3 ms·

I'm sorry, but the whole "it's all a conspiracy to keep Apple down" line is ridiculous: The market is highly adversarial, and if anyone were "keeping it down" a

I'm sorry, but the whole "it's all a conspiracy to keep Apple down" line is ridiculous: The market is highly adversarial, and if anyone were "keeping it down" artificially, they would have their lunch eaten by those looking for value. As one of the most held equities, AAPL isn't an easy asset to game. Apple has enormous, historic profit levels, and are sitting at an incredible altitude. If you really can't see the risk factors there -- why people might be skeptical -- especially given some broad shifts in the market (where competitors have largely kept up and are forcing Apple to iterate much more quickly, and to start to introduce products that compete against themselves, both of which threaten Apple's unprecedented profit margins), you aren't looking at the market rationally. Assuming that anything is a sure thing is just ridiculous.

Firehed 14y ago
The arguments I've heard may be difficult to pull off, but they do make sense. One cited a lot of deep in the money call options expire soon, and the folks that wrote those options have a lot to lose if the stock is high when they expire in a few days. With today's sloppy reporting and Apple being an especially juicy target for rumor-mongering, trying to deflate AAPL in the time just before the payout both makes sense and is probably easier than you imagine. You say that people aren't looking at the market rationally, but look at the volatility in AAPL just this week. It's decidedly not normal for a stock with a price that high to see 4% fluctuations day-to-day unless there's real news. Everything out there has been asinine rumors. As for having their lunch eaten by those looking for value... I bought call options yesterday on the wacky price dip; they were up over 200% today. Granted I only bought one option on the bet that a lot of this activity has been based on attempts to drive down the stock price on rumor alone so it's not like I made a whole lot (about $180 in profit), but people with much more money to throw around than myself taking a similar bet made stupid amounts of money in the last 36 hours or so. I'll also point out here is that Apple has all of the profits in the industry, even if it doesn't have the marketshare. It's been true of the Mac for years, and is increasingly true of the cell phone market as Samsung eats into marketshare. Guess what? I care about profit, not marketshare, which is why I'm long AAPL.
- corresation 14y ago
  You say that people aren't looking at the market rationally, but look at the volatility in AAPL just this week. It's decidedly not normal for a stock with a price that high to see 4% fluctuations day-to-day unless there's real news The market is adversarial, which is why it is seeing the fluctuations that it does (doubly so because it is an equity that most have been incredibly bullish about until quite recently, so it's at a potential transition point). The market is entirely rational, though the positions and perspectives that define each persons idea of rational vary. I'll also point out here is that Apple has all of the profits in the industry, even if it doesn't have the marketshare. This is an odd note to add on the end. Aside from Samsung making egregious profits as well (on a "commodity, race-to-the-bottom" platform), the fact that Apple makes so much profit in the consumer electronics market -- a market where profit margins average low single digits -- is exactly what makes so many nervous about Apple's long term outlook. The iPad Mini, for instance, is all about trying to save an iPad sale that they might have lost, at the cost of significant profit. For the first time ever I am seeing sales on Apple devices, including the latest and greatest. All is not at all what it was a year ago.
- cageface 14y ago
  I'll also point out here is that Apple has all of the profits in the industry, even if it doesn't have the marketshare. It's been true of the Mac for years, and is increasingly true of the cell phone market as Samsung eats into marketshare. Guess what? I care about profit, not marketshare, which is why I'm long AAPL. That is no longer true. Samsung had a great 2012 and seems poised to have an even better with the S4 and the Note 2. Apple is still making a shitload of money but none of the market trends are in their favor right now. What's more, the rise of the "phablet" and the explosion of mobile form factors means iOS development is about to get a lot harder. Developers used to pixel-perfect layouts are going to have to shift to a completely different mindset and the tools Apple provides for handling dynamic layouts are far more difficult to use than those of the competition.
  - rimantas 14y ago
    > That is no longer true. So show your numbers. > What's more, the rise of the "phablet" and the explosion of mobile > form factors means iOS development is about to get a lot harder. How exactly? Do you know something we don't? So far we have three resolutions to care about, iPhone, iPhone 5 and iPad. Next step for iPad will be retina iPad mini which changes nothing. How Samsung of Google releasing some weird form factor will make my life as an iOS developer harder? And btw, there is autolayout if you missed it.
snowwrestler 14y ago
> The market is highly adversarial, and if anyone were "keeping it down" artificially, they would have their lunch eaten by those looking for value. Yes, which is why it's hovering around $500 instead of $0. But the real question is why competing companies have P/E ratios despite demonstrably worse prospects--Microsoft, for example, has a P/E of almost 15 despite far worse prospects in mobile, lower profits, and a smaller cash reserve. Explain that. Even a back-of-the-envelope look at AAPL's business shows there is something weird going on with the stock.
- corresation 14y ago
  But the real question is why competing companies have P/E ratios despite demonstrably worse prospects Apple and Microsoft's P/E ratio aren't that far off each other. The latter, however, pays a dividend (the two ways to make money off an equity are appreciation and dividends). Further, and saying this with the understanding the P/E is more general guidance than science, Microsoft's products are structural, and despite an endless stream of disasters Microsoft can still pull in the relatively mammoth profits. Apple, on the other hand, exists almost entirely on the backs of the iPhone and the iPad, neither of which have much structural fixedness at all. If the iPhone 6 is a dud for any reason, or the supply lines of either of those face any issues...boom, Apple's profits evaporate. There is dramatically more risk factored into Apple's profits.
  - parasubvert 14y ago
    Um, Apple also pays a dividend - 10x more than Microsoft actually, at $2.65 quarterly vs $0.23. Further more, Apple's P/E of 11.4 vs microsoft's near-15 is a pretty big difference. Not Amazon big, at 3872x! But among the tech sector, it barely covers Apple's incoming 5 year cash flow in a zero-growth scenario. Supply lines for Apple are the same supply lines for other manufacturers, so that's not it. As for "the next phone being a flop and boom, dead", that concept seems rather far fetched, no? A slow meltdown in favour of Android or others is much more likely than any one model somehow being magically disastrous. How often has this ever happened in consumer electronics?

Firehed 14y ago

The arguments I've heard may be difficult to pull off, but they do make sense. One cited a lot of deep in the money call options expire soon, and the folks that wrote those options have a lot to lose if the stock is high when they expire in a few days. With today's sloppy reporting and Apple being an especially juicy target for rumor-mongering, trying to deflate AAPL in the time just before the payout both makes sense and is probably easier than you imagine. You say that people aren't looking at the market rationally, but look at the volatility in AAPL just this week. It's decidedly not normal for a stock with a price that high to see 4% fluctuations day-to-day unless there's real news. Everything out there has been asinine rumors. As for having their lunch eaten by those looking for value... I bought call options yesterday on the wacky price dip; they were up over 200% today. Granted I only bought one option on the bet that a lot of this activity has been based on attempts to drive down the stock price on rumor alone so it's not like I made a whole lot (about $180 in profit), but people with much more money to throw around than myself taking a similar bet made stupid amounts of money in the last 36 hours or so. I'll also point out here is that Apple has all of the profits in the industry, even if it doesn't have the marketshare. It's been true of the Mac for years, and is increasingly true of the cell phone market as Samsung eats into marketshare. Guess what? I care about profit, not marketshare, which is why I'm long AAPL.

corresation 14y ago
You say that people aren't looking at the market rationally, but look at the volatility in AAPL just this week. It's decidedly not normal for a stock with a price that high to see 4% fluctuations day-to-day unless there's real news The market is adversarial, which is why it is seeing the fluctuations that it does (doubly so because it is an equity that most have been incredibly bullish about until quite recently, so it's at a potential transition point). The market is entirely rational, though the positions and perspectives that define each persons idea of rational vary. I'll also point out here is that Apple has all of the profits in the industry, even if it doesn't have the marketshare. This is an odd note to add on the end. Aside from Samsung making egregious profits as well (on a "commodity, race-to-the-bottom" platform), the fact that Apple makes so much profit in the consumer electronics market -- a market where profit margins average low single digits -- is exactly what makes so many nervous about Apple's long term outlook. The iPad Mini, for instance, is all about trying to save an iPad sale that they might have lost, at the cost of significant profit. For the first time ever I am seeing sales on Apple devices, including the latest and greatest. All is not at all what it was a year ago.
cageface 14y ago
I'll also point out here is that Apple has all of the profits in the industry, even if it doesn't have the marketshare. It's been true of the Mac for years, and is increasingly true of the cell phone market as Samsung eats into marketshare. Guess what? I care about profit, not marketshare, which is why I'm long AAPL. That is no longer true. Samsung had a great 2012 and seems poised to have an even better with the S4 and the Note 2. Apple is still making a shitload of money but none of the market trends are in their favor right now. What's more, the rise of the "phablet" and the explosion of mobile form factors means iOS development is about to get a lot harder. Developers used to pixel-perfect layouts are going to have to shift to a completely different mindset and the tools Apple provides for handling dynamic layouts are far more difficult to use than those of the competition.
- rimantas 14y ago
  > That is no longer true. So show your numbers. > What's more, the rise of the "phablet" and the explosion of mobile > form factors means iOS development is about to get a lot harder. How exactly? Do you know something we don't? So far we have three resolutions to care about, iPhone, iPhone 5 and iPad. Next step for iPad will be retina iPad mini which changes nothing. How Samsung of Google releasing some weird form factor will make my life as an iOS developer harder? And btw, there is autolayout if you missed it.

snowwrestler 14y ago

> The market is highly adversarial, and if anyone were "keeping it down" artificially, they would have their lunch eaten by those looking for value. Yes, which is why it's hovering around $500 instead of $0. But the real question is why competing companies have P/E ratios despite demonstrably worse prospects--Microsoft, for example, has a P/E of almost 15 despite far worse prospects in mobile, lower profits, and a smaller cash reserve. Explain that. Even a back-of-the-envelope look at AAPL's business shows there is something weird going on with the stock.

corresation 14y ago
But the real question is why competing companies have P/E ratios despite demonstrably worse prospects Apple and Microsoft's P/E ratio aren't that far off each other. The latter, however, pays a dividend (the two ways to make money off an equity are appreciation and dividends). Further, and saying this with the understanding the P/E is more general guidance than science, Microsoft's products are structural, and despite an endless stream of disasters Microsoft can still pull in the relatively mammoth profits. Apple, on the other hand, exists almost entirely on the backs of the iPhone and the iPad, neither of which have much structural fixedness at all. If the iPhone 6 is a dud for any reason, or the supply lines of either of those face any issues...boom, Apple's profits evaporate. There is dramatically more risk factored into Apple's profits.
- parasubvert 14y ago
  Um, Apple also pays a dividend - 10x more than Microsoft actually, at $2.65 quarterly vs $0.23. Further more, Apple's P/E of 11.4 vs microsoft's near-15 is a pretty big difference. Not Amazon big, at 3872x! But among the tech sector, it barely covers Apple's incoming 5 year cash flow in a zero-growth scenario. Supply lines for Apple are the same supply lines for other manufacturers, so that's not it. As for "the next phone being a flop and boom, dead", that concept seems rather far fetched, no? A slow meltdown in favour of Android or others is much more likely than any one model somehow being magically disastrous. How often has this ever happened in consumer electronics?