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  • How Low Will Apple Shares Go This Time? [View article]
    ituchwon:
    Best of luck to you. Let's check back in 20 years and see how much AAPL percent return is over that time frame.
    Jun 24 07:41 AM | 1 Like Like |Link to Comment
  • How Low Will Apple Shares Go This Time? [View article]
    Gen.

    I only have about 20 years of investing experience under my belt. Some people have more, some have less.

    I have learned a lot over those years. Before I invest in a company (notice I am saying invest, not trade- just for clarity) one of the things I ask myself is : What sort of total return can I project going forward from the stock based on the company's business, future project, etc. That is part of a successful investing mindset. You had mentioned no one thinks 30 years out. Maybe not 30 years but 20 years they should think about. That is how successful investors create wealth over time.

    Analysts are completely useless and are doing nothing more than guessing at what a company's earnings might be from quarter to quarter. I think it has been about 15 years since I learned that therefore I pay no attention to them.

    "I suggest you should stop fabricating out of thin air what "investors" are projecting in 9 years out or 30 years out. There might not be any humanoid life on earth in 30 years."
    There will be life on earth in 30 years. Based on what I read and hear from people about their hopes and prayers for AAPL stock it is pretty easy to project what people hope will happen to AAPL stock over the next 30 years.

    See one of the things you don't understand (It is not your fault- the investment industry and the media fail to educate the investing public) is that while revenue and earnings growth go hand in hand with stock price appreciation as the market cap of the company exponential expands- once the market reaches a point where it becomes unmanageable and cannot keep doubling and doubling over and over, the stock price no longer correlates to the earnings growth. So a company can keep earning more and more and appear to get cheaper and cheaper on a valuation basis and have more and more cash, the stock price rate of return keeps dropping.

    You brought up cash, P/E, revenue, etc. however again it is now at a point where that discussion is meaningless. The market cap of AAPL will not keep doubling and doubling and doubling at it's previous growth rate because the laws of large numbers will see to that. It is mathematically impossible. You can take a 10 billion dollar market cap company and watch it grow to 110 billion market cap company for a 1000% return.

    If you take a 110 billion dollar market cap company and add the same 100 billion in market cap that you just added to the previous example you now have a 210 billion dollar market cap company however your return is only now 90%. That is a drop off of 910%. Your rate of return is dropping.

    It has taken AAPL decades to grow its market cap to 550 billion for a return of 1000's of %. If AAPL took another 3 decades to add the same 550 billion in market cap to the current market cap, your return over the next 3 decades would be a mere 100%. That's it.
    That is called inability to exponentially expand the market cap thus leading to declining rates of return.

    This has nothing to do with price technical's of a stock. I have not been talking about stock price. This has to do with mathematics.

    Last point: Think about this- AAPL had an amazing decade with phones, I-PADs etc. Lets say they come up with the next great thing. Watches, etc. Whatever. Lets assume the products are equally as good as the previous ones which in turn provide the growth stimulus to propel the stock higher the same degree as the past. I am not talking about stock price as a number, I am talking about the market cap as it expands because the stock price goes up. 550 billion in new market cap is not exactly a number that can be added in a year. It takes decades. So AAPL adds another 550 billion in new market cap. Amazing right?. It's still a 100% return any way you slice it.

    APPL like almost all other stocks, is never going to be worth trillions in market cap. Ever. I am not even the least bit concerned I am incorrect.
    The mathematics will see to it.
    Jun 23 04:51 PM | 1 Like Like |Link to Comment
  • How Low Will Apple Shares Go This Time? [View article]
    gen:

    I don't know but on occasion when I do read comments both on SA and on many other sites it seems pretty clear to me that most AAPL investors truly believe that over the next 3 decades or so that AAPL is going to return to them a level of % return that far, far exceeds what reality is going to really be. Maybe not 9000% but I think it is safe to say that most think AAPL is going to give them at least a 5000% return over the next 30 years.

    Pssst: Never going to happen.
    Jun 23 11:50 AM | Likes Like |Link to Comment
  • How Low Will Apple Shares Go This Time? [View article]
    ituchwon:
    There was no reason, none, for AAPL to split it shares. If someone could not afford the stock at $500 they should not be in the market in the first place. So they get to buy 5 shares as $90 instead of 1 at $500. Sound like a millionaire in the making for sure..LOL.

    In a way the shares are created out of thin air. Yes they are taking the current shares and dividing them by seven however it was completely unnecessary.
    Instead of keeping the float a manageable number they now have 6 billion shares outstanding which coupled with a market cap now limited by exponential expansion which is the kiss of death for mega cap stocks.

    I guess it does give them flexibility to "manage" their earnings better now, though to me that is not a positive because they are now admitting that just like IBM, GE, etc. they can buy back (or waste shareholder money) shares at will when they need to meet street estimates in the future. To split shares by seven only to buy back the very shares you just created is comical. The market cap doesn't change just the obscene amount of floating shares. As I said AAPL should have rewarded their shareholders with even more real cash or R&D not buying back the pieces of paper they just created from the other piece of paper.

    What is going to be interesting as I have seen over the past decade is when investors are all going to be talking in the year 2024 and complaining that AAPL did not return to them the 1000's of % return they thought they were entitled to just like the folks who bought AAPL in 2003 and watched it return 8000% over the next 10 years.

    But whatever. Inability of exponential market cap expansion leading to declining rates of return is something most people do not understand or want to admit because most investors are deluded into thinking that stocks can keep doubling and doubling in price indefinitely.
    Jun 23 11:47 AM | Likes Like |Link to Comment
  • How Low Will Apple Shares Go This Time? [View article]
    Thank you relayer for your comment.

    There may not be dilution in that sense of the word however when you go from a few hundred million outstanding shares to 6 Billion outstanding shares it does have an affect longer term. (This has been illustrated by other companies IE MSFT & CSCO).

    The concept of declining rates of return as a result of inability to exponentially expand market caps is a concept people do not want to address.

    I think a young investor in AAPL today is going to be extremely shocked to find that over the next 30 years their investment "might" return perhaps 200% total return especially when are thinking that AAPL should be returning a few thousand % over that time frame.

    Mathematically it cannot.

    Best to you.
    Jun 23 09:42 AM | Likes Like |Link to Comment
  • How Low Will Apple Shares Go This Time? [View article]
    I wanted to add to my own comment a clarification.

    My comment is directed towards investors not traders. I wanted to make that distinction because they are two very different animals.

    Thank you.
    Jun 23 09:27 AM | 1 Like Like |Link to Comment
  • How Low Will Apple Shares Go This Time? [View article]
    It is not a matter of how low AAPL will go.

    It is a matter of how much it is "not" going to return going forward in relation to who is investing and at what stage of their investing life. (Assuming of course AAPL doesn't fall to $10/ share or something, then what I am about to say does not apply)

    The group who should be most concerned is the young to mid level investing group who are wondering "Should I invest in AAPL now?" or "If I invest in AAPL now, is this stock going to return to me the same sort of returns that previous investors have seen in the past 15 years?".

    Unfortunately there is mass delusion out there that AAPL is only a year away from another repeat of the 2003-2012 run and a return of 9000%. Fueling that is also the comical notion that just because AAPL split their shares and the price is lower that new investors are going to pile in because they can "afford" the stock price now. (Ah yes pure media nonsense right out of their brainwashing script)

    On a side note, is a shame AAPL decided to debase their value by splitting the shares and flooding the market with billions of shares now. Now they are going to start buying back the very shares they created out of thin air for the split with shareholder money. They would have been better off creating real value by either returning money via. more dividends directly into shareholders pockets or buy investing even more into R&D. Serious, educated investors already understand this.
    Bottom line on this: If you can't afford to buy one share @ $500, you don't belong in the market. Save up some more money and come back when you have enough.

    Then again the media has done a masterful job of brainwashing people into believing that splits and buybacks create real value when in reality nothing has changed. (Yes buybacks increase EPS so a company now has a tool to use to increase earnings when they need it. I guess I prefer true, organic EPS numbers)

    I suggest younger investors who are hungry for real education (Turn of the TV and the asset gathering "salespeople") research all they can on the subject of: "Declining rates of return" as they relate and are caused by the inability of "Exponential market cap expansion"

    These topics are crucial for younger, new to the market investors and I suggest that people of that investing group understand what they mean and how they might relate to your goals for the future.

    Let me end by saying : You cannot keep doubling and doubling and doubling the market cap of a company due to various reasons (I will let others interested learn for themselves) and your rate of return in any attempt to do so keeps dropping and dropping.

    Learn folks and turn off the media!
    Jun 23 09:13 AM | 2 Likes Like |Link to Comment
  • Shares of Coach reeling after revenue warning [View news story]
    Uh oh. The rich cut back on spending? Hmm..

    Cause we know that everyone else just owns counterfeit COH.
    Jun 19 12:33 PM | 1 Like Like |Link to Comment
  • Retirement Strategy: Chasing Yield Is Actually Looking For Disaster [View article]
    Portfolio yield somewhere around 5.5%-6% right now with no more risk than the S&P 500 index. Portfolio up i think about 14% YTD. Up about 300% since year 2000 Vs. S&P 500 gain of about 33% (Dividends included for all)

    Last year was the first year in 15 that i didn't surpass the index. Missed it by about 5%. Then again Bill Miller losses 38% in a given year, the S & P 500 loses 40% in the same year and they praise Bill Miller as "legendary"... LOL. Go figure. Then again he is one with the multiple houses, yachts and boatloads of cash in the bank.

    Anything is possible if effort is made and you manage your portfolio as a business.
    Jun 19 12:23 PM | 6 Likes Like |Link to Comment
  • Retirement Strategy: Chasing Yield Is Actually Looking For Disaster [View article]
    Clearly.
    I agree 100% with what you say based on those stock examples. This portfolio of Mreits, Line & one BDC is clearly a focused disaster waiting to happen. (I do own PSEC as part of my overall portfolio)

    However you can have a higher yielding portfolio if you are willing to look beyond the conventional portfolio construction that Wall St. & the media sell 24/7 and with no more risk than owning the top 100 S&P stocks by market cap.
    Jun 19 09:57 AM | 12 Likes Like |Link to Comment
  • Chicago Bridge & Iron: Acquisition Accounting Shenanigans Dramatically Inflate Profitability - Prescience Point Initiates At Strong Sell [View article]
    "I'm Steve Reitmeister with Zacks Investment Research. We're releasing a free CBI analysis that forecasts where it's heading in 1-3 months."

    Every time I see that side bar ad on SA of that bald guy and that statement above I always laugh.
    Jun 18 12:55 PM | 2 Likes Like |Link to Comment
  • Food stamp usage down 3.6% from high [View news story]
    Well that sounds like it should get a Booyah right?

    I'm sorry, how many years has it been since the "recession" ended?

    Then again with 50% of the entire working age population earning $32K / year or less, how could one not say things are just rosy?

    Nothing to see here. Back to Facebook, Twitter, Instagram or whatever other things keeps 85% of the population in their zombie like state.
    Jun 18 11:58 AM | 6 Likes Like |Link to Comment
  • Chicago Bridge & Iron: Acquisition Accounting Shenanigans Dramatically Inflate Profitability - Prescience Point Initiates At Strong Sell [View article]
    cjay:
    I know. You and Arb are correct. And yes I agree with you about these long only guys that build positions then come on TV or elsewhere to pump the stocks up and sell into the strength.

    I guess I just feel for the little guy that really will just get trampled by this, though it may only be a short term thing.

    Arb is right when he wrote: "The authors did not have inside information; they merely presented a thesis based on their own work using public information that was available to anyone willing to put in the effort. The thesis may not even be correct, and one could choose to be stampeded by it or not."
    Jun 18 10:36 AM | Likes Like |Link to Comment
  • Chicago Bridge & Iron: Acquisition Accounting Shenanigans Dramatically Inflate Profitability - Prescience Point Initiates At Strong Sell [View article]
    I do not have a position in this stock. The analysis presented is quite thorough and it is clear that PP is not making something up just to kill the stock price.

    The only thing I do not like: clearly PP (or whoever within the company) built a short position before the article came out and is now profiting from the article. That should be illegal. It is a form of front running. Disclosures about being short or not.

    If they released the article then immediately upon its release, say even 2 hours later, decided to then short the stock, then clearly that would seem more acceptable.

    That is my only issue with their methods.
    Jun 18 09:32 AM | Likes Like |Link to Comment
  • The Rookie Retirement Portfolio: Am I Diversified? [View article]
    MBN:
    JGWright does have a point to some extent. It is nice to have core of stable utilities however their growth is very slow, limited and the regulatory environment is very unsettling.

    My picks in the Utility sector: BEP & NPIFF.
    NPIFF is great for IRA's however BEP is a LP. so there can be some tax reporting issues that have to be addressed.

    Stocks like ED, SO, D, etc. are fine. Just remember though, Wall St. salivates at the though of you owning what everyone and his brother already owns already.
    Jun 17 04:58 PM | Likes Like |Link to Comment
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