3 ms·

Who cares what Apple's stock price is?

8 points by mathattack 12y ago

Fomite 12y ago
"If you can afford to invest $80 in Apple stock, but you cannot afford to invest $565 in Apple stock, you should not be investing $80 in Apple stock. I can point you to some very nice index funds, or just, like, I mean, open a checking account." Back when I was a kid, learning about financial literacy, the stock market, etc. my parents encouraged me to buy shares in a company I liked, whose products I used, etc. It wasn't a shrewd investment strategy, or a balanced portfolio (those would come later), but an introduction to the market, brokerages, etc. I put in as much as I could, being, you know, 12 or so. It was less than $565. Post-split, my cost basis on those shares will be a hair under a dollar. I've very glad, at the time, that a share of Apple stock was accessible to people like me.
- JamilD 12y ago
  I think that statement was more targeted at people who would be at financial risk if that money were lost. Presumably even if you, as a kid, lost that money in the market, you'd still have the support of your parents. However, for a low-income family with barely any money, it would be unwise to put your only savings in a single company instead of something more diversified like an index or mutual fund.
  - Fomite 12y ago
    I agree, as a general statement, and as a principle of investing. I just find the "accessibility doesn't matter" argument...irksome.
smackfu 12y ago
I still am not clear on why this is a problem Apple should spend money to solve. (Since a stock split is certainly not free of administrative costs.)
- aet 12y ago
  The stock split has the potential to reduce trading costs (stuff to do with tick size, and odd lots) etc... http://www.kelley.iu.edu/cholden/Stock%20Splits%202006-05-03.pdf http://www.kelley.iu.edu/cholden/Stock%20Splits%202006-05-03...
  - mathattack 12y ago
    Exactly. There used to be larger trading cost discrepancies when you weren't trading in lots of 100. (The per trade cost from brokerages were higher) Now the issue is that you can get steered to paying full bid-offer when you shouldn't need to. The writer is very good at cutting through the clutter on issues like this.
  - smackfu 12y ago
    Right, but what is the benefit to Apple of reducing those costs? Maybe they save money when they are doing stock buybacks?
    - aet 12y ago
      The stock become more attractive to hold
robotresearcher 12y ago
"If you can afford to invest $80 in Apple stock, but you cannot afford to invest $565 in Apple stock, you should not be investing $80 in Apple stock. I can point you to some very nice index funds, or just, like, I mean, open a checking account." Index funds and checking accounts have not given nearly as much return as Apple over the last several years. Why shouldn't people who can afford to risk $100 but not $500 have access to these returns?
- mathattack 12y ago
  I think his point is that if one share costs too much, you generally shouldn't be so all-in to one stock. By and large, the people with $100 to spend aren't beating the index on average. Transaction costs eat up too much of it. Yes there are outliers, but companies don't split to enable low income buyers the opportunity to buy single shares.

8 points by mathattack 12y ago

"If you can afford to invest $80 in Apple stock, but you cannot afford to invest $565 in Apple stock, you should not be investing $80 in Apple stock. I can point you to some very nice index funds, or just, like, I mean, open a checking account." Back when I was a kid, learning about financial literacy, the stock market, etc. my parents encouraged me to buy shares in a company I liked, whose products I used, etc. It wasn't a shrewd investment strategy, or a balanced portfolio (those would come later), but an introduction to the market, brokerages, etc. I put in as much as I could, being, you know, 12 or so. It was less than $565. Post-split, my cost basis on those shares will be a hair under a dollar. I've very glad, at the time, that a share of Apple stock was accessible to people like me.

JamilD 12y ago
I think that statement was more targeted at people who would be at financial risk if that money were lost. Presumably even if you, as a kid, lost that money in the market, you'd still have the support of your parents. However, for a low-income family with barely any money, it would be unwise to put your only savings in a single company instead of something more diversified like an index or mutual fund.
- Fomite 12y ago
  I agree, as a general statement, and as a principle of investing. I just find the "accessibility doesn't matter" argument...irksome.

smackfu 12y ago

I still am not clear on why this is a problem Apple should spend money to solve. (Since a stock split is certainly not free of administrative costs.)

aet 12y ago
The stock split has the potential to reduce trading costs (stuff to do with tick size, and odd lots) etc... http://www.kelley.iu.edu/cholden/Stock%20Splits%202006-05-03.pdf http://www.kelley.iu.edu/cholden/Stock%20Splits%202006-05-03...
- mathattack 12y ago
  Exactly. There used to be larger trading cost discrepancies when you weren't trading in lots of 100. (The per trade cost from brokerages were higher) Now the issue is that you can get steered to paying full bid-offer when you shouldn't need to. The writer is very good at cutting through the clutter on issues like this.
- smackfu 12y ago
  Right, but what is the benefit to Apple of reducing those costs? Maybe they save money when they are doing stock buybacks?
  - aet 12y ago
    The stock become more attractive to hold

robotresearcher 12y ago

"If you can afford to invest $80 in Apple stock, but you cannot afford to invest $565 in Apple stock, you should not be investing $80 in Apple stock. I can point you to some very nice index funds, or just, like, I mean, open a checking account." Index funds and checking accounts have not given nearly as much return as Apple over the last several years. Why shouldn't people who can afford to risk $100 but not $500 have access to these returns?

mathattack 12y ago
I think his point is that if one share costs too much, you generally shouldn't be so all-in to one stock. By and large, the people with $100 to spend aren't beating the index on average. Transaction costs eat up too much of it. Yes there are outliers, but companies don't split to enable low income buyers the opportunity to buy single shares.