patrick.net

Vicente says

Don't be a buy&hold sucker.

Check this out:

http://www.frog-numerics.com/ifs/ifs_LevelA/SellInMay.html

Interesting stuff!

To short Apple would be a tragically short-sighted decision. Its easily already worth at least $800-$900 today, and will probably glide well beyond $1000 as the success of ipad 3 becomes apparent. Huge margins, dominant market position in the faster growing market (tablets), low P/E, and huge market share gains yet to be had in cell phone market and possibly a newly created market in TV space. Its a fast moving supertanker, anything that gets in the way will be flattened, including you.

parkave says

To short Apple would be a tragically short-sighted decision. Its easily already worth at least $800-$900 today, and will probably glide well beyond $1000 as the success of ipad 3 becomes apparent. Huge margins, dominant market position in the faster growing market (tablets), low P/E, and huge market share gains yet to be had in cell phone market and possibly a newly created market in TV space. Its a fast moving supertanker, anything that gets in the way will be flattened, including you.

I think a 65% upside in the near term is highly unlikely.

Apple is killing it in tablets, but there's little to no reason to believe that they're going to gain market share in smartphones. Their share of smartphones has been flat for two years.

There's also no reason at all to believe that Apple will get any traction in TV. The video content owners have a great thing going, and there's really nothing that Apple could offer them that is a better deal than what they're getting from pay TV and advertising. The music industry embraced apple because piracy scared the shit out of them. The TV industry isn't really concerned with piracy at this point, and probably never will be due to the nature of their business model.

Apple isn't invincible. And consumer tastes DO change. The cult of Apple could be superseded by the "next big thing."

But I sure as heck wouldn't short it. Not now. If it's PE ratio was 50x or something, maybe I'd short it. Right now it's PE ratio is about 17x. That's lower than McDonald's right now for chrissakes.

If you want to short something, don't you think Amazon might be a better choice? Their PE is 134x, which is f*cking crazy.

wthrfrk80 says

But I sure as heck wouldn't short it. Not now. If it's PE ratio was 50x or something, maybe I'd short it. Right now it's PE ratio is about 17x. That's lower than McDonald's right now for chrissakes.

Yep, shorting Apple takes balls of iron at this point.

Question is, what are they going to do with all that cash? Now that Jobs is gone, won't investors start demanding a dividend or buy back?

Apple may someday fall out of favor, but not until the 6 billion people have one of their products.
By that time I'm gonna be sipping a drink with an umbrella in it, served by an asian "nurse".

thunderlips11 says

wthrfrk80 says

But I sure as heck wouldn't short it. Not now. If it's PE ratio was 50x or something, maybe I'd short it. Right now it's PE ratio is about 17x. That's lower than McDonald's right now for chrissakes.

Yep, shorting Apple takes balls of iron at this point.

Question is, what are they going to do with all that cash? Now that Jobs is gone, won't investors start demanding a dividend or buy back?

Homo Economicus. A Legendary Creature, like Bigfoot, claimed to exist by Pseudoscientists.

Investors are still happy as long as the stock price keeps climbing.

My guess is that Cook will start a dividend.

I remain utterly unconvinced that Apple has another blockbuster product up its sleeve. Without jobs, they're going to wind up like Microsoft: Enormous profits continue to roll in from established businesses, which makes them lazy.

I don't think Tim cook is the kind of man who will develop a product that will compete directly with an existing product. That's exactly what Jobs did with both the iphone and the ipad. That's what will ensure that someone disrupts apple in the long term.

Once a company's visionary leadership is gone, and the show is being run by professional managers, however good and well-intentioned they are, the best days are behind them.

Apple will be doing extremely well over the next 5-10 years. After that, all bets are off.

Kevin says

Once a company's visionary leadership is gone, and the show is being run by professional managers, however good and well-intentioned they are, the best days are behind them.

Great point.

Kevin says

Once a company's visionary leadership is gone, and the show is being run by professional managers, however good and well-intentioned they are, the best days are behind them.

That is right. It already happened at Apple before, like with John Scully and Gil Amelio.

You don't short it when it is going up.
I will wait for a 10% drop, then short.

You also have to cover if it breaks out again. You will lose 10% per try.

It is not bad, consider that you will lose everything in a casino or real estate.

I do not think you should short apple unless you think the entire market is going to tank back to 10k DOW... Apple is going to trade like a leveraged etf... And they are announcing what they are doing with their cash horde tomorrow at noon... Expect apple to break $600 easily sometime tomorrow.

Monday 9AM ET there will be a conference call to discuss what Apple is planning to do with the oceans of cash it's sitting on. The punditocracy leads with "they'll pay dividend".

People will sell Apple if it pays dividend, because they will get a tax bill.
Plus it is a sign that Apple cannot grow anymore.

A "10:1 split" will help :)

Official, quarterly dividend for APPL
http://www.wired.com/epicenter/2012/03/apple-goes-blue-chip-with-new-quarterly-shareholder-dividend/

AND a buyback program.

And.... 3 million units sold over the opening weekend.

How are those puts doing?

Apple announces a $10B stock buyback program and you want to short the stock? You are brave.

Ian Ollmann says

Apple announces a $10B stock buyback program and you want to short the stock? You are brave.

From the beginning of the movie "True Lies:"

Tom Arnold: "...now that's ballsy. Stupid, but ballsy..."

Apple (565B) > Google (206B) + Microsoft (268.5B) + Amazon (87.5B). To put things in perspective.

BoomAndBustCycle says

Apple has the competitors balls in a vice. They are all scrambling to compete with Apple in the high-end tablet market and failing miserably.

Not true. Droid Tablets will probably reach market share dominance over the iPads by 3Q 2012. I believe they are already about 60-40 in market share, with non iOS or Droid tablets being negligible.

As fast or faster than it took the Droid to dominate the iPhone.

Hilarious! Flash crash! AAPL trading stopped due to circuit breaker this morning.

Some brand-spanky new exchange called BATS was putting out spurious trade orders, and submitted a sale of a mere 100 shares AAPL at 9% below market which tripped a "stop trading".

http://www.cnbc.com/id/46835129

I have a 3% trailing stop set on this stock, but it never triggered since the stock stopped trading immediately and it's bid/ask never really dropped much.

thunderlips11 says

Not true. Droid Tablets will probably reach market share dominance over the iPads by 3Q 2012. I believe they are already about 60-40 in market share, with non iOS or Droid tablets being negligible.
As fast or faster than it took the Droid to dominate the iPhone.

OK, but how do you become financially invested in Droid's potential success?

It seems like fragmented market vs The One. AAPL still sells a shit ton of phones and tablets, still at a premium, and without having to compete with other "nearly identical" brothers the way Droid does...

Comparing Apple to Android is so ridiculous but people do it anyway. I own 1. an android phone with the cheapest plan on earth 2. AAPL.
My Android phone does mysterious things from time to time. It's not rock solid by any stretch. I still like it however.
Apple makes a few hundred bucks on 1. every iPhone 2. every iPad 3. every Macbook air and they're selling the shit out of them worldwide. The sales keep increasing, and there are still billions of people who want one of these products, or several of them.
Look only at how much they sell, how much profit they make, and what is going on with both of those.
You have a problem with your phone. Would you rather 1. go into the Apple store? 2. go into radio shack/verizon store and ask for help with your android?
Personally I like the Apple store and my local Radio shack is full of *those people*.

swebb says

OK, but how do you become financially invested in Droid's potential success?

Droid is a verizon brand, so I suppose you'd buy verizon stock.

Assuming that you actually mean Android, obviously you buy Google, Samsung, HTC, etc.

clambo says

I own 1. an android phone with the cheapest plan on earth

Virgin Mobile?

thunderlips11 says

BoomAndBustCycle says

Apple has the competitors balls in a vice. They are all scrambling to compete with Apple in the high-end tablet market and failing miserably.

Not true. Droid Tablets will probably reach market share dominance over the iPads by 3Q 2012. I believe they are already about 60-40 in market share, with non iOS or Droid tablets being negligible.

As fast or faster than it took the Droid to dominate the iPhone.

Homo Economicus. A Legendary Creature, like Bigfoot, claimed to exist by Pseudoscientists.

Droid is dominating the IPHONE? I thought apple had the highest profit margins of the entire cell phone industry? I would rather sell a million iphones and take a 51% share of the cellular market profits over selling a billion "buy one get one free droids" from htc, samsung, Name your crappy brand here... Each with razor thin profit margins.

Bmwman is correct! I pay $25/month unlimited data/texting. For a few months I was tethering my laptop to the android as a wifi hotspot, just to see if it worked. It did work, I was even able to skype video tethered to my android phone.
Those who are predicting some problems for Apple in the future are wrong. The Apple "ecosystem" is growing a bit stronger with icloud and soon you'll shoot pics/videos with your iPhone, see them on your iPad, which will be a large remote for your Apple TV to play it all on.

I'll skip it myself. I have a roku and use dropbox, but my computers are macs.

BoomAndBustCycle says

Droid is dominating the IPHONE? I thought apple had the highest profit margins of the entire cell phone industry? I would rather sell a million iphones and take a 51% share of the cellular market profits over selling a billion "buy one get one free droids" from htc, samsung, Name your crappy brand here... Each with razor thin profit margins.

Only they don't have "razor thin" profit margins. Samsung has only slightly lower margins than Apple on their smartphones. HTC is also doing quite well, even though their revenues tanked last year when samsung hit them in their main markets.

BoomAndBustCycle says

Droid is dominating the IPHONE? I thought apple had the highest profit margins of the entire cell phone industry?

The Chart I posted is clearly showing Market Share, which is an entirely different concept than Margins.

Apple's margins are fat, but they depend on their Android-making competitors for Apple Components, which could grow into an issue later on.

BoomAndBustCycle says

I would rather sell a million iphones and take a 51% share of the cellular market profits over selling a billion "buy one get one free droids" from htc, samsung,

High Margin or High Volume. Sachs 5th Avenue vs. The Dollar Tree. McD's versus Ruth's Chris. You can make money either way, however when an industry matures it tends towards Volume. They also tend to be mutually exclusive.

At the time of orginal post AAPL was ~$550/share.

Now trading well north of $600.

The answer to end this thread is:

NOT YET

Too bad I couldn't prove that on March 11th, hope the OP didn't lose their nest egg on put contracts.

thunderlips11 says

The Chart I posted is clearly showing Market Share, which is an entirely different concept than Margins.

Apple's margins are fat, but they depend on their Android-making competitors for Apple Components, which could grow into an issue later on.

Your charts are useless and misleading. iOs and OTHERS are the only two categories...

If it were broken down by specific model of phone... or company. The share of iOS would DWARF everything else.

Android is such a fragmented market... Apple does have to watch it's back because the Android market is a lot like the PC market of the 80s/90s.

But i don't believe the tech consumers of 2000 on are anything like the tech consumers of the 80s/90s. They no longer want fragmented open-source market.. The CONSUMER enjoys the ease of use of a SAFE walled garden ecosystem that Apple has nurtured. Apple's brand has never been stronger either.

2 year-olds love the IPAD and 99 year olds love the IPAD. They've done a great job of branding and converting people to Apple products for life.

clambo says

with icloud and soon you'll shoot pics/videos with your iPhone, see them on your iPad, which will be a large remote for your Apple TV to play it all on.

You can already have the photos show up automagically on your AppleTv as well.

Just fyi!

I think it's time to short AAPL in a decade or so, maybe when it's a split adjusted $2000 per share.

I wouldn't short them unless I thought that people were going to stop being fickle consumer whores. Apple is running strong right now, they have mountains of cash and international demand is just getting ramped up. Unless consumers stop being consumers, Apple still has some room to grow.

BoomAndBustCycle says

Your charts are useless and misleading. iOs and OTHERS are the only two categories...

Others is almost entirely Android, Windows and "Other" are a tiny fraction, as seen in the Ring-chart below.

Android is the dominant OS. Here's more charts from various sources for you:

Note that Android dominated iOS despite a lead of several months, within just 2 years.

BoomAndBustCycle says

If it were broken down by specific model of phone... or company. The share of iOS would DWARF everything else.

Why would we do that, it's misleading. If we were to break down PCs by Manufacturer rather than OS, then it might appear that Snow Leopard was running neck and neck with Dell or something. It would be misinformative, since Windows is the most important factor in determining what software your PC can run, not the maker of the PC.

What counts is that Android OS powers the majority of SmartPhones. That determines the ecosystem the user has access to, just like your PC's OS determines what software you can run (Emulators are far from perfect, and the more complicated the software, the less it's likely to work). The App Store or the Multitude of Android Stores

BoomAndBustCycle says

But i don't believe the tech consumers of 2000 on are anything like the tech consumers of the 80s/90s. They no longer want fragmented open-source market.. The CONSUMER enjoys the ease of use of a SAFE walled garden ecosystem that Apple has nurtured. Apple's brand has never been stronger either.

2 year-olds love the IPAD and 99 year olds love the IPAD. They've done a great job of branding and converting people to Apple products for life.

Not seeing this reflected in any trends or numbers. Consumers love choice. If they didn't, they'd all have dumped their Windows machines for Macs and it would be apparent in the trend line. Yet Mac market share is still in the single digits.

And of course, the charts above reinforce that for Smartphones as well. And the power users - the key influencers who influence the casual buyer - prefer flexibility and openness more than most.

Everybody keeps announcing the death of Windows that never happens.

BoomAndBustCycle says

The CONSUMER enjoys the ease of use of a SAFE walled garden ecosystem that Apple has nurtured.

http://securitywatch.pcmag.com/none/296449-flashback-ends-mac-s-no-virus-reputation-experts-say

Kaspersky: Reputation Already Lost

Roel Schouwenberg, Senior Researcher for Kaspersky Lab, observed that "the MacDefender and DNSChanger epidemics from last year were the turning point." He goes on to note that "it became clear to the cyber-crime world that there's money to be made with OSX malware, and we’ve seen an increase in OSX malware since then."

Schowenberg stated, "Percentage-wise, Flashback is roughly the equivalent of Conficker," referring to the multi-vector Conficker Worm that created such a stir in 2008-2009. Most industry metrics for prevalence of PC viruses rely in part on telemetry from security software, so "because so few OSX users are running security software, so the metrics the industry has are limited." Schowenberg concluded, "I hope we can now finally lay the 'Mac has no malware' myth to rest."

Microsoft’s Windows 7 operating system is more secure than Apple’s Mac OS X, claims security researchers at Black Hat.

According to Alex Stamos of iSec Partners, OS X has a greater number of vulnerabilities compared to Windows 7, and when it comes to network security, ’OS X networks are significantly more vulnerable to network privilege escalation,’ and that ‘almost every OSX server service offers weak or broken authentication mechanisms.’

Stamos also goes on to dispel the myth that Mac OS X isn’t attracting attention from hackers. To support this he points out that over the past three years 1,151 major vulnerabilities have affected Apple products, only slightly less than the 1,325 affecting Windows.

http://www.zdnet.com/blog/hardware/black-hat-os-x-networks-are-significantly-more-vulnerable/14130

Owning laptops running windows, linux and mac there is no way windows is "secure" on your pc compared to mac and linux.
Mac is unix so it's inherently more secure for your own equipment.
Windows is already slowly losing it. They are charging computer companies less and less for it since the guys in India and China have decided that Linux is fine for their needs and why pay a huge microsoft tax?
Apple macbook airs are the cool laptop I saw in airport lounges here and there. So are iPads. Of course every place has one sad sack sitting next to the power outlet so he can run his windows craptop for a few minutes, gotta finish that chart "sales by region".
Apple is going to scream when Chinamobile and they finally work out a deal and the iPhone can be bought by those additional 600 million subscribers.

Not yet.

If you want to short something short Facebook once it's done with IPO. That thing looks extremely overvalued.

Look at the aapl chart. It has stable but very high (40% or doubling in 2 yrs) growth for 3 yrs. Steve Jobs dies in Oct. 2011. Within 2 months, it starts to explode, on track to double in just 6 months. It seems like when Jobs died, suddenly a bunch of ppl took note and jumped on the bandwagon.

This is clearly not sustainable & it will come crashing down. If only we knew when...

Apple's valuation is very reasonable. But I don't invest in anything I don't fundamentally understand. And I don't really understand the "Cult of Apple." Consumers are fickle. What happens when they go to the Next Big Thing?