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I don't know about losing its touch, but wanted to offer some corrections re: "I believe it will be a slow but steady decline in value, down to a more Google-li

by kalid 14y ago

I don't know about losing its touch, but wanted to offer some corrections re: "I believe it will be a slow but steady decline in value, down to a more Google-like share price." 1) Comparing share prices between companies doesn't make sense (the share price is total value / total number of shares, the latter can change). That said, GOOG's current share price (~670) is higher than AAPL's current price, and near its all time high (~700). 2) If you meant to compare total values, that Apple should be worth as much as Google... Apple is over twice Google's total value (550B to 220B) so that'd be an enormous decline in value. 3) If you meant to compare relative value (price/performance), Apple is actually a better "deal" for investors in that its P/E is around 14, the market average, while Google's is 21. 14 dollars in Apple will create $1 in earnings, but 21 dollars in Google is required to do the same.

Jabbles 14y ago
"an enormous decline" On the same scale as the growth that Apple has seen over the last 2 years.
- kalid 14y ago
  Apple's valuation growth is due to selling enormous quantities of products -- their P/E has roughly hovered around ~15 the entire time. If it were 20 or 30 then there'd be a lot of room to fall. But their P/E is about industry average... they just have a megaton of sales. If iPhone/iPad sales decline precipitously (to ~2010 levels) then their share price should fall to roughly that amount [probably more, since it indicates something is terribly wrong and likely to decline further].
justin0469 14y ago
Fair enough :) Bad example with the Google share price and point taken with value / # of shares. You are correct with #3. I know Apple is worth is significantly higher than Google, I just think that gap will close (Google will raise, Apple will lower) over a long period of time - as in years. Could be totally wrong, it's just something I could see happening.
- kalid 14y ago
  No worries :). I've been playing with stocks lately so am aware of a lot of potential misconceptions [esp. around the raw share price, vs. market cap and P/E being indicators of value]. Apple very well could depreciate in value if their earnings slip. That would put its P/E in the bottom half of the S&P 500 (historically Apple's P/E has been around 15, it's around ~14 now).

by kalid 14y ago

Jabbles 14y ago

"an enormous decline" On the same scale as the growth that Apple has seen over the last 2 years.

kalid 14y ago
Apple's valuation growth is due to selling enormous quantities of products -- their P/E has roughly hovered around ~15 the entire time. If it were 20 or 30 then there'd be a lot of room to fall. But their P/E is about industry average... they just have a megaton of sales. If iPhone/iPad sales decline precipitously (to ~2010 levels) then their share price should fall to roughly that amount [probably more, since it indicates something is terribly wrong and likely to decline further].

justin0469 14y ago

Fair enough :) Bad example with the Google share price and point taken with value / # of shares. You are correct with #3. I know Apple is worth is significantly higher than Google, I just think that gap will close (Google will raise, Apple will lower) over a long period of time - as in years. Could be totally wrong, it's just something I could see happening.

kalid 14y ago
No worries :). I've been playing with stocks lately so am aware of a lot of potential misconceptions [esp. around the raw share price, vs. market cap and P/E being indicators of value]. Apple very well could depreciate in value if their earnings slip. That would put its P/E in the bottom half of the S&P 500 (historically Apple's P/E has been around 15, it's around ~14 now).