Quote:
Originally Posted by djevans
I think there is a lot of manipulation with AAPL. A company that has 140 billion cash - adding 40~ billion more per end of year - has great potential for growth - has no debt - and makes a great product - when it's stock price falls 40% I just think it's someone manipulating the market.
Quote:
Originally Posted by WorldBoFree
I mean what a bizarre world it is when a company like APPL drops that much when it has a very profitable two years and has a hoard of cash, and a big market share. In the fact of the market in a pretty epic bullish run.
Then its stock jumps on a day when it's closest competitor in the phone market makes a big announcement that actually meets expectations.......but APPL stock goes up, because it didn't blow minds.
That there pretty much says it all.
I know, I know APPL stock was inflated to begin with, but my point is, the rational of the buyers in the market is so laughable. The mob mentality is amusing.
I bought it at $458 and $430, and people were calling me a fish, maybe I still am, but either way it's all pretty laughable. If I'm a fish, it's only because the market is driven by fish! LOL.
You guys just aren't thinking rationally about this.
The fact is that Apple has a single product that justifies a valuation above $250 billion - the iPhone. Ask yourself:
- How much profit does the iPhone bring in each year?
- What was the average lifespan of every mobile phone hardware or OS leader?
- Why has Android gone from nowhere in 2010 to 70% of smartphone sales market share in three years (vs Apple's 20%)?
- What would happen to Apple's profit margins if telcos stopped giving it massive preferential subsidies, which they will want to do as viable, consumer desired alternatives (Android, Windows Phone, Blackberry) become good enough to push the iPhone aside?
- What will happen over the next 2-3 years as Windows 8 & 9 achieves penetration to hundreds of millions of desktops (this is guaranteed), and the Windows/Windows Phone store starts to rival iOS from that penetration? If you have Windows 8 at home and a bunch of apps, you'll want them on your phone/tablet too given the tight integration. What will happen when Windows 8/9 gets penetration in business and they roll out Windows Phones instead of iPhones due to the back end integration?
Let me put it this way, with two questions:
- What are the odds of Apple earning their market cap ($420 billion) before they go bust?
- What are the odds of Microsoft earning their market cap ($235 billion) before they go bust?
The answers are <50%, and nearly 100%. This should give you an idea of the relative worth and diversification of each company. Apple has its valuation based solely on explosive continued iPhone growth - which it hasn't innovated in five years - while competitors have taken over the space. It was also growing into an exploding market, which is slowing down over the next couple of years.
I do think they can have a short time spike (think 3-6 months) with a breakout quarter - indirect market share data I've looked at shows massive breakout sales in January/February that could send the market crazy come earnings next month - but after that it's probably downhill unless they come out with something new and amazing. Which is going to be what? Telcos aren't going to subsidize new products. Margins on TVs and watches are going to be far smaller because they won't be heavily subsidized by telcos.
The market's response to Apple has been rational given the information at each point in time.