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Kofi Bofah  

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  • Memo To Tim Cook: Do Not Split Apple Stock [View article]
    I didn't mean to offend anybody.

    A smaller investor can have $1,200 and know that - his $1,200 is still the same, whether he buys 2 shares of AAPL at $600, or 20 shares of AAPL at $60 (after a split).

    I do wish that everybody could participate in financial markets. But, I want them to know what they are doing - so they don't lose their shirt - and abandon stocks forever. Nobody wins if people assume that a $600 Apple stock is wildly more "expensive" than Amazon at $230.
    May 1, 2012. 03:56 PM | 4 Likes Like |Link to Comment
  • Memo To Tim Cook: Do Not Split Apple Stock [View article]
    You are right on that. And sometimes, I think that a 10-year old could wipe the floor with a lot of professionals. But, I just think that in the context of an Apple split, people are bargaining that it will attract smaller, retail investors.

    And I think that, no matter how much money you have, an investor should know that lower stock prices does not always mean "cheap."

    If Apple splits and people rush to buy it - because it is now "cheap," then what will happen to the shareholder base? The shareholder base will be less informed as a whole. And that to me, means that there will be more volatility.
    May 1, 2012. 03:50 PM | Likes Like |Link to Comment
  • Memo To Tim Cook: Do Not Split Apple Stock [View article]
    We will see.

    AAPL is a good company - and I am sure that they will make the right decision.

    But, what about BRK.A?

    Or maybe, BRK.A, is just a once-in-a-lifetime phenomenon that will never happen again?

    BRK.A, of course, had a phenomenal run, before Buffett offered up B shares - to prevent mutual funds from simply sitting up there and buying A shares and effectively distributing them to their investors.

    I must note that BRK.B immediately spiked after its 50-for-1 split, but then after the smoke cleared, it went back to moving in lockstep with BRK.A.
    May 1, 2012. 03:46 PM | Likes Like |Link to Comment
  • Memo To Tim Cook: Do Not Split Apple Stock [View article]
    It is bad - if you are a long-term investor. What if you are a retiree - and a stock tanks in a panic - right before you are to cash out?

    If you are a short-term trader - then volatility is a good thing.

    Whatever floats your boat.

    But, a lot of people have argued that AAPL should split - so that people can buy into a "cheap" stock.

    I mean, if those people think that a stock is "cheap" after it splits - they are likely to wreak all types of havoc. Let's say AAPL misses earnings - and the price falls. I think we can both assume - that those same people that got in after the split, will be scared stiff, sell the farm, and cause even more of a drop.

    AAPL is also about to pay a dividend - so the income mutual funds will also join the party. Fund managers may be forced to sell - when their investors want to redeem at the bottom.
    May 1, 2012. 03:39 PM | 1 Like Like |Link to Comment
  • Analyzing Proposals To Spend Apple's Cash [View article]
    Ha! Regardless of valuations, we both know that - that would be a Department of Justice anti-trust case waiting to happen.

    AAPL could really be some type of Berkshire Hathaway type of vehicle - if they were to start making SMART acquisitions.

    Imagine That.
    May 1, 2012. 03:06 PM | Likes Like |Link to Comment
  • Analyzing Proposals To Spend Apple's Cash [View article]
    The problem - with that last paragraph, I admit, is that I either had to make assumptions that will never happen in "real" life, or I would have had to speculate on all types of growth rates. And I hope that I did not confuse my own self with my calculations. If I made a mistake, I am sorry.

    Right now, AAPL has $110 in cash and investments. That means to me, that they do not necessarily need to increase earnings to finance any buybacks. If they buy back stock, they will reduce shares outstanding. They will then have the same amount of earnings - over top fewer shares, which translates into higher EPS.

    Of course, in "real" life, APPL will be growing earnings, at the same time that it is buying back shares. So, my simple model that assumes no earnings growth may have overestimated a $5 increase in EPS, but I think that everything will shake out favorably, if we assume that AAPL will grow earnings and spend a net $10 billion (over the amount it spends to buy back shares from executive stock options) to buy shares that I think are undervalued.
    May 1, 2012. 03:03 PM | Likes Like |Link to Comment
  • Analyzing Proposals To Spend Apple's Cash [View article]
    Maybe I made a false assumption - and only time will tell.

    When I read through AAPL's reports, the lines "effect of dilutive securities" and "share based compensation" expense always seem relatively small. The latest quarterly report shows $844 million in share-based compensation expense over the last six months.

    I wanted to be conservative, yet hopeful that AAPL would buy back stock - above simply taking back new shares that it issued to executives. I am hopeful that AAPL cash flow from operations will increase over the years - and that it can effectively net $10 billion worth in buy backs.

    Another thing about buy backs that we all must note - is that these corporations are under no obligation to follow through. A corporation will cancel its buy back proposal - if profits fall. But, I am thinking that Apple will increase its buy backs, as its profitability improves, once it starts down this road.

    I just hope that AAPL does not go overboard and start loading up on its own shares at the top of the market - years from now. Historically, I admit, this is what always happens. Look at Exxon. Exxon always goes nuts with the share buy backs at market tops.

    Yes, I have been long Exxon for several years.
    May 1, 2012. 02:37 PM | Likes Like |Link to Comment
  • Analyzing Proposals To Spend Apple's Cash [View article]
    I have no idea. And I don't know when the backlash will swing from Microsoft to Wal-Mart to Exxon to Big Banks, and finally to Apple.

    This whole "Greed" protest movement has been very confusing to me.

    Apple's margins are obscene - compared to all of America's other corporate Boogie Men. I guess we really don't care, because we just love our iPads. Maybe the public is not outraged - because AAPL sells discretionary items.
    May 1, 2012. 01:28 PM | Likes Like |Link to Comment
  • Analyzing Proposals To Spend Apple's Cash [View article]
    I am saying that as a long-term investor, I would rather they NOT pay a dividend. I would rather they reinvest the money back into the corporation, and then, when the time is right, I can cash out with more capital gains (I hope).

    If you are a short-term trader - then you will welcome the volatility. (I am assuming there will be more volatility - when institutional income mutual funds get involved). If you are a retiree - you would also prefer to take the dividend income.

    Whatever floats your boat.

    AAPL is probably looking to strike a balance - for a diverse mix of shareholders. And I think that they are doing a great job.

    I just hope that they do not make a silly acquisition. Buying patents is o.k., but I will shake my head - if they were to blow $50 billion in cash to buy some flailing corporation. But, that's the risk that we all take - when a business is wildly successful. We just have to trust management to do their jobs.
    May 1, 2012. 01:23 PM | Likes Like |Link to Comment
  • Apple Share Price Target: $815 [View article]
    Today, there was that Microsoft investment into Nook. So, this will only heat up competition between iPad and Kindle. AAPL investors may have gotten scared off and decided to take profits.

    I think that investors should be patient.

    Recognize, that it may take several years for any investment to pay off. If you feel that AAPL is a good business - then you should hold it. If the fundamentals - still look good - it is only a matter of time before the share price catches up. Please understand that a lot of investments can remain buried beneath intrinsic value for years upon years upon years. The stock market is like a bi-polar woman. In the short term, there will be things that she does, which make NO SENSE. But, rest assured, the Truth will come out, eventually.

    And maybe, I am just a weirdo.

    I actually like it when my investments sit there and do nothing for a while - so I have more time to LOAD up.
    Apr 30, 2012. 02:25 PM | 4 Likes Like |Link to Comment
  • Apple Share Price Target: $815 [View article]
    Yes, higher interest rates are good for cash and short term securities, like one-month CDs and money market funds.

    But, let's say you bought and own a 30-year bond that pays out a measly 3-percent rate. You will be effectively locked into this thing for 30 years. And let's say interest rates rise, so that two years from now, 30-year bonds are issued that pay out 7-percent. At that point, you would lose significant value on your investment. You could keep it - and be happy with 3-percent interest - or you could sell it off at a loss. (Nobody wants a 30-year bond at 3-percent - when they can get new 30-year bonds at 7-percent. You will be forced to sell your old bond at a discount).

    I am not implying that these things will happen. But, I wanted to write an article that was as conservative as possible. If AAPL were to put cash into a lot of long-dated bonds, they would be forced to write off losses, if interest rates were to spike.

    Right now, AAPL has a lot of long-dated credit securities on its balance sheet. I think that, with interest rates at zero, it would be best for AAPL to keep most of its cash in money market investments that will pay out more income, as interest rates rise.

    I know that The Fed has come out and spoke of possible QE3. But, I think that it will be inevitable for rates to rise at some point.
    Apr 30, 2012. 12:54 PM | Likes Like |Link to Comment
  • Apple Share Price Target: $815 [View article]
    It could be profit taking. It could be anything. In the short-term, financial markets are very irrational. Personally, I look at the world as one big monopoly board. What businesses do I want to be in? Every time somebody "lands" on my property - I am going to get paid in some way (dividends / capital gains). To me, whatever price action happens in the short-term is no big deal. I am prepared to hold for decades.
    Apr 30, 2012. 12:37 PM | Likes Like |Link to Comment
  • Apple iPanel TV Release: Put Up Or Shut Up [View article]
    Yawn. I don't believe in shorting stocks - or rapid-fire trading, for that matter. In the short term, I feel that the market is very irrational, so I don't think that it is prudent to take those types of risks. If I don't like a stock - I just avoid it.

    I wouldn't even describe my investment philosophy as buy and hold.

    I am thinking more like, buy and die (keep solid blue chips and pass them on to the next generation). Certainly, you will discover that I am not a short-term trader type, as you have already read through the 1,000+ articles that I have posted online.

    I am flattered by your link.

    Have a Nice Day.
    Apr 27, 2012. 07:04 PM | Likes Like |Link to Comment
  • Apple iPanel TV Release: Put Up Or Shut Up [View article]
    You all can think that I am the biggest imbecile alive.

    And if I am, then I will just have to work hard and improve.

    Then, hopefully next year, I will be the second biggest imbecile alive.

    I am 31, so maybe by the time I am done, I will have bettered myself just a tad. I hope that I can get a few things right, here and there.

    You guys have a Nice Day.
    Apr 27, 2012. 05:28 PM | Likes Like |Link to Comment
  • Pandora: Opening Up A Box Full Of Losses [View article]

    I definitely Thank You for your support.
    Apr 27, 2012. 05:20 PM | Likes Like |Link to Comment