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Post by Zeke on Feb 3, 2014 19:22:39 GMT -8
This is just frustrating and never ending - Business Insider (ugh) pointing this out in an article: Samsung's Smartphone Software Is Starting To Look A Lot Like Apple's Based on all the legal nonsense and lack of severe punishment toward Samesung, what's the point of spending so much money on R&D only to be copied by these assholes. It really gets under my skin. Curious, what do some of the board's legal minds think of the performance to date of aapl's attorneys? JD? vs, Sammy? vs. book fiasco? Overall? TIA My take is that the fix is in. Google and Amazon have deep hooks into this administration, and the irrational decisions by Cote and Koh, plus the non-sanction by the other judge for Samsung's lawyers divulging privileged information pretty much says that Apple is being targeted by the feds. Political campaign donors and allies call up the administration and say that Apple is giving them headaches. "Can't something be done?" "Sure, we'll call the DOJ and have them apply a little pressure. And then once we get them in court we'll explain to the judges involved that the administration needs a favor or two. Apple won't know what hit them." "OK, great! We can't have Apple putting us out of business. We couldn't provide all that assistance again next time if we were hurting financially." It's that simple, and that brazen.
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Post by Zeke on Feb 3, 2014 19:32:26 GMT -8
+1 Can't prove anything anyway. I just find it a tad amusing that several people on the board recently wrote AAPL off, saying there were better stocks out there, and today the one stock that didn't go down was... You have to admit, some nice resiliency on a day like today. My guess is that Apple has already taken its lumps, and now looks pretty good with the rest of the market tanking. At any rate, I waited patiently all day and finally at 3 pm went from all cash to all AAPL again with a small profit. My main concern when I got out last week was whether $500 would hold as a bottom, or whether we would crash right through it on our way to $450. When it looked like $500 was holding I decided to get back in before dividends. After dividends it may be a different story. There's some chance that I jump back out for a month or two.
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Post by Deleted on Feb 3, 2014 20:18:51 GMT -8
If AAPL isn't going to trade on fundamentals, why be in it? It's a serious question. I'm a realist and the stock market is a big spin. It needs a big wrecking ball. If you agree with that, then it's time to join Elvis and leave the building. I've got one foot out...
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Post by Deleted on Feb 3, 2014 20:30:50 GMT -8
Really great GOOG and AMZN action today, though. They both need to drop a lot more before my Cheshire grin returns.
The cacophony of noise on CNBC, Seeking Alpha, etc. It's all so dysfunctional.
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JDSoCal
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Post by JDSoCal on Feb 3, 2014 20:33:45 GMT -8
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Post by Deleted on Feb 3, 2014 20:58:12 GMT -8
If AAPL isn't going to trade on fundamentals, why be in it? It's a serious question. I'm a realist and the stock market is a big spin. It needs a big wrecking ball. If you agree with that, then it's time to join Elvis and leave the building. I've got one foot out... So Apple isn't trading on Fundamentals now? It's a non growing company with a PE of around 12.5. Would I like it to be larger, of course...but not sure what's not priced in?
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JDSoCal
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Aspiring oligarch
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Post by JDSoCal on Feb 3, 2014 21:52:28 GMT -8
Since some here have talked about shorting (or longing) AMZN, an interesting article: Amazon Prime Was Too Good to Be True After AllNote the butthurt Amazon users in the comments, so funny. "You mean I can't have amazon subsidize my stuff at cost or less forever?"
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Post by leonb on Feb 3, 2014 22:12:37 GMT -8
If AAPL isn't going to trade on fundamentals, why be in it? It's a serious question. I'm a realist and the stock market is a big spin. It needs a big wrecking ball. If you agree with that, then it's time to join Elvis and leave the building. I've got one foot out... So Apple isn't trading on Fundamentals now? It's a non growing company with a PE of around 12.5. Would I like it to be larger, of course...but not sure what's not priced in? You are ignoring how cash heavy the company is. You cannot simply apply the usual risk multiple on operational earnings to all earnings including interest and get a comparable valuation. A P/E of 12.5 implies an earnings yield of 8%. You shouldn't really discount cash, but if you insist on applying a crude P/E to earnings, the right way would be to separate cash equivalent interest earnings and operational earnings, and find the weighted average earnings yield discount rate or P/E between them. Basically, if a no growth stable S&P company merits a discount rate of 8%, and has insignificant cash (relatively), then you need adjust this down for Apple to account for the cash earnings, which should be capitalised at maybe under 1%. It makes a big difference. An earnings yield of 6.5% equates to a P/E of close to 15.5. On $40 (your implied earnings) that makes no growth Apple $620. It's probably easiest to back out the cash, apply a no growth multiple (assume it's stable), and then add something for the "call option" (assume there's still innovation lurking and the next big thing surprises us - stable utility stocks can't surprise us in this way). So let's say $140 cash (some tax or inefficiency), and $440 for the no growth but stable operational earnings component (P/E 11, because cashless). The call option is v subjective, but I'm going to say 15% of the capitalised stable operational earnings, so another $66, because Apple is uniquely placed. It comes to $646. If I were not leveraged I'd hold close to that, but I am so I'd exit closer to $600 at this point, particularly with the way this thing trades! Anyway, everyone will have their own way of coming to a valuation, but applying a typical P/E to an atypical company is surely not the way!
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Post by bryanyc on Feb 3, 2014 23:54:46 GMT -8
OMG your are thinking somewhat rationally... stop it!
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JDSoCal
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Aspiring oligarch
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Post by JDSoCal on Feb 4, 2014 0:31:00 GMT -8
BTW, I'm on my fourth or fifth Amazon Prime trial ATM. Anyone looking to buy a gun safe or an air conditioner? Or a car?
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Post by Deleted on Feb 4, 2014 6:47:22 GMT -8
So Apple isn't trading on Fundamentals now? It's a non growing company with a PE of around 12.5. Would I like it to be larger, of course...but not sure what's not priced in? You are ignoring how cash heavy the company is. You cannot simply apply the usual risk multiple on operational earnings to all earnings including interest and get a comparable valuation. A P/E of 12.5 implies an earnings yield of 8%. You shouldn't really discount cash, but if you insist on applying a crude P/E to earnings, the right way would be to separate cash equivalent interest earnings and operational earnings, and find the weighted average earnings yield discount rate or P/E between them. Basically, if a no growth stable S&P company merits a discount rate of 8%, and has insignificant cash (relatively), then you need adjust this down for Apple to account for the cash earnings, which should be capitalised at maybe under 1%. It makes a big difference. An earnings yield of 6.5% equates to a P/E of close to 15.5. On $40 (your implied earnings) that makes no growth Apple $620. It's probably easiest to back out the cash, apply a no growth multiple (assume it's stable), and then add something for the "call option" (assume there's still innovation lurking and the next big thing surprises us - stable utility stocks can't surprise us in this way). So let's say $140 cash (some tax or inefficiency), and $440 for the no growth but stable operational earnings component (P/E 11, because cashless). The call option is v subjective, but I'm going to say 15% of the capitalised stable operational earnings, so another $66, because Apple is uniquely placed. It comes to $646. If I were not leveraged I'd hold close to that, but I am so I'd exit closer to $600 at this point, particularly with the way this thing trades! Anyway, everyone will have their own way of coming to a valuation, but applying a typical P/E to an atypical company is surely not the way! I mostly agree with you, but there are a few points I disagree with. Apple isn't a safe utility stock...it's in a industry where non growing companies typically get destroyed. People buy Utility stocks for safety. I don't think anyone think Apple (or any tech stock) is safe. Apple's probably the safest, but it's still relative. You can't judge the cash close to $140, because Apple has only recently started using it. They seem OK with 125B sitting overseas doing nothing, so why even count it? I'd deduct at at least $50 and up to $100/share from your model because of this. If Apple announces another major buyback this spring, that will signify a major change.
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