Apple’s stock price falls to lowest point in six months • Hacker News Board

Re: Apple’s stock price falls to lowest point in six months

#31

Post by schraeds » Sat, Nov 17, 2012, 4:38 PM UTC

eta_carinae wrote: post #25

Jabbles wrote: post #6

Eugh. I don't get why anyone wants to read this mindless speculation. What else do your tea leaves tell you? "many investors were disappointed that Apple wasn’t able to blow through Wall Street’s estimates" Well, great. Maybe their goat's entrails didn't predict well enough last time, but this time they were wrong the other way. Almost as if it were random - or as if the market had already compensated for their predi…

> Apple sells physical devices for a massive profit. No one else has been able to sell phones/tablets for so much. Apple will keep doing that as long as it can, regardless of Google's efforts to undercut. The article is about Apple's stock price, and I'm not sure you understand how that part works. Yes, Apple will continue to make billions of dollars every quarter for quite a while, but their stock is likely to drop…

I'm not sure you understand either. P/E ratio, cash on hand. No reason AAPL shouldn't bounce back from this.

Re: Apple’s stock price falls to lowest point in six months

#32

Post by arrrg » Sat, Nov 17, 2012, 4:40 PM UTC

zdw wrote: post #24

arrrg wrote: post #9

Earlier quoted context omitted.

I do not see them failing like RIM. They might well fail like Sony (i.e remain largish but slowly fade into irrelevance). I can totally see that happening.

Or, like Microsoft? (flat stock for the last ~10 years)

I’m not sure whether that’s a good comparison, but that could be down to personal taste. Microsoft made tons of money by selling an extremely boring product. That’s never something Apple did. Plus Apple sells hardware, Microsoft software. They are fundamentally different companies.

I can see Apple having a stock like Microsoft (i.e. flat for a decade), I can’t really see them being like Microsoft.

Re: Apple’s stock price falls to lowest point in six months

#33

Post by calinet6 » Sat, Nov 17, 2012, 4:41 PM UTC

btilly wrote: post #29

This looks like a follow-up take on the similar TechCrunch article discussed at http://news.ycombinator.com/item?id=4791710 . Let me repeat my comment there. I would personally not buy their stock any time soon. I keep meaning to write a blog entry on this. To understand my reasoning it helps to be familiar with The Innovator's Dilemma (see http://www.amazon.com/The-Innovators-Dilemma-Technologies-Ca... for the book)…

Short-sighted drivel.

"In every market that Apple is in, it is the premium product." Why do you think that is, exactly? Apple has quality products because it is a culture designed to produce Quality. As long as that does not stop, they will continue to absolutely pave the streets with their competitors' remains, because, frankly, no other company in the market has the company-wide culture necessary to produce the end-to-end quality that Apple does. It's far too soon to tell if they can still innovate into new and unexpected markets, but they've only released a handful of products since Jobs' death. But the truth remains: whatever market they enter, they will dominate.

What do they need someone to come up with ideas? Shoot, I'll do it. How desperate do you think they are? If I show up at 1 Infinite Loop claiming to be channeling Steve Jobs, do you think they'd hire me?

Hogwash.

I wouldn't buy anytime soon either, but only because the stock price will continue to fall as short-sighted investors keep believing things like this.

Re: Apple’s stock price falls to lowest point in six months

#34

Post by adventured » Sat, Nov 17, 2012, 4:41 PM UTC

jusben1369 wrote: post #26

The risk is that Apple becomes Microsoft. Microsoft has traded in the same $20 - $30 range for more than 5 years. Microsoft is still a cash cow. But there are not enough new hits to propel the stock. Apple's not leaving any time soon but until we see a new hit its staying flat to falling backward. While I don't buy into the "Maps would have never happened with Steve!!" the one thing that was undeniable was the man ov…

It's worse than a risk, it's almost a guarantee.

MSFT was $26.x 14 years ago (even though this is all ignoring the ups & downs between, it's still dramatic).

Megacap stocks are horrible investments on average if you're seeking good returns, specifically because the law of big numbers cripples the ability for any truly massive company to keep a high growth rate. Not to mention that large companies typically begin paying their large profits out in dividends (rather than using it toward growth), and Apple will do the same. Microsoft has paid out the equivalent of half its current market cap in dividends over the past ten years.

It'll be little surprise if Apple is $550 ten years from now, and that's a good scenario given the history of big companies tumbling from the top of the mountain.

Unlike Microsoft, Apple has no 'monopoly' in anything, and they have a vicious annual upgrade cycle. If Apple screws up one version of the iPhone, their stock would crash spectacularly, probably losing at least 1/2 of its value. Microsoft botched a few versions of Windows, and took their time on releases, but their desktop monopoly shielded them from the fallout.

Whether we're talking McDonalds, Boeing, Coca Cola, Walmart, Berkshire Hathaway, Exxon, Intel, Microsoft, Cisco, HP, Dell, Chevron, etc. - eventually the growth boom ends, and stock returns race toward sub 10% annually. Walmart hasn't moved much in 12 years; McDonalds is now 'growing' at zero and their stock will follow; Coke hasn't moved in 15 years; HP and Dell are disasters, ditto Cisco's stock; Berkshire has returned about 3.x% annually over the last 14 years (with no dividend), radically below Buffett's historical record; Boeing has returned around 2.x% annually over the last 16 years. It's a very long list.

It's real simple in premise: you want Apple at $7, or $35, or $90, but not at $500 or $700 when the future returns are likely to be mediocre. Specifically, you want the next Apple, not the last one.

Re: Apple’s stock price falls to lowest point in six months

#35

Post by patrickgzill » Sat, Nov 17, 2012, 4:42 PM UTC

The AAPL-watchers at ZeroHedge.com take the view that hedge funds are heavily invested in AAPL and that if they leave the stock price will go down due to heavy selling. Further an avalanche of selling could be set in motion if 1 hedge fund sells enough to cause other hedge funds to decide to sell as well.

See e.g. http://www.zerohedge.com/news/2012-11-08/apple-enters-gravti...

Note: VWAP means "volume weighted average price" and ES refers to contracts that track the price of the S&P 500 : http://www.cmegroup.com/trading/equity-index/us-index/e-mini...

Re: Apple’s stock price falls to lowest point in six months

#36

Post by AJ007 » Sat, Nov 17, 2012, 4:44 PM UTC

steve8918 wrote: post #14

(Full disclosure: I bought Apple stock and calls in the last 2 days, for a short term trade. Yes, I was &*!@-ing my pants yesterday when it hit ~$505.) The difference with Apple and other momentum stocks is that Apple isn't like Netflix, where hype deeply overshadowed the problem they have with increasing content costs, or Groupon, which simply has a terrible business model. Apple makes an incredible amount of real m…

I think Apple's biggest risk is that their products become stale, while Android moves a step or two ahead in innovation. The early adapters that I know have moved on to Android products, and so far they are very happy.

Re: Apple’s stock price falls to lowest point in six months

#37

Post by toddmorey » Sat, Nov 17, 2012, 4:44 PM UTC

btilly wrote: post #29

This looks like a follow-up take on the similar TechCrunch article discussed at http://news.ycombinator.com/item?id=4791710 . Let me repeat my comment there. I would personally not buy their stock any time soon. I keep meaning to write a blog entry on this. To understand my reasoning it helps to be familiar with The Innovator's Dilemma (see http://www.amazon.com/The-Innovators-Dilemma-Technologies-Ca... for the book)…

I think Jobs' real genius was actually assembling teams. He was extremely visionary, but he was also amazing at inspiring top-level talent. I think entirely writing off Apple's ability to innovate or find new markets is a bit premature.

This may be unpopular, but I sort of think that the 25% haircut Apple has endured is a market correction bringing the stock back to more honest numbers. Investors got ahead of themselves. I'm not sure they ever deserved to be trading north of 700. Even the best performers can get overvalued in the hype cycle. Apple has fallen to 527 per share with half a trillion dollars in market cap. That's still pretty healthy, especially backed by their financials.

Re: Apple’s stock price falls to lowest point in six months

#38

Post by bitcartel » Sat, Nov 17, 2012, 4:44 PM UTC

eta_carinae wrote: post #25

Jabbles wrote: post #6

Eugh. I don't get why anyone wants to read this mindless speculation. What else do your tea leaves tell you? "many investors were disappointed that Apple wasn’t able to blow through Wall Street’s estimates" Well, great. Maybe their goat's entrails didn't predict well enough last time, but this time they were wrong the other way. Almost as if it were random - or as if the market had already compensated for their predi…

> Apple sells physical devices for a massive profit. No one else has been able to sell phones/tablets for so much. Apple will keep doing that as long as it can, regardless of Google's efforts to undercut. The article is about Apple's stock price, and I'm not sure you understand how that part works. Yes, Apple will continue to make billions of dollars every quarter for quite a while, but their stock is likely to drop…

Hedge funds and Wall Street are probably heading out the door, taking profit and moving onto the next 'story' to trade.

http://www.zerohedge.com/news/2012-11-15/remember

On the other hand, just last month: "Apple is going to hit $1,000 a share by January 2014, and will hit $2,000 by the end of the decade, according to a report."

http://www.macworld.co.uk/apple-business/news/?newsid=340227...

Re: Apple’s stock price falls to lowest point in six months

#39

Post by Jabbles » Sat, Nov 17, 2012, 4:47 PM UTC

eta_carinae wrote: post #25

Jabbles wrote: post #6

Eugh. I don't get why anyone wants to read this mindless speculation. What else do your tea leaves tell you? "many investors were disappointed that Apple wasn’t able to blow through Wall Street’s estimates" Well, great. Maybe their goat's entrails didn't predict well enough last time, but this time they were wrong the other way. Almost as if it were random - or as if the market had already compensated for their predi…

> Apple sells physical devices for a massive profit. No one else has been able to sell phones/tablets for so much. Apple will keep doing that as long as it can, regardless of Google's efforts to undercut. The article is about Apple's stock price, and I'm not sure you understand how that part works. Yes, Apple will continue to make billions of dollars every quarter for quite a while, but their stock is likely to drop…

"their stock is likely to..."

Why? Don't just assert that it will do something. Their P/E is 12, so why won't it grow? Why haven't traders seen this "likely" scenario and sold/shorted Apple stock?

Re: Apple’s stock price falls to lowest point in six months

#40

Post by fumar » Sat, Nov 17, 2012, 4:50 PM UTC

calinet6 wrote: post #33

btilly wrote: post #29

This looks like a follow-up take on the similar TechCrunch article discussed at http://news.ycombinator.com/item?id=4791710 . Let me repeat my comment there. I would personally not buy their stock any time soon. I keep meaning to write a blog entry on this. To understand my reasoning it helps to be familiar with The Innovator's Dilemma (see http://www.amazon.com/The-Innovators-Dilemma-Technologies-Ca... for the book)…

Short-sighted drivel. "In every market that Apple is in, it is the premium product." Why do you think that is, exactly? Apple has quality products because it is a culture designed to produce Quality. As long as that does not stop, they will continue to absolutely pave the streets with their competitors' remains, because, frankly, no other company in the market has the company-wide culture necessary to produce the end…

"Apple has quality products because it is a culture designed to produce Quality"

Steve Jobs was a big part of defining that Quality culture. Culture is not static. Jobs was able to direct his teams towards specific goals. IE. iPhone, iPad, iMacs. etc. With each new product the culture shifted. The last major shift was towards tablets and iOS. I think those shifts allowed Apple to leap their competition. Without Jobs Apple's culture has shifted again. I think we have yet to really see what will happen in the market. I am not dismissing Apple's overall ability to continue their dominance. It will be a different "culture, a different company.