OFFICIAL STOCK MARKET & ECONOMY THREAD VOL. SCHOOL'S OUT

[frankmatthews]

^What "HAS" worked is not necessarily and indicator of what will work going forward.
I think the point is what has worked in the past may be wearing out its welcome if you know
what I mean.

Smart phones and MP3 players are mature markets which means little to no growth and heavy
price competition.  Additionally, in the tablet space companies are going at apple on price as well
and I really don't think they have a response .  Developing countries don't have the income to
significantly affect revenues either imo, not to mention the lack of handset subsidies in foreign
countries.

According to various sources, with Apple's revenues being 1.5% of GDP, and average GDP
per household of $50k, every man woman and child in the country need's to spend 200-300
yearly on apple products in order to maintain revenue, not to mention any additional growth.
With aapl being 6% of the Russel Index, mutual funds are prohibited by law from buying
appl going forward. 5% is the cutoff.  I think appl is about 4% of the S&P right now.

Lastly, from watching financial markets for 10+ years I can tell you that if you see a chart like
appl, its not going to just level off or plateau, and it certainly can't continue through the roof.  Every
bubble in the history of bubbles looks just like appl's chart right now.

I know it feels good to see your investments perform well and to feel lke you've made a good call
and whatnot.  But I would be extremely cautious, at some point we are going to see a pretty steep correction
and appl will feel it hard.  I was joking with a friend the other day, telling him appl's new product line includes
bags for people to hold.

 

[nocomment6]

Originally Posted by FrankMatthews

^What "HAS" worked is not necessarily and indicator of what will work going forward.
I think the point is what has worked in the past may be wearing out its welcome if you know
what I mean.

Smart phones and MP3 players are mature markets which means little to no growth and heavy
price competition.  Additionally, in the tablet space companies are going at apple on price as well
and I really don't think they have a response .  Developing countries don't have the income to
significantly affect revenues either imo, not to mention the lack of handset subsidies in foreign
countries.

According to various sources, with Apple's revenues being 1.5% of GDP, and average GDP
per household of $50k, every man woman and child in the country need's to spend 200-300
yearly on apple products in order to maintain revenue, not to mention any additional growth.
With aapl being 6% of the Russel Index, mutual funds are prohibited by law from buying
appl going forward. 5% is the cutoff.  I think appl is about 4% of the S&P right now.

Lastly, from watching financial markets for 10+ years I can tell you that if you see a chart like
appl, its not going to just level off or plateau, and it certainly can't continue through the roof.  Every
bubble in the history of bubbles looks just like appl's chart right now.

I know it feels good to see your investments perform well and to feel lke you've made a good call
and whatnot.  But I would be extremely cautious, at some point we are going to see a pretty steep correction
and appl will feel it hard.  I was joking with a friend the other day, telling him appl's new product line includes
bags for people to hold.

I don't agree on what you're saying and it may be a bubble, let's just think of what happened to Google.... But I don't think that correction will take place for maybe another year. The hype and enthusiasm about their products is too big and they're launching TV sets which may give it a bit more time.
And another thing I think Apple's marketing is amazing amongst the best. Kind of reminds of McDonalds, they offer a handful of products, but those are good quality (lets consider the taste of MCDonalds and not nutrition facts...). Apple offers, what? MB, MBP, MBA, IMac, Mac Pro, Mac mini, iPad, iPhone, iPod touch, iPod and Shuffle. Thats about 11 products just enough to get everyone hyped over releases and make sure that everyone knows each product, by the name. Who knows what pcs Asus produces or Toshiba or whatever...? 

 

[lazyj10]

Originally Posted by FrankMatthews

^What "HAS" worked is not necessarily and indicator of what will work going forward.
I think the point is what has worked in the past may be wearing out its welcome if you know
what I mean.

Smart phones and MP3 players are mature markets which means little to no growth and heavy
price competition.  Additionally, in the tablet space companies are going at apple on price as well
and I really don't think they have a response .  Developing countries don't have the income to
significantly affect revenues either imo, not to mention the lack of handset subsidies in foreign
countries.

According to various sources, with Apple's revenues being 1.5% of GDP, and average GDP
per household of $50k, every man woman and child in the country need's to spend 200-300
yearly on apple products in order to maintain revenue, not to mention any additional growth.
With aapl being 6% of the Russel Index, mutual funds are prohibited by law from buying
appl going forward. 5% is the cutoff.  I think appl is about 4% of the S&P right now.

Lastly, from watching financial markets for 10+ years I can tell you that if you see a chart like
appl, its not going to just level off or plateau, and it certainly can't continue through the roof.  Every
bubble in the history of bubbles looks just like appl's chart right now.

I know it feels good to see your investments perform well and to feel lke you've made a good call
and whatnot.  But I would be extremely cautious, at some point we are going to see a pretty steep correction
and appl will feel it hard.  I was joking with a friend the other day, telling him appl's new product line includes
bags for people to hold.

I have some holdings in Apple, but it's hardly significant to my portfolio.  So I'm not all that worried about it.  I'm no Apple expert by a long shot, but statements like yours in the first paragraph don't hold as much weight to me.  You're saying "may be wearing out its welcome".  Fine, but what number support shows that?  A dip in sales? By most accounts, they're still up ticking.  If their quarterly figures are low, it's traceable to not having refreshed their product line(s).  They don't need to fine tune their phones for a MP3 because like you said, it's a mature market, however, video/HD video and work components are growth areas.

Further, I saw the same data as you in regards to the amount one would need to spend on Apple products to contribute to maintain revenue.  This assumes no additional product pipelines, right? Also, as ebooks become more envogue, I'd imagine there's a large insittutiontal (HS and higher education) source of revenue that's largely untapped right now and basically in its infancy.

In regards to the above, it also discounts the fact that, Apple can acquire companies to further their growth should they want to.  Couldn't they acquire a start up or a more mature company (in the sense that their products are more defined than Apple's, not in terms of longevitiy) with their boatloads of cash to enhance a product or further one of their own?  Think something like Chegg. 

Lastly, technicals aside, isn't their FTM still lower compared to the average in the S&P?  I could be tripping since I haven't looked/heard it in a bit, but I'm saying...

  

 

[runningfishy]

Originally Posted by LazyJ10

Originally Posted by FrankMatthews

^What "HAS" worked is not necessarily and indicator of what will work going forward.
I think the point is what has worked in the past may be wearing out its welcome if you know
what I mean.

Smart phones and MP3 players are mature markets which means little to no growth and heavy
price competition.  Additionally, in the tablet space companies are going at apple on price as well
and I really don't think they have a response .  Developing countries don't have the income to
significantly affect revenues either imo, not to mention the lack of handset subsidies in foreign
countries.

According to various sources, with Apple's revenues being 1.5% of GDP, and average GDP
per household of $50k, every man woman and child in the country need's to spend 200-300
yearly on apple products in order to maintain revenue, not to mention any additional growth.
With aapl being 6% of the Russel Index, mutual funds are prohibited by law from buying
appl going forward. 5% is the cutoff.  I think appl is about 4% of the S&P right now.

Lastly, from watching financial markets for 10+ years I can tell you that if you see a chart like
appl, its not going to just level off or plateau, and it certainly can't continue through the roof.  Every
bubble in the history of bubbles looks just like appl's chart right now.

I know it feels good to see your investments perform well and to feel lke you've made a good call
and whatnot.  But I would be extremely cautious, at some point we are going to see a pretty steep correction
and appl will feel it hard.  I was joking with a friend the other day, telling him appl's new product line includes
bags for people to hold.

I have some holdings in Apple, but it's hardly significant to my portfolio.  So I'm not all that worried about it.  I'm no Apple expert by a long shot, but statements like yours in the first paragraph don't hold as much weight to me.  You're saying "may be wearing out its welcome".  Fine, but what number support shows that?  A dip in sales? By most accounts, they're still up ticking.  If their quarterly figures are low, it's traceable to not having refreshed their product line(s).  They don't need to fine tune their phones for a MP3 because like you said, it's a mature market, however, video/HD video and work components are growth areas.

Further, I saw the same data as you in regards to the amount one would need to spend on Apple products to contribute to maintain revenue.  This assumes no additional product pipelines, right? Also, as ebooks become more envogue, I'd imagine there's a large insittutiontal (HS and higher education) source of revenue that's largely untapped right now and basically in its infancy.

In regards to the above, it also discounts the fact that, Apple can acquire companies to further their growth should they want to.  Couldn't they acquire a start up or a more mature company (in the sense that their products are more defined than Apple's, not in terms of longevitiy) with their boatloads of cash to enhance a product or further one of their own?  Think something like Chegg. 

Lastly, technicals aside, isn't their FTM still lower compared to the average in the S&P?  I could be tripping since I haven't looked/heard it in a bit, but I'm saying...

  

I respect all the talk you and Frank Matthews has shared, but more indicative than not, what happens in the past will 'hardly' repeat itself!  This is why 'history' is hindsight each and every day.

Steve Jobs died, leaving a trail of ideas yet to be fulfilled.  But there has not been another 'iconic' brand breakthrough for them, and this is what I'm talking about.  I'm not talking about what Steve has "LEFT" them.  I'm talking about the next generation of products that AAPL should be developing.

Bottom line though, I'm not one to argue PRICE ACTION, but to say that this fat turkey will fly to the moon is a bit absurd.  It just takes time from a valuation standpoint because the elasticity of the price has been stretched WAY too far.  

 

[dajoka004]

Frank, did I just read you say that the smartphone market is mature? You have got to be kidding me. 50% of Americans own a smartphone. That's mature to you? How about China. Is that a mature market too? Is Apple done growing in China even though the biggest Chinese mobile carrier doesn't have the iPhone yet, and the second and third biggest just got it last year? I see AAPL at $750 by January 2013. $1000 by Jan 2014. Huge worldwide growth potentials in the phone, tablet and PC markets. All your talk is useless unless you start throwing out numbers. Where do you see AAPL in Jan 2013 and 2014?

 

[runningfishy]

AAPL is a pure brand, visionary company with controls over its marketing. It doesn't even 'make' displays.

 

[dajoka004]

Originally Posted by RunningFishy

AAPL is a pure brand, visionary company with controls over its marketing. It doesn't even 'make' displays.

Like I said on the last page, put your money where your mouth is and short it if you're so bearish.

 

[runningfishy]

Originally Posted by DaJoka004

Originally Posted by RunningFishy

AAPL is a pure brand, visionary company with controls over its marketing. It doesn't even 'make' displays.

Like I said on the last page, put your money where your mouth is and short it if you're so bearish.

That's stupid.

Fundamentals and earnings DO NOT NECESSARILY MOVE a STOCK's PRICE.  Supply/Demand/Liquidity does!!  That's a FACT already bro.  I hate AAPL, I don't own their products, but I am not SHORTING IT.  You cannot BRIDGE your FEELINGS with PRICE ACTION together !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Like all the average joes that traded amazon/AAPL, is still a stock that's bubbling.  There are plenty of other sectors worth shorting, and the bus for that has already moved.  Most people would buy aapl's dip, as opposed to sell it.  THAT'S THE CORRECT WAY IN TRADING.  IT'S NOT SOME MAGICAL FORMULA, NOR IS IT DEPENDANT ON ONE'S MOOD TOWARDS THE COMPANY OR STOCK.
  

 

[Betonblck]

^ while the large letters are annoying, he does have a point. There is a quote that goes something like "the market can stay irrational longer than you can stay solvent".

 

[crazy dav0]

i got out of my apple option taking profits b4 apr option expiration ... gonna wait for a pull back next week and go long on earnings ... at least that is my thinking right now ... i'm not sure yet if i wanna play the earnings game w/ apple

 

[dajoka004]

Why are you in here spouting off then? You seem to believe that at some point AAPL will have a downturn. Your opinions are worthless until you start giving us some future price points you see. Why don't you step up to the plate, bro?

 

[runningfishy]

It's just my 2 cents, and if I needed to really throw PRICE POINTS, I'd go with OPTIONS.

People the believe in 'calling' are simply gamblers, not traders. Why would I throw price points? That's the number 1 rule if you want to lose money.

Options should be used as a 'hedging' strategy. Otherwise, it's a deadly leverage that will have odds against you 9/10 times!

Of course AAPL will have a down turn, it's common sense, it's a cycle. The question is WHEN!

 

[dajoka004]

Originally Posted by RunningFishy

It's just my 2 cents, and if I needed to really throw PRICE POINTS, I'd go with OPTIONS.

People the believe in 'calling' are simply gamblers, not traders. Why would I throw price points? That's the number 1 rule if you want to lose money.

Options should be used as a 'hedging' strategy. Otherwise, it's a deadly leverage that will have odds against you 9/10 times!

Of course AAPL will have a down turn, it's common sense, it's a cycle. The question is WHEN!

What's the point of even posting then? What are you trying to accomplish? Even you recognize you're stating the obvious. Where will AAPL be a week, a month, a year, two years from now? If you're just going to say down in the future, you're only blowing hot air.

 

[freakydestroyer]

Hilarious

 

[xkrispyeli]

Started to short sale GROUPON today

 

[lazyj10]

All right I'm done with talking about Apple...I'm not trying to sway anyones position on it but understand other perspectives. Some of you have validity in your arguments and reasoning whereas some others not so much. It's like a pissing contest

 

[degenerate423]

I'm hoping APPL takes a hit, but, to be honest, I don't see it slowing down this year.  It will hit $700 no problem, I mean they're really undervalued when you think about it, they're worth about $500 BILLION.  Even with the iPad having some issues with overheating, they just continue to move forward.  Until someone comes out with some game changing #$$%, APPL is gonna be sitting at the top...

 

[freakydestroyer]

I just read RunningFishy's posts and I do agree with him on certain points. Now, I'm just curious as to how he trades.

 

[frankmatthews]

Originally Posted by nocomment6


I don't agree on what you're saying and it may be a bubble, let's just think of what happened to Google.... But I don't think that correction will take place for maybe another year. The hype and enthusiasm about their products is too big and they're launching TV sets which may give it a bit more time.
And another thing I think Apple's marketing is amazing amongst the best. Kind of reminds of McDonalds, they offer a handful of products, but those are good quality (lets consider the taste of MCDonalds and not nutrition facts...). Apple offers, what? MB, MBP, MBA, IMac, Mac Pro, Mac mini, iPad, iPhone, iPod touch, iPod and Shuffle. Thats about 11 products just enough to get everyone hyped over releases and make sure that everyone knows each product, by the name. Who knows what pcs Asus produces or Toshiba or whatever...? 

Look at googles chart then look at apples.  Hype and enthusiasm is definitely too big.

LazyJ10 wrote:

---

I have some holdings in Apple, but it's hardly significant to my portfolio.  So I'm not all that worried about it.  I'm no Apple expert by a long shot, but statements like yours in the first paragraph don't hold as much weight to me.  You're saying "may be wearing out its welcome".  Fine, but what number support shows that?  A dip in sales? By most accounts, they're still up ticking.  If their quarterly figures are low, it's traceable to not having refreshed their product line(s).  They don't need to fine tune their phones for a MP3 because like you said, it's a mature market, however, video/HD video and work components are growth areas.

Further, I saw the same data as you in regards to the amount one would need to spend on Apple products to contribute to maintain revenue.  This assumes no additional product pipelines, right? Also, as ebooks become more envogue, I'd imagine there's a large insittutiontal (HS and higher education) source of revenue that's largely untapped right now and basically in its infancy.

In regards to the above, it also discounts the fact that, Apple can acquire companies to further their growth should they want to.  Couldn't they acquire a start up or a more mature company (in the sense that their products are more defined than Apple's, not in terms of longevitiy) with their boatloads of cash to enhance a product or further one of their own?  Think something like Chegg. 

Lastly, technicals aside, isn't their FTM still lower compared to the average in the S&P?  I could be tripping since I haven't looked/heard it in a bit, but I'm saying...

  

If there were numbers to support that I'm sure the market would be pricing that in.  The numbers to support this astronomical rise are just as subjective
imo. I was merely clarifying on what I thought the previous poster was getting at about past performance not predicting future results.  Speculating on
when or if they have worn out their welcome is all part of company analysis and everyone will have a different conclusion to their analysis.  Is video/hd
going to increase their margins?  Move more units?  Unlikely.  And if it did the competition is too intense for that to be a sustained advantage.

Institutions are not going to opt for the more expensive apple products as evident by the majority of college computer labs.  Competitors can offer the same
features at a fraction of the cost if you are talking about ebooks. Institutions generally don't buy apple products unless it is for specialties within departments.

I'm not saying they are going out of business, they are a great company that has a very unique position.  I think they will continue to be very  successful.
The stock price is another story.

DaJoka004 wrote:

---

Frank, did I just read you say that the smartphone market is mature? You have got to be kidding me. 50% of Americans own a smartphone. That's mature to you? How about China. Is that a mature market too? Is Apple done growing in China even though the biggest Chinese mobile carrier doesn't have the iPhone yet, and the second and third biggest just got it last year? I see AAPL at $750 by January 2013. $1000 by Jan 2014. Huge worldwide growth potentials in the phone, tablet and PC markets. All your talk is useless unless you start throwing out numbers. Where do you see AAPL in Jan 2013 and 2014?

I'm not sure if you are familiar with product life cycle theory, but yes, smartphones in the US are a maturing market and I think most analysts agree.  Mature
doesn't mean everyone has one or that the market is even saturated.

1% of the Chinese population makes over $12,500 a year.  77% make less than $3k.  How many $400 iphones and $700 ipads are they really gonna sell at this point.
This opportunity is years off.  Not sure but I don't think they have the subsidies there that they do here either.

Your multiples and estimates are subjective and thus so are your price points.  As was pointed out in big bold letters by another poster, stocks don't trend
to their subjective valuations, they trend based on supply and demand and the emotions and mentality of market participants.  Meaning, even if your analysis
 was spot on, it doesn't meant the stock will trade there.  I do expect a pretty steep correction in the overall markets to hinder price performance going forward. 
I'm thinking  10% or so within the next 12 months.  Smart money is starting to take money off

 

[freakydestroyer]

A lot of stocks are just screaming "Short". SBUX, HD, GOOG, LULU  just to name a few. 

 

[dajoka004]

Originally Posted by freakydestroyer

A lot of stocks are just screaming "Short". SBUX, HD, GOOG, LULU  just to name a few. 

I love SBUX. I wanted in around $45, but didn't have enough capital to do so. The P/E scares me, but coffee is BIG business, and Starbucks does it consistently well. I'm a coffee snob myself. When I'm in Charlottesville I don't touch the stuff because there's a local shop that is the best I've ever had. But if I'm on the road, Starbucks is always my best bet. I was there post-Easter mass yesterday. Very nice crowd. I'd like to wait for the price to drop a little before I got in though. Definitely considering LEAPS.

 

[freakydestroyer]

I'm not saying that SBUX is going to file for bankruptcy, they're going to be around forever. Same goes for just about every company on that list. I just think their stock prices will return to Earth soon, that's all. I'm setting up a list of stocks to short for when the market corrects. 

 

[dajoka004]

Earnings season starts tomorrow with Alcoa post-market. Everything is down big pre-market today. I see us trading down today and sideways tomorrow. This earnings season isn't expected to be great, but that sets us up for nice "surprises". With the exception of AAPL, I'm in all small-caps that don't necessarily trade with the market, so I'm not pulling anything off the table here even though I expect the overall market to take a hitting the coming weeks.

 

[freakydestroyer]

AOL 

Congrats to whoever has a position. 

 

[nocomment6]

Wow, I thought today was a holiday...and I was in for a surprise to see BAC drop even further. pffff, not good. You guys think it's facing a change of trend?

What happened to AOL? wow....

As for AAPl earnings: http://www.macrumors.com/...ted-quarterly-mac-sales/