PowerBook is dead; MacBook Pro is here (Intel-based)

[Agathon]

The problem is, people buy them believing that they will get a return on their investment. They think the price will continue to increase. It is completely possible for a company to never make money and have its shares increase in price -- if people keep wanting to buy the stock, that's what will happen.

Sure... but that's a lot different from claiming that the share price is not indicative of some underlying "real value", since there is no such thing in capitalism. Prices reflect preferences and that's it.

Comparing the value of stocks to the value of Reeboks shows just how little you understand of the market.

You have to be joking right? The point of capitalism is that the price system allows you to do just this. In fact, if we didn't have currency and had a barter economy, there would still be set amount of Reeboks that you could swap for Apple shares. Money just makes it a lot easier to track value since it converts all our bartering preferences into one easily understandable figure by introducing an artificial commodity that is completely liquid.

[Asher]

Agathon, this is why I think Philosophy in university is useless.

It is so disconnected from the real world, that it becomes an academic semantical circle jerk instead of anything productive.

[KrazyHorse]

Originally posted by Lawrence of Arabia

doesnt matter. thats still the way it is.

the question is not if it will happen, but if it can happen.

And the answer is it can't.

[Agathon]

Agathon, this is why I think Philosophy in university is useless.

It is so disconnected from the real world, that it becomes an academic semantical circle jerk instead of anything productive.

Really?

I think it's proved quite useful in this debate. What philosophers do is refuse to take for granted the assumptions that most people do. Since you argue from assumptions which you are completely uncritical about, and are incapable of viewing critically, it is no surprise that you find philosophers irritating.

That is what has happened here. Your view of the market is one culled from business sections and lowbrow TV reports. It would be better if you actually sat down and tried to think about the basic ideas that make it work, instead of being seduced by the silly narratives that circulate in the press.

I mean Jesus Christ... you said that the value of shares could not be compared with the value of Reeboks. Again: the whole point of the price system and the use of currency is to do just that. If you had thought about it, you wouldn't have said such a boneheaded thing.

[Asher]

Originally posted by Agathon
Really?

I think it's proved quite useful in this debate.

Indeed -- bandwidth has been wasted, time has been wasted, and you've demonstrated a completely off-based account for how you think the markets work.

What we started with was you bragging about the market cap of Apple, and what we ended with was people with more knowledge about the market telling you why that's crap.

[Q Classic]

Originally posted by Agathon
All this is moot. I don't really care whether Apple is worth more than Dell except that it is amusing to poke fun at Michael Dell, who claimed less than a decade ago that Apple's stock was so worthless that the company should fold and sell all its chattels, dividing the money between the investors. Since Apple's shares are now worth more than Dell's I imagine that he's getting a few amusing emails.

Actually, I doubt he's getting very many emails about it at all. Largely because... nobody except those who have a false sense of persecution really remember that sort of ****. You know, kinda like how some fundie Christians can remember some small slight about some commandment or another in some tiny town in some dumb state. The rest of the world... moves on.

That said, you didn't initially claim that Apple is worth more than Dell; your argument was about company size, which is what we're correcting.

If you want to talk about Apple being worth more, then there are multiple ways of going about it. One is, yes, stock price. Another is brand name value.

===

That said, you really didn't help your case by saying that the Mighty Mouse was worse than the iMac circle mouse.

Why? Because in that particular case, you're flat out wrong. The Mighty Mouse might not be the best solution, but it's sure as hell better than the Circle Mouse.

[Q Classic]

Originally posted by Agathon
I think it's proved quite useful in this debate. What philosophers do is refuse to take for granted the assumptions that most people do.

That, Agathon, shows your assumptions and biases--you seem to be suggesting that just because one rejects preconceived notions about certain topics, one's argument somehow... is automagically more critical and intelligent.

That's not always the case. I refer you to Intelligent Design, where many who argue for it, "philosophers", if you will, refuse to take for granted the assumptions that most (intelligent) people do. Y'know, the whole body of evidence which strongly disagrees with ID.

Since you argue from assumptions which you are completely uncritical about, and are incapable of viewing critically, it is no surprise that you find philosophers irritating.

The only problem is, his arguments, echoed by most of the others on this board, tend to follow the basic definition and principles with how the whole stock pyramid scheme market works.

Now, you can reject those definitions and assumptions, but that doesn't necessarily make your argument intriguing, incisive, or correct.

[Fake Boris]

Originally posted by Imran Siddiqui
Warren Buffet isn't a capitalist? He has his own intrinsic value formula for investments, after all (which he ain't sharing.. because, well, that's how he makes money).

Sure, everyone knows that after the course of an extended period, shares always tend to stabilize around a reasonable price - i.e. that in the long run, people pay for a stock what it can really give them back. But there's nothing "intrinsic" about that; it's still just the opinion of a bunch of investors.

Warren Buffet is a succesfull investor, and if he's made it there, it's probably because he has a great instinct at predicting how much people will be willing to pay for stock. If you are going to use a heavily charged metaphysical term to describe something that doesn't need it to be accurately reflected, what can I do, save asking you where is your commonsensical skepticism gone?

[Agathon]

Originally posted by Q Cubed

That, Agathon, shows your assumptions and biases--you seem to be suggesting that just because one rejects preconceived notions about certain topics, one's argument somehow... is automagically more critical and intelligent.

That's not always the case. I refer you to Intelligent Design, where many who argue for it, "philosophers", if you will, refuse to take for granted the assumptions that most (intelligent) people do. Y'know, the whole body of evidence which strongly disagrees with ID.

There aren't many philosophers who argue for intelligent design. Most religious philosophers tend to be fideists. The best arguments against it are made by other philosophers. A lot of the scientists who "argue" against it tend to miss the point somewhat and rely on dogmatic assertions.

The only problem is, his arguments, echoed by most of the others on this board, tend to follow the basic definition and principles with how the whole stock pyramid scheme market works.

Now, you can reject those definitions and assumptions, but that doesn't necessarily make your argument intriguing, incisive, or correct.

Goody. The fallacy of majority belief. His "arguments"? He doesn't have any arguments. It's simply a fact that, in capitalism, the only measure of worth is what people are prepared to pay for something for whatever reason. You can make predictions about what people will be prepared to pay for something in the future, but talking about some sort of "real" underlying value is anathema to capitalism.

It doesn't bother me at all that people disagree with me. Hell, half the people on this board who claim to support capitalism end up having to be told what it is by CPA members. Now that's funny.

[Q Classic]

Originally posted by Agathon
There aren't many philosophers who argue for intelligent design. Most religious philosophers tend to be fideists. The best arguments against it are made by other philosophers. A lot of the scientists who "argue" against it tend to miss the point somewhat and rely on dogmatic assertions.

And yet, the point remains.

Goody. The fallacy of majority belief.

Just because the majority believes in it, doesn't mean it's a false assumption or wrong. The majority believes and assumes in things like gravity, that people need air to live, and the like, too. While I'm aware that being in the majority doesn't make one correct ( flat earth, for example ), in this case, one ought to use the majority's definitions when trying to argue and discuss such concepts--why? Because it's the way the majority works with respect to stocks and capitalism. If you're going to throw out terms like market cap and so forth, it makes sense to...use the definitions set by them.

Now, if you want to take the meta route, go ahead. But that won't make your argument any more compelling.

What it boils down to is that your argument seems to be that Apple is one of the most valuable companies on the market, if only based on market cap. That's fine (even if most analysts would disagree).

My only beef with you is that you tried to use that to suggest that Apple, as a company, was larger than, say, Dell or Sony.

It's simply a fact that, in capitalism, the only measure of worth is what people are prepared to pay for something for whatever reason.

I don't suppose that this is a very Marxist definition, is it?

[Asher]

Originally posted by Agathon
No. It's market value. I was being loose with language. In a capitalist society the worth of a company is what people are prepared to pay to own it.

In amusing news today Apple is now worth more than Dell. I imagine that Jobs will send Michael Dell a revenge email.

You're close in how juvenline Jobs is:

http://news.com.com/Jobs+suggests+Dell+should+eat+his+words/2100-1041_3-6027361.html?tag=nefd.top

Jobs suggests Dell should eat his words
By John Markoff
The New York Times
Published: January 15, 2006, 10:00 PM PST

It may not be the last laugh, but on Friday afternoon, after the close of the stock market, Steve Jobs, the chief executive of Apple Computer, shared an e-mail chuckle with his employees at the expense of Dell, a big rival.

The message was prompted by the 12 percent surge in Apple's stock price last week, which pushed the company's market capitalization to $72.13 billion, passing Dell's value of $71.97 billion.

In 1997, shortly after Jobs returned to Apple, the company he helped start in 1976, Dell's founder and chairman, Michael Dell, was asked at a technology conference what might be done to fix Apple, then deeply troubled financially.

"What would I do?" Dell said to an audience of several thousand information technology managers. "I'd shut it down and give the money back to the shareholders."

On Friday, apparently savoring the moment, Jobs sent a brief e-mail message to Apple employees, which read: "Team, it turned out that Michael Dell wasn't perfect at predicting the future. Based on today's stock market close, Apple is worth more than Dell. Stocks go up and down, and things may be different tomorrow, but I thought it was worth a moment of reflection today. Steve."

Dell executives did not return calls over the weekend asking for comment on Apple's rising fortunes.

Dell appears to have softened his views on Apple recently. In June, he responded to an e-mail inquiry from CNET News.com and said that Dell would consider putting Apple's OS X operating system on its machines if Apple ever decided to sell it separately from its hardware.

Although Jobs has recently shifted some gears and last week introduced his first computer based on chips from Intel, which are also used in Dell machines, it does not appear that selling the operating system separately is in his plans.

Since returning to Apple, of Cupertino, Calif., Jobs has revitalized the company's computer business and created its wildly successful iPod division.

In 2000, after pulling the company out of its financial nose dive, Jobs was awarded a corporate jet and options to purchase 10 million shares.

In 2003, Jobs's options--by then, the number had risen to 55 million--were exchanged for a restricted stock grant of 10 million shares, which will become vested in March. At Apple's closing price on Friday of $85.59, his stake in the company is worth some $855.9 million.

Dell's stock closed at $30.58 on Friday, down from a 52-week high of $41.99. But Dell's personal wealth still exceeds that of Jobs, despite the fact that Jobs also has a 50.1 percent share in Pixar Animation Studios that is worth about $3.4 billion.

Last year Dell, who founded his namesake company as a college student in 1984, was ranked fourth on Forbes magazine's list of the 400 wealthiest people in the United States. It estimated his personal wealth at $14.2 billion.

He conveniently ignores how much more profitable Dell is.

[Agathon]

Originally posted by Q Cubed

And yet, the point remains.


Just because the majority believes in it, doesn't mean it's a false assumption or wrong. The majority believes and assumes in things like gravity, that people need air to live, and the like, too. While I'm aware that being in the majority doesn't make one correct ( flat earth, for example ), in this case, one ought to use the majority's definitions when trying to argue and discuss such concepts--why? Because it's the way the majority works with respect to stocks and capitalism. If you're going to throw out terms like market cap and so forth, it makes sense to...use the definitions set by them.

Now, if you want to take the meta route, go ahead. But that won't make your argument any more compelling.

What it boils down to is that your argument seems to be that Apple is one of the most valuable companies on the market, if only based on market cap. That's fine (even if most analysts would disagree).

My only beef with you is that you tried to use that to suggest that Apple, as a company, was larger than, say, Dell or Sony.

For God's sake dude.. stop flogging a dead horse.

I said about three pages ago that I was using language loosely when I described Apple as a "bigger" company than the others. In terms of what it's worth it is. If you want to use some other standard for bigger (more plants, more toilets, whatever) go ahead... it's besides the point.

I've been amusing myself in the last page or so defending the commonsense notion that the value of a commodity in a capitalist system is what people are willing to pay for it. Since that's the bedrock of the capitalist system it should go without saying. People who claim anything different do not understand the capitalist theory of value.

I find it insanely funny when so-called capitalists start complaining about the adequacy of market price as a means of determining the values of commodities, since this is the key point of departure for Marxists and other critics of capitalism. It's no argument to point to stock bubbles and so on, because the existence of these just indicate that the market value will change in the future - it doesn't indicate something different than market value.

And I didn't say Apple was one of the most valuable companies on the market (at least I hope I didn't). There are probably lots of companies that it would cost more to buy.

[Nostromo]

In related news...

http://www.youtube.com/watch.php?v=1mnDJIeJQAw

[Q Classic]

Originally posted by Agathon
I said about three pages ago that I was using language loosely when I described Apple as a "bigger" company than the others. In terms of what it's worth it is. If you want to use some other standard for bigger (more plants, more toilets, whatever) go ahead... it's besides the point.

Except what I'm arguing is that your notion of what it's worth isn't the notion that most analysts and economists use. You're relying only on market capitalization, on the value of its stock, completely ignoring any liquid and invested assets.

As far as I understand, in this capitalist society, such things aren't ignored when calculating value and worth.

Also, you're the only one I've ever known to use "big" to describe "value".

Scratch that. McDonald's uses it on their value menus, I'm sure.

[Asher]

Investors begin to get wary of Apple stock...

http://www.forbes.com/technology/free_forbes/2006/0130/043.html

This Apple Is Too Shiny
Michael K. Ozanian, 01.30.06

The fashionable iPod has made Apple Computer beloved on Wall Street. But its success masks an erosion in the company's profitability.
When final sales figures for the Christmas shopping season are tallied, look for shares of Apple Computer to get another boost. The world is in love with the iPod, and Wall Street is in love with Apple. Sales of the iPod's newest version, the $299 video pocket player, are likely to top 4 million units for the first quarter, ended December 2005. That would add perhaps $142 million to the company's pretax earnings, which were $1.8 billion in the most recent fiscal year.

The iPod, which has 76% of the MP3 music player market in the U.S. and 50% in Japan, has turned Apple into the kind of darling it was when it went public a quarter of a century ago. In the past four years Apple's shares have climbed sixfold to $72, or 46 times trailing earnings. The hip brand image has infected the rest of the company's product line. In fiscal year 2005 Apple sold 4.5 million computers, 38% more than it did the year before. Apple's top line for the year ended September 2005 was $13.9 billion, better than double what it was four years earlier.

But this sales bounty masks a worrisome downward trend in profitability. Apple's computer business, which contributes 45% of sales, has a gross margin of 30%, estimates Eugene Munster of Piper Jaffray; the iPod, with a 33% (and rising) share of sales, has a margin of only 20%. The other businesses linked to the iPod do little more than break even, analysts estimate: The iTunes Music Store earns at most 4 cents pretax on each 99-cent download for Apple, and iPod videos, which sell for $1.99, have a similar margin.

Apple's iPod and music businesses are growing much faster than its computer business. Last year sales of iPods rose 248% to $4.5 billion, and sales of iPod services and accessories, like repairs and car chargers, rose 223% to $899 million. But computer sales were up only 27%.

It is highly likely under these circumstances that Apple's overall gross profit margin will decline. Apple has been steadily lowering the average selling price of its pocket players, from $415 in 2001 to $188 last quarter. Says analyst Munster: "The newer markets for the iPod are more price sensitive."

Apple declines to discuss the profitability of the different versions of the iPod. But in its financial statements the company says that it expects price competition to put pressure on gross margins for all consumer electronics industries and "especially for the iPod product line." Aiming to stay two steps ahead of its rivals, Apple competes with itself. It stretched the first six iPod models out over two years but the last eight over only eight months. (Currently available are the Shuffle, the Nano and the video player.) This planned obsolescence has reduced the amount of time the company has to recoup its development costs on each product. The Nano, released in September 2005, has the lowest gross margin of any iPod, says Munster--about 18%.

Several of the 15 analysts with buy recommendations on Apple (a group that includes Munster) say the company could increase its profitability by cutting costs. But this is going to be hard to do. Apple has already reduced spending on research and development from 8% of sales in 2003 to 4% last year. In contrast, Creative Technology, number two in the MP3 market, with a 14% share globally, spends 7% of sales on R&D, as does Sony Corp. Apple's overhead and selling costs have fallen from 20% of sales to 13% the past two years, well below Creative's and Sony's. And how can Apple cut much more from component costs? Apple has a deal in place through 2010 to get its flash memory from Hynix, Samsung, Intel, Toshiba and Micron. Memory is the most expensive element of the iPod 4GB Nano and accounts for two-thirds of the total parts cost.

Inspiring the bulls, Apple delivered fourth-quarter 2005 earnings of 50 cents a share, almost quadruple those of the prior year. But 12 cents of those earnings were related to one-time tax shifts. Without that shot in the arm Apple's growth rate would have been half of what it averaged the previous three quarters. According to an analysis by Goldman Sachs, Apple's return on invested capital peaked in the March 2005 quarter at 13.2%. In the September quarter this number fell to 9.7%. (Next earnings report was due Jan. 18, just after this article went to press.)

The bulls hope that the introduction of Intel chips into Apple computers this year will drive Apple's share of the personal computer market from its recent 2.5% back toward the 10% it enjoyed 15 years ago. Another hopeful thought: Because only 8% of U.S. households own an iPod, Apple can sell a lot more.

But once you turn down the hosannas on the music player, you are left with a company with no hammerlock on the technology (Creative holds the patent to the interface for MP3 players) and no unique operational advantages (such as Dell's made-to-order computers). Founder-evangelist Chairman Steve Jobs has a cult following among certain computer users and the mostly worshipful attention of the business press. But it is unlikely that even his magic touch can alter the grim economics of consumer electronics gadgets: After a while they become commodities subject to vicious price competition. It happened to Sony's color TV, to Motorola's cell phone and to IBM's PC. It takes a lot of guts to take on an icon like Steve Jobs, but Apple admirer Andrew Neff of Bear Stearns lowered his rating from a buy to a hold in mid-December.

Predictions for the start of the stock crash?

I'm going to say end of March.