You obviously did not understand my comment. So don't brush over it. Apple has 418bln market cap which includes the 150bln cash position. My comment is as follows: since cash stripped out from NOPAT and ROIC, you must do the same for market caps. Apple will go down to 250bln in your chart after this adjustment. Your regressions are meaningless.
It is not just the scale issue. As I mentioned in my post below Apple's market cap consists of 1/3 of cash. That historically accumulated cash has nothing to do with current or future ROIC or NOPAT. All these market caps must be reduced first with respect to how much excess cash (cash not used for daily operations) these companies have. Apple will shift down drastically. It is already below the regression line in author's second chart. After the adjustment it will be much more below. Therefore if Apple will move towards the regression line it actually will increase in market cap. Basically author is cheating in two ways:
As you can see the denominator is shrunk by excess cash, which is huge for Apple's case, hence a high ROIC. This is OK as long as you do the same for the market cap in the first chart. Apple will move towards MA, ALTR.
2) Since NOPAT has nothing to do with the cash on balance sheet, Apple is also penalized in the second chart as well. Even then it is still amazingly below the regression line, which means author is very very wrong.
In both cases Apple is standing on a pedestal of cash. What will happen now that Apple is buying back its own stock is that the market cap will go lower even if the stock price stays the same because the number of shares is going down. This will bring Apple down automatically in those charts without any losses to investors. That's also why this analysis is complete BS.
I will tell you what's wrong with this chart. Apple has huge excess cash position. Since ROIC is adjusted for excess cash the market caps must also be adjusted for excess cash. Due to this adjustment, among all those companies in the chart Apple will shift along the market cap axis down the most. Then you will see that even though Apple's ROIC will go down in time it's position with respect to the regression line actually shows that it is undervalued not overvalued.
Tim Cook's Improbable Victory In Washington [View article]
Tim Cook's job is to serve the shareholders' interest. If this is the best way to navigate the tax law kudos to him. If regulators don't like it, they have to change the tax laws. Supreme court clearly stated that a corporation is entitled to pay the minimum tax stipulated by the law. As a shareholder I am paying Tim Cook to do whatever it takes within the framework of the legal system. Senators can take their show to somewhere else.
Good News: Stocks Will Be Cheap Forever [View article]
I started to think that long term mean of P/E might have shifted upwards. There is huge inflation in stock prices. With so much money printing, anticipating a stock market crash is like expecting the food prices to fall drastically, which we know will never happen. Theory of supply and demand dictates that in order for stocks to go down its substitute must go lower in price. Bonds are at all time high.
Apple: The iPad Faces Unprecedented Competition [View article]
Obviously you don't know the history. The first successful 3D cards for retail (there were some specialized very expensive stuff for CAD) in the market were the Voodoo and Voodoo-2 cards by 3dfx which were working as a pass-through to your 2D card. Whoever was playing games at that time will now this by heart because those cards were the only ones that worked and they were listed as the required hardware by the game vendors.
Basically you are confirming my point that somebody will do and everybody else will follow the suit. Laptop/tablet hybrids will be quite popular and will have a market share whether you like them or not.
Apple: The iPad Faces Unprecedented Competition [View article]
@Jeach!. I highly disagree. 15 years ago there was a similar discussion regarding to have separate 2D and 3D video cards in a system or not. Before that people were discussing whether FPU should be together with CPU or not. Recently Intel included the whole controller related stuff in the CPU packaging. As technology evolves the power they can fit into one thing becomes higher and cost effective at the same time.
The new ASUS Transformer Book (not ASUS transformer tablet) is a very interesting product in the right direction. It is a laptop and the screen detaches to be a fully functional tablet. So you detach the screen and take it with you on your vacation and when you come back plug it back in and use it as a laptop. Many will think that this is a good solution.
Next Gen Game Consoles: Winners And Losers [View article]
Frame Rate is not an academic discussion. Now that there is a transition to 3D, frame rates will be halved. Basically a 50fps for a 2D game will mean only 25fps for a 3D game as frame for each eye needs to be rendered separately. In order for it to be academic frame rate for each eye must go beyond undetectable levels with the maximum detailization.
This is a useless discussion. Tier-1 and Tier-2 capital by definition are on the right side of the balance sheet of a bank, hence represents a bank's liabilities to its shareholders and subdebt owners.
From the shareholder's perspective the bank as a whole is shareholder's asset.
Everybody seems to comprehend the idea of inflation in food prices, but not many seem to comprehend the stock price inflation. All these prices are nominal prices. Money printing press will eventually inflate prices all over albeit in different order and time frames. Just look at Zimbabwe stock market. It hit 40 million Zimbabwe dollars in 1 year before switching to USD quotations.
Comex Gold Default? Here's What Not To Watch [View article]
Fact#2 is false. Short position holders can bail out only if the exchange can find a long position holder to neutralize the position willingly. In the case of a catastrophic situation where the physical price is over the paper price all those long position holders will force the short position holders to deliver.
Comex Gold Default? Here's What Not To Watch [View article]
To be more precise I made some further research. It seems by registering your gold you are not loaning, but giving permission to bullion bank to sell it to somebody else. I thought bullion bank owned the gold. But apparently it is technically not the case, but almost acts as the owner of the gold. I am still trying to understand the relationship between the bullion bank and the warehouse though.
Comex Gold Default? Here's What Not To Watch [View article]
I am not sure if COMEX can default in general. They don't seem to have any obligations. They just match buyers and sellers and ensure that margins are maintained.
Short position holders can probably default in case of a systematic crises of physical gold, because they won't be able to deliver or will have to buy at a much higher price. In that case margins won't be enough to compensate the long position holder. Of course eyes will turn to COMEX and their reputation will go down the toilet. But I don't know if that's called a default.
Comex Gold Default? Here's What Not To Watch [View article]
I never said you should be a bank to store gold in the warehouse. I said registered gold belongs to the bullion bank, eligible gold belongs to clients, who may or may not be a bank.
The Truth Behind Apple's Numbers [View article]
The Truth Behind Apple's Numbers [View article]
1) ROIC = NOPAT / (Total Assets - Excess Cash - NonInterestBearing Liabilities)
As you can see the denominator is shrunk by excess cash, which is huge for Apple's case, hence a high ROIC. This is OK as long as you do the same for the market cap in the first chart. Apple will move towards MA, ALTR.
2) Since NOPAT has nothing to do with the cash on balance sheet, Apple is also penalized in the second chart as well. Even then it is still amazingly below the regression line, which means author is very very wrong.
In both cases Apple is standing on a pedestal of cash. What will happen now that Apple is buying back its own stock is that the market cap will go lower even if the stock price stays the same because the number of shares is going down. This will bring Apple down automatically in those charts without any losses to investors. That's also why this analysis is complete BS.
The Truth Behind Apple's Numbers [View article]
Tim Cook's Improbable Victory In Washington [View article]
Good News: Stocks Will Be Cheap Forever [View article]
Apple: The iPad Faces Unprecedented Competition [View article]
http://bit.ly/XPqAIo
Basically you are confirming my point that somebody will do and everybody else will follow the suit. Laptop/tablet hybrids will be quite popular and will have a market share whether you like them or not.
Apple: The iPad Faces Unprecedented Competition [View article]
The new ASUS Transformer Book (not ASUS transformer tablet) is a very interesting product in the right direction. It is a laptop and the screen detaches to be a fully functional tablet. So you detach the screen and take it with you on your vacation and when you come back plug it back in and use it as a laptop. Many will think that this is a good solution.
Next Gen Game Consoles: Winners And Losers [View article]
Short Gold For The Long Haul [View article]
From the shareholder's perspective the bank as a whole is shareholder's asset.
Short Gold For The Long Haul [View article]
Why do you think gold is good for: aging population, QE, stagnating economies, limited resources?
I don't see any relation whatsoever. If you want to keep something against aging population, buy botox, not gold.
New S&P 500 Price Target: 2001 [View article]
Comex Gold Default? Here's What Not To Watch [View article]
Comex Gold Default? Here's What Not To Watch [View article]
Comex Gold Default? Here's What Not To Watch [View article]
Short position holders can probably default in case of a systematic crises of physical gold, because they won't be able to deliver or will have to buy at a much higher price. In that case margins won't be enough to compensate the long position holder. Of course eyes will turn to COMEX and their reputation will go down the toilet. But I don't know if that's called a default.
Comex Gold Default? Here's What Not To Watch [View article]
Here is my reference:
http://bit.ly/YjoLak
under section:
What is in the Warehouses?