I've been an investor since 2007 and though I still fully believe in the company and its continued growth, I feel that the stock price's exponential growth in recent months is out of line with it's actual performance. Don't get me wrong, the price should be rising, but not this quickly. Broader market forces are at play in this and I would expect a market correction to occur in the coming weeks or months, which will have a significant effect on AAPL because it has a beta hovering around 2. Of course, the question is: When will the correction take place?
Ask HN: Would you still by Apple stock?
11–18 of 18 posts
Re: Ask HN: Would you still by Apple stock?
#12Yeah, there's still time to buy Apple Stock. I asked myself the same thing this time last year when it was around $300. Prediction: $800 by 2014.
Re: Ask HN: Would you still by Apple stock?
#13I would stay the hell away from it. I might start considering shorting it soon (but buy protective calls to hedge the short)
Re: Ask HN: Would you still by Apple stock?
#14I still would buy but observe the company closely and how they do with iPad3, iPhone5 and Apple TV... specially at launch and during/after the holiday season
Re: Ask HN: Would you still by Apple stock?
#15I had the same thoughts. In my experience, exponential growth in stock price is unsustainable, and usually results in a correction. Since the question is really how long do we have until a correction, I would say two to four weeks.
TL;DR - Don't buy now.
Re: Ask HN: Would you still by Apple stock?
#16I would buy it and I do think it will hit $800 or even up to $1,000 if it doesn't split. Why? In addition to all the exciting products they're putting out, they are JUST starting to get into the iPhone 4/4S business in China. The market over there is at least as big if not slightly bigger than the market here in the U.S. So is there room for them to double their cell phone market share? Yes, definitely. Does iPhones lead people to buy other Apple products like tablets and laptops? Yes.
Whether it's sustainable in the long term or not, there is definitely room for growth in the short term.
Re: Ask HN: Would you still by Apple stock?
#17Their launches are not beating customer expectations as they once used to - think iPhone 1, iPod, Nano, Air and compare that to today's launch of the iPad. Was that launch revolutionary, or modest?
This point alone doesn't mean that they are not a bet worth taking. But that, taken along with the fact that they're now facing tougher odds growing 20% or 30% per annum on already massive sales figures makes it harder to justify investing in them in order to make huge returns. (http://www.nytimes.com/2012/02/25/business/apple-confronts-t...)
Lastly, and most importantly, society, especially a free one, always finds a way to mobilize against those that are deemed too powerful. The simple argument here is that in order to scale past the law of large numbers and continue to deliver "predictable" growth to the Street, companies sometimes have to push against the limits of acceptable business practices. We have seen that with Walmart, Microsoft, Exxon, BP, AT&T not to mention the robber barons of old.
Free societies, especially representative democracies check such growth with regulation (sometimes necessary, sometimes far reaching, but in its ideal - self-correcting). The same sorts of regulations that prevented AT&T (of old think Ma Bell) and Microsoft from extending its reach, will soon affect Apple. One can argue, it already has. What with lax supervision of its subcontractors in China etc (Foxconn)
That said, I am very impressed with how quickly Apple responded to these accusations, and tended to being more open than closed. An instinct not easily attributed to Apple.
In closing. Apple is probably a safe place to park your cash to hedge inflation. Perhaps even enjoy 4-5% YoY growth averaged aver 10 years. But blockbuster, maybe not.
Re: Ask HN: Would you still by Apple stock?
#18There's a lot of talk about Apple starting to pay out dividends to stock holders. This could be huge for two reasons. The obvious being that you start making money now rather than waiting for capital growth. The second, less obvious, is that some investors hold the rule that you don't buy stocks that don't pay dividends. If Apple started to pay dividends it would open doors to even more investors. I would assume this…
I've been a shareholder since 2007 and I would seriously consider selling if they offered a dividend. Offering dividends is not what true growth companies with good plans for the future do. FWIW, I'm far from risk-averse; I wouldn't invest in a single company that offers a dividend due to the implied lack of growth and innovation that is implied by giving away retained earnings that could be used for R&D, strategic a…
This is correct. It would be a huge event if Apple started paying dividends and I'm fairly certain the market would not react kindly to that. The reason is, the market is pricing the Apple stock high due to what they think is coming in the future. They see lots of growth and expect the stock to increase in price. If Apple starts pay a dividend, that means they have decided that they aren't a high growth company anymore, and more of a stable giant (CocaCola, GE, etc). So all the analysts who thought they were going to have a certain amount of sales and growth have to readjust their predictions. Lower earnings predictions = lower stock price.