[tousuarshatly]

is there a problem with threads updating?

[Hsmrcahr]

Oh come on... you can't compare Apple with the dot.com bubble - unless you're going to say the same thing about Nokia for example. Apple are both a software company and consumer electronics company - their value isn't based on 'potential', their earnings and sales are very real.

When the NASDAQ is so heavily weighted by Apple, if and when Apple do have a fail, the market will be traumatised that it could well cause a crash. It'll happen; just hope that Apple's shares gradually fall rather than a complete hash happens and 20% gets knocked off in 5 hours.

[CIAFreeAgent]

I'd actually say that the price for Apple is very reasonable and that it doesn't have to keep on growing like gangbusters to achieve higher prices. That doesn't mean it can't decline, though. Investor disappointment in performance as a result of competitive forces could cause an exodus from the shares even though the current price actually discounts very modest estimates for future growth. People tend to invest emotionally and there's certainly room for P/E compression even at Apple's currently low P/E.

Also, like I have said above, growth is not a given for Apple. Carriers aren't in love with the Apple business model (because it hurts their own) and they are powerful entities - they're actively pushing other products into the market and seeing what sticks. Obviously Android's doing "OK." With enough pushing, Apple could get pushed out. Certainly not completely, but almost certainly into less favorable subsidy deals, lower prices, etc. That all means lower margins and/or lower growth in unit sales. Beyond this, brand value and "cool" are two of the easiest business moats to breach. Or, perhaps more appropriately, the two most likely to simply dry up. You can't manufacture or design "cool," necessarily. It often materializes on its own as a consequence of all sorts of unpredictable factors. You can lose it before you know it, though.

It seems like Apple is untouchable right now, but there is no shortage of big, powerful, innovative and well-capitalized companies competing head on with them. The only guaranteed outcome is that nobody's position at the top is secure. Nokia is a wonderful example of precisely that, and precisely how fast change can come even to the untouchables. Nokia went from a titan of industry with a golden brand name and nearly 100% smartphone market share to a laughing stock that's barely hanging on to life in just a few years.

Once again, I think it's not an unreasonable contrarian position to see a company that is at the top of its game, that can do no wrong and that is running full-speed and think to yourself, "Why they're just one misstep away from falling flat on their faces!" That people love to see top dogs get beaten up is a natural corollary to our love of betting on underdogs.

Objectively, Apple seems like a wonderful investment that's likely to make you money. Emotionally, it's a big, evil empire that deserves to be taken down a notch. It's natural that there are people in the market taking either side of the bet.

I wouldn't make bets on Apple's earnings going either way, though. If you want to invest in this, I think the right strategy is buy and hold.

[MilenaMKB]

Is most of their value on paper or in investments, assets, etc? Their value is because their stock is way overvalued. You know it, I know it, anyone watching them know it. They are a solid company, but their stock price is halfway priced on the coolness factor too. And like nokia, it won't last. A samsung will come along and take their share too.

Apple tv *might* be their last big thing. The might is because, it could just as easily fail. After that, the cool stuff will be coming from google (hud glasses) and microsoft (fold-able computers/smart phones). It will be really tough for apple to retain the coolness factor when they are patented out of the market.

No way would I buy apple stock today at this price. And those that are, are playing a crazy game of russian roulette.

Do you really look at their valuation being twice that of exxon (or anyone else for that matter) and not scratch your head?

Until I read this post I thought you knew what you were talking about

[Rugda]

Until I read this post I thought you knew what you were talking about

LOL. Tell me again who the largest company in the world is? Not your opinion...

Tell ya what. You think I am so clueless. Why don't you put your life savings into apples stock at today's price. In 5 years, we will see who was right. It is a sure thing, it seems in your opinion. What have you got to lose?

My guess: -30% minimum

[agrismhig]

LOL. Tell me again who the largest company in the world is? Not your opinion...

Tell ya what. You think I am so clueless. Why don't you put your life savings into apples stock at today's price. In 5 years, we will see who was right. It is a sure thing, it seems in your opinion. What have you got to lose?

My guess: -30% minimum

I don't think you're clueless at all. I just thought you were more of an expert than you are.

As soon as you started trying to equate Apple's wealth to coolness you lost me. Do you really think that people buy Apple shares based on the fact that they are cool? I have never met anyone that plays the stock market that is that fickle.

Apple know what people want. It's that simple.

[viagsjicguara]

I don't think you're clueless at all. I just thought you were more of an expert than you are.

As soon as you started trying to equate Apple's wealth to coolness you lost me. Do you really think that people buy Apple shares based on the fact that they are cool? I have never met anyone that plays the stock market that is that fickle.

Apple know what people want. It's that simple.

Whilst people wouldn't buy Apple shares to then have a tattoo on their arm with the number of shares and certificate number, it's plausible share price it's linked to cool factors. Burberry, French Connection were all cool at one stage, which drove up profits and share price, which made it cool to own. Dre Beats are cool to own, whether we like it or not, and staff at PC World walk around with them at their necks. Fads come and go; Apple will come and go. Just when will it peak?

[Lgcjqxlw]

Fads come and go; Apple will come and go. Just when will it peak?

Apple are not a fad. I know you'd like them to be, but they are not. They have been around as long as Microsoft and gone through a lot of tough times. What's happened here is that PC guys are used to Apple being the underdog and now that they have started making desirable products you're all upset about it.

Please explain to me what about iOS or OSX is a fad? A good user interface? You're right, nobody actually wants that.

[mvjvz]

Apple are not a fad. I know you'd like them to be, but they are not. They have been around as long as Microsoft and gone through a lot of tough times. What's happened here is that PC guys are used to Apple being the underdog and now that they have started making desirable products you're all upset about it.

Please explain to me what about iOS or OSX is a fad? A good user interface? You're right, nobody actually wants that.

Times change, quite rapidly. Like everything, eventually there will be a time when they peak or something to replace it. We'll know whether Apple has built itself to withstand the market without Jobs. Maybe, more critically, it is Ive who is responsible for bringing Apple to where it is now; and his departure may start a downward trend. We'll know for certain once all of the old guard have moved on. For now, Apple has a huge market opening in China, so should be booming - who knows after that.

[Ervins Dervish]

Maybe, more critically, it is Ive who is responsible for bringing Apple to where it is now; and his departure may start a downward trend.

I can't stress how much that isn't true. Don't get me wrong, his ego thinks that's true and he is an exceptionally talented designer, but it's like Chris Moyles telling everyone he saved Radio 1. It just ain't so.

Someone had to sign off on his designs, and he will have submitted at least four or five for consideration. The wrong one could have been chosen.

Had Ive been put in charge of Apple instead of Tim Cook I could agree with you about them getting into trouble. My personal feelings are that he is an pompous, egotistical megalomaniac whose only skill is design.

[Biradallo]

When I say coolness factor is priced into their stock, I don't mean a great deal of people own apple stock because they think it makes them cool (though undoubtedly, there are some). I mean, they see the company as cool, the overall perception the products are seen as cool, and because of that, people will continue to buy apple products until they aren't as cool.

They see douchebag's with apple stickers on their back car window too. Lots of them. How many people drive with microsoft/ibm/nokia stickers on rear window of their car? Coolness plays a ton into apple stock. And the thing about cool is, you either are or are not. There is no in between. Thus, the day apple no longer is cool, is the beginning of the end of beating last quarter.

[Loovikeillilen]

Is most of their value on paper or in investments, assets, etc? Their value is because their stock is way overvalued. You know it, I know it, anyone watching them know it. They are a solid company, but their stock price is halfway priced on the coolness factor too. And like nokia, it won't last. A samsung will come along and take their share too.

Sorry mate, but that's nonsense. It's not just that I disagree, it's that it's literally nonsense. Apple's P/E is relatively low, especially given that $150bn of the value is literally reflected by their net assets. They are actually under-valued by almost any objective measure.

When you look deeper, for example the PEG ratio (growth to price ratio) Apple is even further under-valued - it's less that a quarter of the NASDAQ average. Apple is rated as only at 15% of its true value, compared to the NASDAQ which is 60% of it's true value.

Apple tv *might* be their last big thing. The might is because, it could just as easily fail. After that, the cool stuff will be coming from google (hud glasses) and microsoft (fold-able computers/smart phones). It will be really tough for apple to retain the coolness factor when they are patented out of the market. The market for tablets, e-books, streaming content etc has barely got going. There is enormous growth potential in that space internationally. Apple is one of the very few companies that has all three things needed to make this a success - hardware, software and content. Google, MS, Nokia, Samsung etc don't have the full package. Now perhaps other models will prevail, but so far in the post-PC world, that's not proving true. Even Amazon has recognized this by releasing the Kindle Fire. The reason Sony lost to Apple in the MP3 market, is because they couldn't write good software for either the device or the back-end.

No way would I buy apple stock today at this price. And those that are, are playing a crazy game of russian roulette.

Do you really look at their valuation being twice that of exxon (or anyone else for that matter) and not scratch your head? Yes absolutely, but not for the reasons you said in your opening.

[SOgLak]

Sorry mate, but that's nonsense. It's not just that I disagree, it's that it's literally nonsense. Apple's P/E is relatively low, especially given that $150bn of the value is literally reflected by their net assets. They are actually under-valued by almost any objective measure.

When you look deeper, for example the PEG ratio (growth to price ratio) Apple is even further under-valued - it's less that a quarter of the NASDAQ average. Apple is rated as only at 15% of its true value, compared to the NASDAQ which is 60% of it's true value.

So basically you're saying you are still buying the stock at these levels?

[LarryRda]

So basically you're saying you are still buying the stock at these levels?

Honestly, is there a reason why you wouldn't? Apple is still growing in China, and pretty well. Whether people think it is grossly overpriced or not, there's not really much outside of governments banning Apple products that can drive down their sales.

[AALee]

So basically you're saying you are still buying the stock at these levels?

Personally I am focusing on more stable dividend paying stocks, so not right now as it doesn't suit my personal circumstances but I am not trying to give financial advice here. All I have argued against here is the rather absurd comparisons to the late 90's bubble, which was where any random website with 200 hits a day was being valued in the millions. If we can at least remove the noise from this conversation, I'd be happy to have a serious debate about whether anyone should buy the stock at its current price.

If pushed, I'd say currently for day traders, buy below $575, sell above $615 - the volatility is there to make some money, many already are. If you're looking for a return in the 18 months period, I'd buy anytime it's below $580 and up to $650, then hold, over a period of time. For a 5 year return, I might not buy unless it was only a small part of my portfolio - but I still think anything below $575 will hit a return even in that timeframe.

As a disclaimer, I already have AAPL at well below current market (a chunk at less than $100 and some between $170 and $200).

[Adollobdeb]

What I have learned from this thread is that a lot of people are completely incapable of differentiating between expensive and over-priced.

[syncFisee]

What I have learned from this thread is that a lot of people are completely incapable of differentiating between expensive and over-priced.

Well, at least there is consistency there - they say the same things about the products too!

[casinobonbone]

If you're looking for a return in the 18 months period, I'd buy anytime it's below $580 and up to $650, then hold, over a period of time. For a 5 year return, I might not buy unless it was only a small part of my portfolio - but I still think anything below $575 will hit a return even in that timeframe.

Cutting all the disclaimers away, that's the part of your answer I was looking for!

It is indeed quite amazing that the biggest company in the world still actually seems undervalued using standard valuation methods. And your classic PE ratio is not even based on estimations. I reckon you are right on pretty much all counts, the way it looks, the stock should be outperforming for the next few years.