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Apple Stock Just Crashed To A New Low

businessinsider.com

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Re: Apple Stock Just Crashed To A New Low

#11

Post by far_far_away »

6thSigma wrote: post #6
far_far_away wrote: post #5

Earlier quoted context omitted.

This is so true and I am glad that I am not the only one who thinks that way. In addition to that one could argue that investing in stocks (whatever the industry may be you are investing in) is a bad thing if you are not an insider. My brother who is a hacker and economist at the same time showed me studies that determined/proofed that the stock market is very irrational (I mean we all knew that but those studies sho…

The day to day of the stock market is irrational, but long term investing isn't. If you're putting money in the stock market and not looking out 5+ years, you are simply gambling.

This heavily depends on how the companies you are investing in perform in the mid-term. It is true that the stock market out performs other kind of investments but this is only true if you are not investing in let's say 2-3 companies but rather in an index or something similar. Investing in an index is much much less exciting than investing in 2-3 companies.

Re: Apple Stock Just Crashed To A New Low

#12

Post by tptacek »

cincinnatus wrote: post #10
recoiledsnake wrote: post #3

As recently as mid-October, the stock was billed to be getting close to $1000. http://appleinsider.com/articles/12/10/16/analysis-apple-sto... http://www.forbes.com/sites/gurufocus/2012/10/05/apple-stock...

And in a rational world it would be. It's P/E ratio is crazy low compared to Google and Amazon just in raw terms. But the market is an irrational place, it only looks sane in aggregate and over longer time periods. The rational part of me says it will be over 1k within a year, regardless of how irrational I know that thought to be :-)

Apple's P/E isn't comparable to Amazon's. The two companies execute radically different strategies. Amazon relentlessly spends profits to capture market share; Apple is famous for being the profit share leader in the markets it sells in.

Re: Apple Stock Just Crashed To A New Low

#13

Post by recoiledsnake »

cincinnatus wrote: post #10
recoiledsnake wrote: post #3

As recently as mid-October, the stock was billed to be getting close to $1000. http://appleinsider.com/articles/12/10/16/analysis-apple-sto... http://www.forbes.com/sites/gurufocus/2012/10/05/apple-stock...

And in a rational world it would be. It's P/E ratio is crazy low compared to Google and Amazon just in raw terms. But the market is an irrational place, it only looks sane in aggregate and over longer time periods. The rational part of me says it will be over 1k within a year, regardless of how irrational I know that thought to be :-)

P/E is just one signal of many that affects the stock price. You cannot look at it in isolation.

For example, the smartphone and tablet market is subject to changing trends and quick turmoil. One botched launch cycle from Apple and/or one great launch from one or more of Samsung, Google, Nokia is enough to change things in just one year. That implies risk, and the market does not like risk.

Contrast that with well entrenched near monopolies with well erected moats like Google in the web search market, Amazon in the online retail market and Microsoft in desktop software with Windows/Office.

Re: Apple Stock Just Crashed To A New Low

#14

Post by OGinparadise »

The bloggers, financial news sites and even the mainstream media need a story to go on, so last year it was Apple. Also analysts need to make a name for themselves so AAPl at $1001 is a sure thing to make it in the news and maybe stay there.

But the media tires so they start the cycle of destroying what they built up and build up a new thing (now it's Google.) When Apple was valued at $600 Billion it was clear that the law of big numbers was going to kick in really soon

Re: Apple Stock Just Crashed To A New Low

#15

Post by wes-exp »

mdkess wrote: post #2

When newspapers are running headlines about how some stock is going to double in value, it's time to get as far away as possible. Besides, if you're in technology, you shouldn't be investing in tech companies. Since most of us are technologists, if we're ever out of a job for the long term, it'll probably because of a downturn in the technology industry. If our savings are in tech companies, our savings will be down…

if you're in technology, you shouldn't be investing in tech companies

Warren Buffett avoided investing in technology companies during the dot-com tech bubble because he didn't understand them. So according to the most legendary investor of all time, understanding what you invest in is crucial.

To exclude investing in tech companies because your income comes from tech companies might be a good strategy to diversify and mitigate against short-term market fluctuations. But it's an incredibly stupid strategy if you're shooting for growth and willing to accept some level of risk. Because your tech expertise gives you the best chance of actually investing intelligently in tech.

Re: Apple Stock Just Crashed To A New Low

#16

Post by darkspaten »

mdkess wrote: post #2

When newspapers are running headlines about how some stock is going to double in value, it's time to get as far away as possible. Besides, if you're in technology, you shouldn't be investing in tech companies. Since most of us are technologists, if we're ever out of a job for the long term, it'll probably because of a downturn in the technology industry. If our savings are in tech companies, our savings will be down…

> Besides, if you're in technology, you shouldn't be investing in tech companies.

I find that to be an odd maxim. Certainly one should limit exposure to acceptable risk tolerance… say 10-15% of portfolio; however, being in the industry we have significant insight into trends, viability, capital allocation, reputation, market forces, etc. Why wouldn't we leverage that knowledge for investment? When most CIOs were mocking AAPL, the stock was in the low $100s, it was a great time to invest for anyone who spotted the early trend.

Re: Apple Stock Just Crashed To A New Low

#18

Post by dasil003 »

wes-exp wrote: post #15
mdkess wrote: post #2

When newspapers are running headlines about how some stock is going to double in value, it's time to get as far away as possible. Besides, if you're in technology, you shouldn't be investing in tech companies. Since most of us are technologists, if we're ever out of a job for the long term, it'll probably because of a downturn in the technology industry. If our savings are in tech companies, our savings will be down…

if you're in technology, you shouldn't be investing in tech companies Warren Buffett avoided investing in technology companies during the dot-com tech bubble because he didn't understand them. So according to the most legendary investor of all time, understanding what you invest in is crucial. To exclude investing in tech companies because your income comes from tech companies might be a good strategy to diversify an…

Leaving aside the eggs-in-a-single-basket aspect, I think being too close could be a liability. You may read a lot of bearish press about Apple that emphasizes market share over profit share completely missing the point of Apple's culture and the fact that foregoing the standard protectionism is what allows them to pursue the next great product so much better than anyone else. You might be totally right in this thinking and yet still be screwed by the market because it's full of speculators subscribing the conventional wisdom. And it's tech, so totally plausible for them to hold the stock down until consumer tastes move on and it becomes a self-fulfilling prophecy.

I see so much dubious analysis of Apple (eg. suggesting Apple could go the Dell route) that I'm getting tempted to go long, but it's a tremendous risk because it's so damn frothy.

Re: Apple Stock Just Crashed To A New Low

#19

Post by asmithmd1 »

cincinnatus wrote: post #10
recoiledsnake wrote: post #3

As recently as mid-October, the stock was billed to be getting close to $1000. http://appleinsider.com/articles/12/10/16/analysis-apple-sto... http://www.forbes.com/sites/gurufocus/2012/10/05/apple-stock...

And in a rational world it would be. It's P/E ratio is crazy low compared to Google and Amazon just in raw terms. But the market is an irrational place, it only looks sane in aggregate and over longer time periods. The rational part of me says it will be over 1k within a year, regardless of how irrational I know that thought to be :-)

If Apple wanted to boost stock price they would have a 20:1 stock split. Price per share would then be in the $20's and would quickly shoot up because of how "cheap" the stock is.
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