. it's the "up is down" mentality that the media and our schools teach. Seldom is a firm given credit for being smarter/better than its competitors once it leads the pack. At that point perceptions take a 180ยบ turn, and that firm becomes the object of every crackpot theory on what's wrong with it. Capitalism is nearly always described as bad because the "rich and powerful" got that way by "exploiting the masses". So while we love Apple's products, the "masses" hate that Apple is making so much money. Surely Apple is guilty of something to make so much. In America (and elsewhere) we admire, we applaud, success stories, until the success becomes "too much", and then we turn on the very object that was previously admired. Stalin has won. During the 1930s Soviet Russia made a concerted effort to infiltrate our universities, unions and media. He succeeded, not in making them card carrying communists, but in shaping attitudes where "up is down", where financial success was achieved because the worker was exploited. We love the products, but find the financial success that follows, abhorrent. Products good. Stocks bad.
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Mav
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Post by Mav on Jul 27, 2013 10:03:47 GMT -8
Apple would've been a slower-growing but likely profit-growing company this fiscal year if not for intentional strategy shifts.
The long view.
Btw Mercel, if AAPL is up about 3.4% for the week and diluted shares outstanding are at least 3.6% or so lower (23M + 11M IIRC, though not reflected in EPS yet), does that "mean" anything? Aside from WS giving little value to AAPL's cash even when AAPL uses it?
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Mav
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Post by Mav on Jul 27, 2013 10:05:18 GMT -8
Quit that.
If Stalin won, why tilt at windmills with options? Or buy shares? That's right, AAPL isn't "dead money". Or a bunch of us wouldn't be posting here.
Resentment, disrespect, AND opportunity exist for AAPL.
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Post by Deleted on Jul 27, 2013 10:38:16 GMT -8
Posts that accept Amazon's valuation as "it is what it is..." goes against my grain. Apathy drives me bat sh*t crazy. Any effort any of us makes to push back may have zero impact but no effort guarantees it.
I "GET" that WS is running AMZN on the basis of sales growth, but it's all out of proportion given the lack of profits. It's a travesty that financial media fails to hold AMZN accountable -- this has continued for 19 years.
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Post by Deleted on Jul 27, 2013 10:39:37 GMT -8
Apple would've been a slower-growing but likely profit-growing company this fiscal year if not for intentional strategy shifts. The long view. Btw Mercel, if AAPL is up about 3.4% for the week and diluted shares outstanding are at least 3.6% or so lower (23M + 11M IIRC, though not reflected in EPS yet), does that "mean" anything? Aside from WS giving little value to AAPL's cash even when AAPL uses it? I'd have more appreciation for this if AAPL were trading at $600+
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Post by Lstream on Jul 27, 2013 10:52:15 GMT -8
Posts that accept Amazon's valuation as "it is what it is..." goes against my grain. Apathy drives me bat sh*t crazy. Any effort any of us makes to push back may have zero impact but no effort guarantees it. I "GET" that WS is running AMZN on the basis of sales growth, but it's all out of proportion given the lack of profits. It's a travesty that financial media fails to hold AMZN accountable -- this has continued for 19 years. I get worked up and non-apathetic about stuff I can change. Amazon is the product of free market pricing and there is nothing I can do about it. It is simply not a cause I can get behind, when no one is forcing people to pay the ridiculous prices AMZN gets. The 19 years just provides more evidence regarding the futility of the cause. And so what if the stock falls to earth? That is meaningless to me as an Apple shareholder.
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Mav
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Post by Mav on Jul 27, 2013 10:52:17 GMT -8
Wouldn't we all?
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Post by Deleted on Jul 27, 2013 11:11:57 GMT -8
Tiernan Ray has been pretty even-handed in his commentary, and this quote from his earnings review echoed a topic recently covered by Horace. Can we all agree that Glen Yeung at Citi is a world class dipshit who has no business commenting on Apple. This same "analyst" predicted Apple would sell 17M iPhones in the June quarter. How can anyone take anything he writes seriously. I mean, seriously...
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Post by Deleted on Jul 27, 2013 11:13:17 GMT -8
I get worked up and non-apathetic about stuff I can change. Amazon is the product of free market pricing and there is nothing I can do about it. It is simply not a cause I can get behind, when no one is forcing people to pay the ridiculous prices AMZN gets. The 19 years just provides more evidence regarding the futility of the cause. And so what if the stock falls to earth? That is meaningless to me as an Apple shareholder. My reply: For Want of a Nail For want of a nail the shoe was lost. For want of a shoe the horse was lost. For want of a horse the rider was lost. For want of a rider the message was lost. For want of a message the battle was lost. For want of a battle the kingdom was lost. And all for the want of a horseshoe nail.
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Mav
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Post by Mav on Jul 27, 2013 11:21:48 GMT -8
Doesn't matter how many pallets of nails Amazon sells to customers, it still can't seem to turn a consistent profit.
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Post by Red Shirted Ensign on Jul 27, 2013 12:04:04 GMT -8
I think Amazon will have a Netflix moment and lose 50% of its market value. I don know when or what will bring it on...but the rush to the doors will be thunderous. Someday
But will it then recover like Netflix? No idea...
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Post by Deleted on Jul 27, 2013 12:20:54 GMT -8
If CNBC was 1/10th as skeptical about AMZN as it is of AAPL, it would probably have already lost that 50% of value. I've written to CNBC before and feel good doing so. Melissa Lee is gone and that's progress...
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chinacat
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Post by chinacat on Jul 27, 2013 12:34:08 GMT -8
Tiernan Ray has been pretty even-handed in his commentary, and this quote from his earnings review echoed a topic recently covered by Horace. Can we all agree that Glen Yeung at Citi is a world class dipshit who has no business commenting on Apple. This same "analyst" predicted Apple would sell 17M iPhones in the June quarter. How can anyone take anything he writes seriously. I mean, seriously... Agreed, however few analysts or columnists seem to properly value the post-sales revenue generation and stickiness of the Apple ecosystem.
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Post by Red Shirted Ensign on Jul 27, 2013 12:48:02 GMT -8
If Apple has a share count of 895 million on September 30 and puts the new product lines on sale September 14.. I get to $8.22 in earnings. If its September 21 I get 8.09
Dalrymple "noped" September 6. This tells me two things: it won't be the 6th and Apple knows right now when it will be. IOs 7 is on track. Gold Master by August 17..?
Hardware seems on track. Plastic shells looking good and nearly finalized...
I think the new iPhone Nano is going to massive.......
LETS GO,,,,,,,,,!,,,,!!
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JDSoCal
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Post by JDSoCal on Jul 27, 2013 13:08:37 GMT -8
Posts that accept Amazon's valuation as "it is what it is..." goes against my grain. Apathy drives me bat sh*t crazy. Any effort any of us makes to push back may have zero impact but no effort guarantees it. I don't really care about AMZN, since its biz model really has nothing to do with AAPL (I don't consider media delivery significant to either's bottom line). Of course its valuation is preposterous, & it should eventually end in tears and then everyone can say, "I told you so." It's GOOG's valuation that burns me.
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Post by nagrani on Jul 27, 2013 13:28:03 GMT -8
Sunday, September 22 The First Day of Autumn (Autumnal Equinox) 2013
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Post by lovemyipad on Jul 27, 2013 13:30:07 GMT -8
I'm livid at the market's response to Amazon's earnings and cash burn. Stay tuned for my response... ;D I've got the popcorn popped and the beer chilled..let her rip!! Red, got room for one more? ;D
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Post by Red Shirted Ensign on Jul 27, 2013 13:33:32 GMT -8
I've got the popcorn popped and the beer chilled..let her rip!! Red, got room for one more? ;D I'll squeeze over on the couch...this should be good. Hope he doesn't blow a gasket...
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Post by Red Shirted Ensign on Jul 27, 2013 13:41:20 GMT -8
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Deleted
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Post by Deleted on Jul 27, 2013 14:03:12 GMT -8
Posts that accept Amazon's valuation as "it is what it is..." goes against my grain. Apathy drives me bat sh*t crazy. Any effort any of us makes to push back may have zero impact but no effort guarantees it. I don't really care about AMZN, since its biz model really has nothing to do with AAPL (I don't consider media delivery significant to either's bottom line). Of course its valuation is preposterous, & it should eventually end in tears and then everyone can say, "I told you so." It's GOOG's valuation that burns me. GOOG needs a "tale of the tape" too. Do you realize it took Apple only 27 days in the June quarter to record the profits that Amazon has needed 19 years to report similar net income? Think about that!
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Post by Deleted on Jul 27, 2013 14:08:12 GMT -8
Here's a quick summary of Amazon's Net Income as a % of Sales for its entire history.
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Post by tuffett on Jul 27, 2013 15:13:32 GMT -8
Amazon has no competitors because nobody wants to enter an unprofitable market. If Amazon one day "flips the switch" then the big box retailers are going to immediately become more successful. People shop at Amazon because of selection and price. If their local Walmart has the same thing for less, I would guess most of them go to Walmart.
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Post by phoebear611 on Jul 27, 2013 16:18:02 GMT -8
Today's NYT carried the article we were talking about on Friday re all the competition that AAPL has with other foreign phone makers as well. Not to be out-done, CNET headlines: "Nexus 7 finds Apple Napping ... Uh-oh: iPad Mini meets the new Nexus 7. It's not looking good for Apple at the moment." I won't bother to paste the link ... but here we go again. It never stops.
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Mav
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Post by Mav on Jul 27, 2013 16:21:09 GMT -8
Nexus 7 Take One Arrives; No Small iPad Response
Samsung S4 Arrives; No iPhone 5S Response, and It Probably Won't Be Enough Anyway
Oh, and for next year:
Samsung S5 Arrives; No iPhone 6 Response, and Apple Really Needs an iPhone 7 or 6S at Least Anyway
Nexus 7 Take 3 Arrives; No iPad mini 3 Response, but Who Cares, iPad mini is Too Big
Me? I laugh it off. Welcome to competition, journalists!
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Mav
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Post by Mav on Jul 27, 2013 16:23:46 GMT -8
At least Google actually has growth.
OTOH, the chart may be having an AAPL Oct '12 moment...
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JDSoCal
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Post by JDSoCal on Jul 27, 2013 16:32:40 GMT -8
Do you realize it took Apple only 27 days in the June quarter to record the profits that Amazon has needed 19 years to report similar net income? Think about that! Guess what year this quote is from:
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Post by rickag on Jul 27, 2013 16:41:35 GMT -8
Posts that accept Amazon's valuation as "it is what it is..." goes against my grain. Apathy drives me bat sh*t crazy. Any effort any of us makes to push back may have zero impact but no effort guarantees it. I don't really care about AMZN, since its biz model really has nothing to do with AAPL (I don't consider media delivery significant to either's bottom line). Of course its valuation is preposterous, & it should eventually end in tears and then everyone can say, "I told you so." It's GOOG's valuation that burns me. Of the 2, I'd Say that Google is the most vulnerable. The vast majority of their profits come from ads specifically ads through search. The most visible competitors right now are Yahoo and Bing. Both Yahoo and Bing have a very similar business model. Not saying that Apple will but that Apple could attack this business model two different ways. You can look at search in two different ways, one being people looking for information and other people looking to purchase some item or service Those people looking for information seem to detest ads and complain that the search results are littered with ads. Apple certainly has the resources and technical knowledge to provide a search engine. They could provide a search engine that is ad centric similar to Google, Yahoo and Bing but cut their portion of the ad revenue and turn it over to the advertisers. Or, they could provide a tiered search, one for information free of ads or very limited ads. And a search engine targeted for products and services. This would be more consumer friendly and provide a better experience for both people searching for information and people looking for products and services, Yelp comes to mind.
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Post by appledoc on Jul 27, 2013 16:53:33 GMT -8
Amazon has no competitors because nobody wants to enter an unprofitable market. If Amazon one day "flips the switch" then the big box retailers are going to immediately become more successful. People shop at Amazon because of selection and price. If their local Walmart has the same thing for less, I would guess most of them go to Walmart. I'd probably go to Amazon still. The price wouldn't be considerably different, and the extra cost is well worth the convenience.
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Post by Deleted on Jul 27, 2013 16:55:05 GMT -8
Can anyone else think of another company where sales growth was the primary argument for stock valuation, then collapsed or flat-lined?
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