Apple reports Q3 results • Hacker News Board

Re: Apple reports Q3 results

#61

Post by vosper » Thu, Jul 30, 2020, 9:32 PM UTC

matthewdgreen wrote: post #3

Given the high rates of unemployment in the US and around the world (with possibly worse to come) this kind of consumer spending on luxury goods is pretty remarkable. Wonder how sustainable it is.

Are these things actually luxury goods?

A smartphone is probably one of the most essential and important devices in many peoples lives these days. Certainly one of the most used. There is the option of Android instead of Apple, but as someone pointed out one time, iPhones are cheaper than flagship Android devices if you account for the support lifetime of an iPhone being a lot longer than any Android device. And that's not counting the cheaper iPhone Apple launched recently.

Likewise, for many people, a computer would probably be considered an essential device. Sure there are cheaper Windows laptops, but the cost of switching ecosystems is potentially quite high, and if you're already in the i-device camp you're probably going to stick with a Mac due to its integration with all the other things you have (and had before the pandemic)

I would count iPads as largely luxury devices.

Re: Apple reports Q3 results

#62

Post by runawaybottle » Thu, Jul 30, 2020, 9:32 PM UTC

troygoode wrote: post #48

jandrewrogers wrote: post #16

Earlier quoted context omitted.

Interestingly, spending on luxury/positional goods does not decline when the economy is poor. This is a well-known effect. That is not where people tend to cut back. If you looked solely at Apple's revenue during 2008/2009 you wouldn't even know there was a crash, never mind one that was severe by any measure.

I don't disagree with your point (it is pretty interesting!) but I do think 2008 – one year after the iPhone was introduced – is a bit of a special scenario for Apple that isn't broadly applicable to other stocks/downturns.

It could still be framed within the realm of the underclass. They don’t have enough money to invest, buy a home, pay off debt, but they can certainly buy the best thing within their buying power - a phone, a tv, heavily financed cars, and so on.

I don’t think these buying patterns are incongruous to reality on the ground. In other news, certainly alcohol and drug sales are up too.

Re: Apple reports Q3 results

#63

Post by crazygringo » Thu, Jul 30, 2020, 9:33 PM UTC

adtac wrote: post #32

>The Board of Directors has also approved a four-for-one stock split to make the stock more accessible to a broader base of investors. Each Apple shareholder of record at the close of business on August 24, 2020 will receive three additional shares for every share held on the record date, and trading will begin on a split-adjusted basis on August 31, 2020.

I'm curious. Do trading platforms automatically adjust existing limit orders the night of August 24, e.g. dividing all prices by 4? (Or just cancel all limit orders?)

I mean I would assume they do, but just wonder if there are ever any severe "gotchas" with a stock split with certain existing buy/sell arrangements, or derivatives etc.

Re: Apple reports Q3 results

#64

Post by jennyyang » Thu, Jul 30, 2020, 9:33 PM UTC

xondono wrote: post #20

Kkoala wrote: post #18

It's Q2 right? Or do they not use the calendar year for accounting?

They don’t use the calendar numbering, but I don’t really know why

It's because Apple has to account for returns, and their biggest quarter is the December quarter. Most retail companies do not end on Dec 31 for this reason.

Re: Apple reports Q3 results

#65

Post by totalZero » Thu, Jul 30, 2020, 9:34 PM UTC

tqi wrote: post #59

Apple, Alphabet, Amazon, and Facebook, which combined are worth almost $5 trillion dollars[1] all releasing earnings on the same day seems crazy. From what I could find, that is 14% (5T/35T) of the total stock market posting earnings on the same day [2]. I'm curious if anyone has thoughts on what effect that has on the overall market in terms of volatility? (I really have no good idea as to how any of this works) Cou…

There's a concept in the options trading world called "correlation skew," which describes how tail risk for baskets like SPY/QQQ/XLK can trade richer than tail risk for the basket components, based on how much correlation there is expected to be in the components. When correlation is expensive, you can buy option contracts on the basket components and sell contracts on the basket itself, to set up a position that profits when the basket components exhibit dispersion rather than correlation.

Sure, we could see sector rotation into tech tomorrow. This may be somewhat muted because tech is already a very crowded trade, and tech names are already trading far higher than where they closed.

Re: Apple reports Q3 results

#66

Post by crazygringo » Thu, Jul 30, 2020, 9:38 PM UTC

matthewdgreen wrote: post #3

Given the high rates of unemployment in the US and around the world (with possibly worse to come) this kind of consumer spending on luxury goods is pretty remarkable. Wonder how sustainable it is.

There's a good argument to be made that Apple devices are not luxury goods but save you money in the long run.

They often last for many more years than competitors' products, receive upgrades for longer, become obsolete less quickly, and Apple will repair them both under warranty and out of warranty. (Many competitors simply do not service their products.) And when you're finally done with your device, you can often still resell it on eBay and get even further value from it, again often for much more than with competitors' products of the same age.

Apple products on the lower end tend to be fantastic investments actually. And given how much we're working from home now, your primary devices for remote communication are hardly "luxury" and more "essential".

Re: Apple reports Q3 results

#67

Post by anthony_r » Thu, Jul 30, 2020, 9:38 PM UTC

3pt14159 wrote: post #55

anthony_r wrote: post #39

Earlier quoted context omitted.

There is no such thing as "split price". You get 4 shares for each share you previously owned, and it's up to the market to resume trading at a new level. It's a non-event, really, except it makes some operations easier.

Yeah, it was getting a bit pricy to buy lots of 100 apple shares at a time and sell covered calls. This is much better. Honestly I think selling covered call on Apple is one of the few good plays left out there. Long term the company's value is going to keep going up, but with so much volatility in the market lately option premiums are bananas and though I expect a pretty dramatic stock market pullback Apple is one o…

Ah yes, selling volatility via covered calls. The institutional investors' second favourite way of collecting "extra income" in the zero rates world, second only to explicit leverage.

Some of them sold much more volatility, via variance swaps, with quite disastrous results.

https://www.institutionalinvestor.com/article/b1lffwvwdh7xtq...

Re: Apple reports Q3 results

#68

Post by bananaface » Thu, Jul 30, 2020, 9:38 PM UTC

matthewdgreen wrote: post #3

Given the high rates of unemployment in the US and around the world (with possibly worse to come) this kind of consumer spending on luxury goods is pretty remarkable. Wonder how sustainable it is.

Everyone is cooped up at home. Not too surprising that they'd buy laptops & ipads.

Re: Apple reports Q3 results

#69

Post by cobookman » Thu, Jul 30, 2020, 9:39 PM UTC

matthewdgreen wrote: post #3

Given the high rates of unemployment in the US and around the world (with possibly worse to come) this kind of consumer spending on luxury goods is pretty remarkable. Wonder how sustainable it is.

My iphone se2 was 400$. I got it at 50% off, so $200.

That's not luxury by any means, and is price competitive even with the cheapest of android phones.

Apple's lower price-point offerings might have old hardware, but its more than made up for it by just working & offering long-term support. Something no android phone can match.

Re: Apple reports Q3 results

#70

Post by marvin » Thu, Jul 30, 2020, 9:39 PM UTC

crazygringo wrote: post #63

adtac wrote: post #32

>The Board of Directors has also approved a four-for-one stock split to make the stock more accessible to a broader base of investors. Each Apple shareholder of record at the close of business on August 24, 2020 will receive three additional shares for every share held on the record date, and trading will begin on a split-adjusted basis on August 31, 2020.

I'm curious. Do trading platforms automatically adjust existing limit orders the night of August 24, e.g. dividing all prices by 4? (Or just cancel all limit orders?) I mean I would assume they do, but just wonder if there are ever any severe "gotchas" with a stock split with certain existing buy/sell arrangements, or derivatives etc.

I haven't worked on trading systems in the US, but handling this type of gotcha is the bread and butter of the sort of trading software I have been working on.

There's a million tiny details like this that can cause consequences that are both different from what a customer intended and what our terms with said customer states, so making sure it's all handled in a safe way is just part of daily business.