patrick.net

B.A.C.A.H. says

Jobs had even endorsed Big Plans for a new campus in Coyote Valley before his departure.

I had not heard that one before, but Cisco made exactly the same plans in 1999, right before the dot.com bubble imploded. And Coyote Valley is still there, untouched.

Right now, Apple is also planning that Spaceship building on, where is it, Tantau Ave in Cupertino? Be very afraid.

The thing that worries me is the overweight influence of AAPL on the NASDAQ. What happens the day they finally don't meet Wall Street expectations? Tech stocks will drop like a rock even if they have nothing to do with Apple. One reason I stopped investing in any other tech stocks, this one stock has become like a surrogate for owning QQQ.

Vicente says

The thing that worries me is the overweight influence of AAPL on the NASDAQ. What happens the day they finally don't meet Wall Street expectations? Tech stocks will drop like a rock even if they have nothing to do with Apple. One reason I stopped investing in any other tech stocks, this one stock has become like a surrogate for owning QQQ.

This concern had already built into the price. P/E(fwd) is only 11.97, PEG is only 0.65 despite its earnings is growing at 90+%. Secondly, you don't know when AAPL would finally don't meet Wall Street expectations. Many of friends are worried about this for like almost 10 years and still are worried.

justme - Tech stocks such as cisco has ridiculously high P/E (>60) and PEG much greater than 1 aka excessive overvalued during the dotcom boom. Current P/E and PEG of AAPL are much lower, in fact, is in the undervalued space.

Vicente says

The thing that worries me is the overweight influence of AAPL on the NASDAQ. What happens the day they finally don't meet Wall Street expectations? Tech stocks will drop like a rock even if they have nothing to do with Apple. One reason I stopped investing in any other tech stocks, this one stock has become like a surrogate for owning QQQ.

Great point.

One other worry is Facebook. They generated less income this quarter than a year ago. Troubling, because this was the last quarterly earnings prior to the IPO. A disappointing Facebook launch could also send the NASDAQ down.

http://articles.marketwatch.com/2012-04-24/industries/31385531_1_first-quarter-revenue-jumps-zynga-social-network

hanera says

Secondly, you don't know when AAPL would finally don't meet Wall Street expectations.

This is true. APPL is really good about managing expectations and then exceeding them. However, there is criticism of the analysts in that, given how often it's happened, they should take that into account going forward.

Analysts never want to look like they guessed wrong, so they tend to underestimate. This way they later say "Apple beat our expectations! Wow!"
If the random analyst predicted something that did not happen, it would look like he made a "mistake".

clambo says

Analysts never want to look like they guessed wrong, so they tend to underestimate. This way they later say "Apple beat our expectations! Wow!"

Actually, evidence points generally in the opposite direction; Analysts tend to be overly optimistic:
http://www.mckinseyquarterly.com/newsletters/chartfocus/2010_07.htm

Here's what an iPhone, unlocked without carrier contracts, costs around the world.

thunderlips11 says

One other worry is Facebook. They generated less income this quarter than a year ago.

I saw an article about this in the SJ Mercury News. It says that the lower revenue is due to FB pouring a gigantic portion of income into R&D, thus lowering their reported revenue. So, FB is probably doing fine overall.

facebook oh brother.
google and apple could eat facebook for lunch which may eventually happen.

bmwman91 says

I saw an article about this in the SJ Mercury News. It says that the lower revenue is due to FB pouring a gigantic portion of income into R&D, thus lowering their reported revenue. So, FB is probably doing fine overall.

What dropped was the gross margin. Facebook is probably reaching saturation point; the real challenge going forward is monetizing the users and supplying the infrastructure to get there. A problem all maturing businesses face.

Some wonder whether delaying the IPO was a wise idea, they seem to be tilting into 'established business phase' now, which makes them less appealing as a growth stock.

Hey, we beat zerohedge by discussing Apple price share vs student loan debt here first:
http://www.zerohedge.com/news/presenting-your-correlation-consideration-transfer-payment

treatmentreport says

Hey, we beat zerohedge by discussing Apple price share vs student loan debt here first:

Right on!

Speaking of Zerohedge, you know what we need here? A little William Banzai for the "Just wait until the median Chinese household spends 1/10th their entire yearly income on an iPhone that costs $900 in Beijing":

Ten Thousand Years' health to Chairman Jobs!

treatmentreport says

Hey, we beat zerohedge by discussing Apple price share vs student loan debt here first:

Oh please, we've been over this before. The prime demographic purchaser is not a college kid. You just NOTICE them more.

Vicente,

I don't think the student debt is growing fast because of young college kids. I believe that there are many people in their mid thirties hiding out in business schools, various masters programs, as well as many vocational schools. That demographic fits pretty well with iPad and iPhone purchases.

thunderlips11 says

Here's what an iPhone, unlocked without carrier contracts, costs around the world.

yes in some cases, the foreign product sale may carry a lower price compared to US markets.

MS windows is actually much much cheaper in china compared to US markets.

bmwman91 says

I saw an article about this in the SJ Mercury News. It says that the lower revenue is due to FB pouring a gigantic portion of income into R&D, thus lowering their reported revenue. So, FB is probably doing fine overall.

Increases in RD and SM due to def compensation... cant pour anything since Def Comp is non-cash anyway. Equal amount to be amortized following quarter.

Research and development expenses in the first quarter of 2012 increased $96 million, or 168%, compared to the same period in 2011.

The increase was primarily due to an increase of share-based compensation expense related to Post-2011 RSUs from $4 million in the first quarter of 2011 to $60 million in the same period in 2012. Payroll and benefits expense also increased due to a 55% growth in employee headcount in engineering, design, product management, and other technical functions. This investment supported our efforts to improve existing products and build new products for users, developers, and advertisers.

Marketing and sales expenses in the first quarter of 2012 increased $91 million, or 134%, compared to the same period in 2011. The increase was primarily due to an increase in our user-, developer-, and advertiser-facing marketing, and to a lesser extent, an increase in payroll and benefits expenses resulting from a 34% increase in employee headcount to support global sales, business development, and customer service.

Additionally, share-based compensation expense increased to $23 million in the first quarter of 2012 due to recognition of expense related to Post-2011 RSUs. In the same period in 2011, share-based compensation expense was immaterial.

Jeffrey R. Vetter, Esq

This guy has done more IPOs than anyone can imagine...
He must by now have a room or walls full of Tombstones

Its a small world after all!

thomas.wong1986 says

Jeffrey R. Vetter, Esq

This guy has done more IPOs than anyone can imagine...
He must by now have a room or walls full of Tombstones

Its a small world after all!

I'd say Wilson-Sonsini have down a shitload more IPOs than those guys.

So he is on the Facebook S-1. Big deal ;)

Besides, we should not admire lawyers.

justme says

B.A.C.A.H. says

Jobs had even endorsed Big Plans for a new campus in Coyote Valley before his departure.

I had not heard that one before, but Cisco made exactly the same plans in 1999, right before the dot.com bubble imploded. And Coyote Valley is still there, untouched.

Right now, Apple is also planning that Spaceship building on, where is it, Tantau Ave in Cupertino? Be very afraid.

If you are interested, you can probably find the story from more conventional sources than this one, but what he wrote is how I remember it as it was reported in the 1980's:

from http://www.cringely.com/2010/12/edifice-complex/

Apple bought a huge piece of Bay Area property for a new corporate campus, promising to develop the land into an enormous project that would allow thousands of company employees to live, work, shop and play without ever having to leave company property. It would be the perfect community for staffers who are allowed to work any 80 hours per week they choose. This may sound a lot like Apple’s plan to redevelop the old Hewlett-Packard Cupertino campus about a mile from current Apple headquarters on Infinite Loop, but it isn’t. What I’ve just described was Apple Computer’s plan to develop 640 acres in Coyote Valley south of San Jose, circa 1985.
What goes around comes around.
Back in the early 1980s, Apple Computer Chairman Steve Jobs drove the company to buy a big chunk of the pristine Coyote Valley, at that time devoted to agriculture, and turn it into a world class live-work environment for up to 25,000 of Apple’s rabidly loyal employees. The land was purchased but the building never started because Jobs lost his job in a political battle with then-CEO John Sculley sending Apple into its own Dark Ages.

B.A.C.A.H. says

and turn it into a world class live-work environment for up to 25,000 of Apple’s rabidly loyal employees

live-work .. rabidly loyal... hum! aka "commune" where they can worship "The One" and seek enlightment. I dont think many at all were that naive to worship Jobs.

bmwman91 says

pouring a gigantic portion of income into R&D

that is hilarious, expensive "R&D" in social networking. What kind of expensive R&D is that?

B.A.C.A.H. says

bmwman91 says

pouring a gigantic portion of income into R&D

that is hilarious, expensive "R&D" in social networking. What kind of expensive R&D is that?

Focus groups and a lot of hanging out in tapas bars and coffee shops with idle Facebook losers....err users

LOL.

Amazon Kindle Fire sales were really good according to Amazon. I would not be surprised if it outsells iPad in q4 with its new version and cheaper content. iPad will still make a lot more money since Fire has no profit margin but it's a real competitor in consumer space. Who is going to be a competitor in corporate space, Nokia?

AAPL needs to split their shares already.

I was reading recently that 77% of AAPL is owned by "institutional investors", i.e. mutual funds, pensions, etc.
This means to me that relatively few AAPL shares are owned by individuals, so the shares have room to go up. Why?
Because institutional investors still limit themselves to amouts of shares of any stock they buy. Few mutual funds can make large "bets" on any particular stock. Fidelity Contrafund for example loves AAPL but there are probably 400 stocks in the portfolio.
There is lots of room for sales to grow in profitable iPhone, iPad, iTunes, Macbook airs, etc.
So, AAPL will continue to go up. The question is: Do you think it will go up 1. as fast as the overall stock market 2. 2x or 3x as fast as the overall market?
I think AAPL is going to go up several times the overall market, so I am making a wild "guestimate" of 20% per year over the next few years.
I'm expecting AAPL therefore to double in a three years or so.
My investment time horizon is 10 years plus anyway.

clambo says

The question is: Do you think it will go up 1. as fast as the overall stock market 2. 2x or 3x as fast as the overall market?

PE ratio is a "nose bleed" level of 14.69x earnings
with Beta at .99

S&P is at 14x earnings

Linkedin is well past pluto at 1000x earnings

The PE will drop as Apple makes more money.

Note the profit growth of some others was negative for the last quarter, Apple almost grew profits 100%.
If they keep doing that for a few years, watch out.
AAPL $1000 in less than 3 years, AAPL $1500 in 4 years.

I saw this movie before.
Was it in 1998 or 2000?

The only difference is that there are TONS of good companies back then.

No one has seen this before.
Apple Tv will come out in a while. Fanboys will buy them slowly but this will get Apple more dough from iTunes and the TV itself of course.
After a 100 million or so of the TVs are sold, Apple will have a nice stream of income like netflix from iTunes movie sales, etc.
Apple will also go after Paypal and start allowing you to pay for things with your iPhone. That's a nice little 2% margin all CASH business. Mo money!
Imagine skimming 2% of everything every rabid consumer buys by simply flashing their new fancy "liquid metal" iPhone? oh man.

Actually, I really do not know how much paypal/mastercard/visa makes but I guess 2%.

I believe that the current large money-shufflers pull 3%.

http://finance.yahoo.com/q?s=AAPL

Back to ~$570. Not big into tech analysis, but looks like a head and shoulders to me.

Closed at $553 today.

Peaked at $636 in early April.

Outstanding shares: 900M

So, 900M x ($636 - $553) = $74.7B in "wealth" that has disappeared.

Honestly, it is anyone's guess what is going to happen with it over the next 3-6 months. My bet is that it falls a little more & flattens out until the iPhone 5 launch.

In 2000, everyone thought Nokia will take over the world.
Now it has negative earning.

Tech companies are risky.
Facebook is way to go.

xenogear3 says

Facebook is way to go.

Ha, yeah it's a sure thing if I ever saw one. Some guy that claimed to know about stocks said it was "muppet bait." I am not sure what that is, but those muppets sure are cute & nice, so I bet it means I should buy FB stock. I mean hell, I have HEARD of the company, so how can I lose?!

Oh and it looks like it'll close around $10 lower today. Did anyone in here actually short AAPL and are they sitting pretty now?

yes. started at 525 in four increments to the top. Closed two increments around 570, one today, still holding one. Most likely it will go back to low 400s but I don't need to wait to find out.

I just bought more AAPL today.
I needed to get my average cost per share back down ;)

I'm still sitting. I cashed out at 600+ and will wait until at least 525 before scaling back in. Dependent on macroeconomic or Apple news of course.