Mac to go below $500?

[Urban Ranger]

Originally posted by Asher
The sound quality.

Really, nobody is going to notice the difference by sounds coming from a pair of tiny earplugs.

[Urban Ranger]

Originally posted by Asher
Real, smart, professional people who buy longterm stocks watch the P/E closely

If it's so easy, everybody will be making hand over fist in the stock market - but they aren't.

[Asher]

Originally posted by Urban Ranger
If it's so easy, everybody will be making hand over fist in the stock market - but they aren't.

It's very easy to make money in the longterm in the stock market, if you know what you're doing.

The vast majority of people trading stocks don't do a very good job. They panic, they rush, the sell...

For instance: Back in the early '90s when IBM was on the verge of collapse, investors paniced. The shares took a HUGE dive, to a fraction of the price it was a year before.

The smart investors -- my father included -- bought tons of IBM shares when they were ridiculously undervalued (with a P/E of something like 4-5...). They knew a company with THAT many intelligent people and THAT big of a reputation could turn itself around. And it did.

That's how you do it, my friend.

Mind you, there's always risk. Companies could be cheating (for example, Enron). But even then, if you actually keep up to date on the market situation, it's easy. My dad owned Enron shares until about four years ago. He was reading articles in Fortune and Business Week about how their whole business model worked with futures trading and whatnot. It sounded too "fuzzy" to him, too much room for fudging and bull****, so he got out of it...

[Az]

Apple's P/E: 90.83
Microsoft: 35.96
IBM: 20.96
INTC: 20.32
Citigroup: 15.28
Oracle: 24.54

Those are pretty high figures, for all of them, actually. ( Apple's is rediculous, though) Are 20ish P/Es standard for the NYSE?

[Kuciwalker]

Originally posted by Urban Ranger
What on earth is a higher vocabulary?

Ironic, this.

I like to introduce molly bloom to you, btw.

Yeah, he'd even out the Windows side on his own

[Agathon]

Asher, basically you are just thick. I mean, it's quite hilarious how far you will go to avoid admitting you are wrong.

Stock analysts do much more than you credit them for. If you were right, all they would do is create a bubble economy. This happens sometimes, but they are pretty gun shy in this respect now, especially after the last downturn. Why don't you try actually reading what they say instead of making your usual pathetic generalizations.

But wait... you are constitutionally incapable of anything else.

[Giancarlo]

Asher was right about those numbers given about the overvalued nature of Apple stock. And stock analysts do much more then we give them credit for? What about the 1920s leading up to 1929? They did a really good job then didn't they? Or what about Enron? Stock analysts merely make speculation. They aren't ones to determine the actual value of a company.

[lord of the mark]

Originally posted by Agathon
Asher, basically you are just thick. I mean, it's quite hilarious how far you will go to avoid admitting you are wrong.

Stock analysts do much more than you credit them for. If you were right, all they would do is create a bubble economy. This happens sometimes, but they are pretty gun shy in this respect now, especially after the last downturn. Why don't you try actually reading what they say instead of making your usual pathetic generalizations.

But wait... you are constitutionally incapable of anything else.

agathon is correct. Stock analysts attempt to evaluate stocks by forecasting companys cash flows, which for most companies involves analyzing market shares and other aspects of markets. They of course DO get this wrong from time to time, which is hardly surprising considering how many uncertainties there are. Company executives cooking the books (a la Enron) doesnt help, which is WHY such book cooking is illegal. Of course they ALSO look at other factors - if I figure out stock x is worth $10 based on long term cash flows, but I also think EVERYBODY else will soon think its worth only $5, and its now selling for $8, it makes sense to SELL, and buy later, DESPITE its long term prospects.

Oh, and if you are better at this sort of thing than professional analysts, you should be rich.

Shocking that only died in the wool commie seems to understand something about the efficiency of financial markets. Delightful though

[Agathon]

LOTM

I am amused by the irony as well. But still.. death to capitalism and all that.

Apple's stock is trading at what the market will bear. Fez, if you ever bothered to listen to an Apple quarterly conference call, all the analysts talk about are boring things like cash reserves, inventory, etc. I listened to the last one, hoping for some juicy product info, but it was mind numbingly boring.

[Giancarlo]

Apple's stock is NOT trading at what the market will bear. It is overvalued for a company that churns out nothing but crap.

[Agathon]

By definition it is trading at the price the market will bear. If it wasn't it would fall as people would be trying to sell it.

Why is it that you don't understand the most important principle underlying capitalism?

Here's a report from CNN Money - that bastion of liberal artsy anti-capitalism.

http://money.cnn.com/2005/01/03/markets/spotlight/aapl/index.htm

Shiny Apple?

Stock Spotlight: Shares more than tripled in 2004 thanks to the iPod. But what's next?
January 3, 2005: 10:50 AM EST
By Katie Benner, CNN/Money staff writer

NEW YORK (CNN/Money) - The cult of Apple found new life in 2004.

No longer just a company for devotees of its Mac line of computers, Apple was the hot tech stock last year thanks to its wildly successful iPod digital music player. Many users of PCs running on Microsoft's Windows could be spotted wearing the iPod's trademark white headphones.

But there was more to the Apple story than the iPod. Apple's fiscal 2004 sales grew in every one of its product categories, helping the company to consistently blow away earnings per share forecasts.

It's little wonder that Apple (Research) stock gained more than 200 percent last year, making it one of the best performers in the S&P 500.

The buzz doesn't seem to be dying down either. Rumors are starting to percolate about new product launches at the upcoming Macworld Expo to be held next week in San Francisco.

Some Mac watchers think Apple may unveil an iTunes compatible phone from Motorola, a flash-memory based iPod that would cost significantly less than other iPods and a cheaper version of its iMac computer.

And the company's fiscal first-quarter results, which should feature some boffo holiday sales of the iPod, are scheduled for release Jan. 12. Wall Street expects sales to increase 56 percent from the same period a year ago and for earnings to increase by 200 percent.

But Apple's renaissance has pushed the stock toward $70 from just $14 in April 2003. So is it too late for investors to grab a piece of the Apple pie?
We all scream for iPod

The sleek-looking iPod defined digital music in 2004.

According to data from market research firm NPD Group, the iPod recently captured more than 90 percent of the U.S. market for music players using hard drives. Including cheaper flash-memory based products, iPod accounted for nearly 60 percent of the entire digital music player market.

Sales of the iPod surged 279 percent in fiscal 2004 and as a result, revenue from the iPod and other music products, such as online music store iTunes, accounted for nearly 20 percent of Apple's overall top line in 2004.

But analysts say the company can't depend indefinitely on just music for growth as some think consumers will eventually crave a single device that does it all -- plays music, takes photos, makes phone calls and sends e-mail.

Apple did add photo storage capability to the iPod late last year though. And bullish analysts say that Apple, a notably innovative company, should stay ahead of the curve.

So don't rule out future versions of an iPod with even more multimedia features.
Big Mac?

Despite all the iPod hype, the Mac is still Apple's bread and butter. So no matter how popular the iPod gets, Apple will need to post solid sales and profit gains from its computer business. But some analysts think the iPod could be the best advertisement for the Mac.

In a recent survey conducted by Piper Jaffray, 6 percent of iPod users said they'd switched from PCs to Macs after buying the music player, and another 7 percent said they would make the switch in the next 12 months.

Overwhelmingly positive reviews of iPod, according to Piper Jaffray, have made the Apple name synonymous with customer satisfaction and reliability. And Apple bulls are banking on this so-called halo effect to lift sales of not only Macs but Apple's iTunes, iMovie, iPhoto and iDVD software as well.

Some Mac watchers also say mounting security problems that have hit computers running on Windows hard will leave consumers eager to purchase Macs, which have been relatively immune to worms and viruses.
Buyer beware

Despite the stock's strong performance in 2004, Wall Street analysts still have a mixed opinion on the stock. According to Thomson/First Call, eleven analysts have Apple rated a "buy" or "strong buy" while 12 have it rated a "hold."

Shares are trading at nearly 44 times fiscal 2005 earnings estimates of $1.49 so they are not cheap. Then again, earnings are expected to more than double this year and grow at an average rate of 20 percent annually for the next few years.

And the company does have nearly $14 a share in cash on its balance sheet. If you subtract that, the company's underlying business is trading at about 33 times estimates. That's still pricey but it's more in line with the P/E ratios of hardware companies Dell and Gateway.

So if you're a long-term investor, it's hard to find any worms in the Apple story. But investors should realize that the stock could be volatile in the near-term. Expectations for hot new products coming out of Macworld and strong earnings are so high that the slightest disappointment could trigger a violent sell off.

They are in fine shape. The stock looks higher P/E wise because of Apple's cash reserves.

These are facts Fez. You can't just assert that Apple is doomed for no reason, especially when the expert consensus is that they're looking pretty good right now for various reasons stated in the article.

[Giancarlo]

Originally posted by Agathon
By definition it is trading at the price the market will bear. If it wasn't it would fall as people would be trying to sell it.

You just don't get it do you... what makes it so difficult for you to understand? You don't anything about capitalism as it appears. First off, the market is based on speculation and bears no speculation on how the company is actually doing. Secondly, most of the Apple's market value is inflated. This happens. Like with Yahoo and other dot com companies before the bust. It went on for years.

Why is it that you don't understand the most important principle underlying capitalism?

Don't speak to me about capitalism as I'm an expert in it, and you don't know much about it.

They are in fine shape. The stock looks higher P/E wise because of Apple's cash reserves.

Again it goes moreso towards speculation of investors.

These are facts Fez. You can't just assert that Apple is doomed for no reason, especially when the expert consensus is that they're looking pretty good right now for various reasons stated in the article.

I never said Apple was doomed (not what I said).. only time will tell if that is the case and I make no predictions. But I'm saying it is not going to fare well in the computer market when it share continues to decline. You should read my damn statements before you make assumptions about what I said.

The expert consensus also said Enron was looking pretty good about five years ago.

[lord of the mark]

Originally posted by Giancarlo
Apple's stock is NOT trading at what the market will bear. It is overvalued for a company that churns out nothing but crap.

The stock is trading at what the stock market will bear, by definition.

It MAY however be overvalued. The market is NOT kept efficient (paradoxically) by people assuming that the price is correct. IF you feel you have real insight, and that you know some things that are not currently reflected in the price of the stock, you can make money by selling Apple stock short. Of course that means understanding if the fact you know IS reflected, which can be tricky, IIUC. EG, you may "KNOW" that Apples computer biz is in death spiral. You would then have to determine if its other businesses justify the current price. To do that youd have to understand the cash flows with the computer lines eliminated. Apples finanacial statements probably dont make it easy to do that.

[lord of the mark]

Originally posted by Giancarlo


The expert consensus also said Enron was looking pretty good about five years ago.

Are you suggesting that Apple has hidden liabilities that dont show on its financial statements due to trickery and fraud?

[Agathon]

Don't speak to me about capitalism as I'm an expert in it, and you don't know much about it.

I know this as I said and LOTM just repeated:

The stock is trading at what the stock market will bear, by definition.

You don't understand capitalism, if you don't understand this.

For all we know, Apple may be doomed. But we have no way of knowing that. Most of the people who predict this sort of thing for a living, say otherwise. In fact most are quite upbeat. It's rational to follow their lead unless you have some information they don't. I'm guessing you don't.