Seeking Alpha

Marc Gerstein

 
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  • Forget The Value Angle, Apple Is A Pure Growth Play [View article]
    It's been a long thread and I'm focusing on other projects now, but the last two comments by Sacto_Joe and starwitchdoctor quite effectively sum up what i think are the key takeaways.

    Nobody knows what will happen to Apple's margins going forward because that's in the future and the future can't be predicted nearly as well as people like to think. But both comments illustrate two different ways two different readers have alerted themselves to the key questions (as have others in this thread). That's really what investment analysis is about -- identifying potential make-of-break questions. Margin is one of them.

    As to another one, off the topic of this and the prior article, is the absence of Jobs. I'm five chapters into Issacson's bio and i can see this is shaping up as one heck of a read. It's apparent that even pre-Apple, it's clear that Jobs is not just another tekkie, entrepreneur, innovator, etc. He's unique even in the context of this small subset of creative minds and is, one might say, a one in a gazillion sort of person. That means that the worlds of leadership, politics, business, etc. may provide little or no precedent for assessing the potential impact of such a person no longer being on the scene. Hence we have another, potentially much bigger, presently-unanswerable question Apple investors will need to think about going forward. I'm sure my thoughts will evolve as i continue with the book. If, by then, SA hasn't already been saturated with articles on this topic, I may tackle it later on.
    Feb 2, 2012. 11:05 AM | Likes Like |Link to Comment
  • Forget The Value Angle, Apple Is A Pure Growth Play [View article]
    "the many comments where you have refused to give even an inch on an argument caused me to want to hear you admit once that you were wrong."

    Once? Like i said, I'd be thrilled to have a really hot streak and keep the wrong percentage at 35%.

    Actually, relative to other investment commentators, I'm typically much more candid about what I don't know, and several idiots here made snide remarks about the number of occasions in this article when I said something like "I have no idea." the most entertaining of which U ran on Reuters a while back about the "ask Marty" method of estimating earnings. (An investor relations VP, named Martin Xxx, at an oddball hard to pin down company called analysts on behalf of a new CFO who asked him to get copies of analyst earnings models. My answer: "Marty, my model is I ask you. What the heck did the other analysts give you?" His answer: "They just laughed." (Reg FD made life much more boring.)

    That said, I try to be as thoughtful and sensible as possible I when I do make an assumption instead of talking out of my a** as many do and am therefore less likely to give ground except to judgment handed down by Father Time.

    "But if I crossed a line and was being childish, then I owe you an apology. I still disagree with most of what you have written about Apple, but that does not mean I was trying to be a jerk about it. "

    So noted, and appreciated.
    Feb 1, 2012. 02:01 PM | Likes Like |Link to Comment
  • Mr. Market Is Not Undervaluing Apple [View article]
    A stock with an extremely high measure in a major valuation metric is not undervalued; that really isn't rocket science. Saying apple is not a value stock does not mean Apple is a bad stock, and my subsequent article discussed those issues.
    Jan 31, 2012. 11:43 PM | Likes Like |Link to Comment
  • Forget The Value Angle, Apple Is A Pure Growth Play [View article]
    "But that doesn't make the call any less wrong."

    Do you own or care about any stocks other than Apple? I ask b/c this is a remarkably childish market attitude.

    Being wrong happens to everybody all the time. On the whole, most market participants tend to be about 50-50, sometimes up to around 60-40 or down to around 40-60; rarely more extreme than 65-35 or 35-65, but usually it's about 50-50. The money is made not so much by being right but from positioning one's self to benefit from the lopsided probability distribution of outcomes. In a long position, minus 100% is the absolute worst thing that can happen; most of the stubborn investors are out by minus 70% and most bail by minus 50%. But it's not a mirror image on the upside. One can go way way way more than plus 100% and many do on many stocks. Good analysis aims to increase the potential for upside extremes.

    I've had some nice hits with Apple and some misses. I've had some nice hits with tons of other stocks, and some misses. That's life in the market. The goal is to have the impact of the hits exceed the impact of the misses (and if you can beat the 50-50 by a bit, that, too, is worth shooting for).

    If you want to ever be taken seriously or treated with respect by anyone with an IQ above 3, never, never, never, never, never publicly post anything like your last.
    Jan 31, 2012. 11:34 PM | Likes Like |Link to Comment
  • Forget The Value Angle, Apple Is A Pure Growth Play [View article]
    "I know a great deal of detail about weaknesses -- security and otherwise -- in the several platforms but I am finished with offering any comments on it."

    Quite understandable; unfortunate, but understandable.

    "I would just close by noting that, to me, the reaction of someone to whom you point out a flaw in an Apple design these days is strikingly similar to the reaction I could get by trying to point out an advantage of a Mac vs. Windows a decade or so ago. We just didn't call them Windows fanboys. "

    Interesting. I think you nailed it at the beginning of your comment; its about a movement, not a stock.
    Jan 31, 2012. 09:36 AM | Likes Like |Link to Comment
  • Forget The Value Angle, Apple Is A Pure Growth Play [View article]
    "It has climbed 30% in the 7 months since then, and Apple's margins"

    Quiz - Can you guess why I don't care about not having been in AAPL during that particular move? (This is not a trick or flippant question; any capable investor should be able to easily answer it.)
    Jan 31, 2012. 09:31 AM | Likes Like |Link to Comment
  • Forget The Value Angle, Apple Is A Pure Growth Play [View article]
    Hard to say; it depends on where the margins on the lesser tiers wind up, and the mix among them (what % of sales does each tier contribute). The margins become known pretty quickly, although it's not known how much, if anything, the company will publicly disclose. But the mix issue is one that does often pop up among companies in such situations and produces genuinely surprising quarters; up and down.
    Jan 31, 2012. 09:27 AM | Likes Like |Link to Comment
  • Forget The Value Angle, Apple Is A Pure Growth Play [View article]
    "And you think that just because your name rimes with Einstein are you some sort of a genius analyst?"

    My name does not rhyme with Einstein . . . in my case, the ein is pronounce een. So your completely unnecessary attempt to be nasty falls flat and makes you look like exactly what you are.

    Too bad . . . other parts of your comment looked to have some things worth discussing, but I'm not going to waste my time with the likes of you.
    Jan 29, 2012. 09:45 AM | Likes Like |Link to Comment
  • Forget The Value Angle, Apple Is A Pure Growth Play [View article]
    Did I question the elegance of AAPL hardware or the rationale for a premium price? Quite the opposite. It just goes to show how obtuse that guy, the one you understood perfectly, must actually have been if anything he said led you to believe otherwise.

    You know what's really bizarre . . . the article is not at all bearish on Apple. I reject the notion of value, but conclude that it is actually a good growth investment. I think I'm going to have to come up with another article recommending selling Apple short. I certainly would not do it, and my author disclosure would make that clear. But I'd have a lot of fun watching the whackos bleat over that.

    I often joked in the past that I should submit an article with a title of just: "iPad," and a body filled with random characters; and then watch as half the crazies post comments in support while the other half tell me I'm wrong. Perhaps I was wrong to treat it as a joke. I probably should have done it. Maybe I will! Heck, it's easy to peruse this thread and pretty much predict who'd post what.
    :-)
    Jan 27, 2012. 10:55 PM | Likes Like |Link to Comment
  • Forget The Value Angle, Apple Is A Pure Growth Play [View article]
    If I could have found a way to log into an existing account, I would have, and i looked for it, as did others i know. If it's there somewhere, then I guess we owe kudos to Apple's clarity and usability.
    Jan 27, 2012. 10:51 PM | Likes Like |Link to Comment
  • Forget The Value Angle, Apple Is A Pure Growth Play [View article]
    "You are really quite an asshole . . . "

    Again, I rest my case. That fact that something so trivial can generate such rage . . . what more need be said.

    I've discussed the fanboy issues elsewhere in this thread and have no inclination to repeat. All I can suggest is anger management.

    Have a good day.
    Jan 27, 2012. 08:43 PM | Likes Like |Link to Comment
  • Forget The Value Angle, Apple Is A Pure Growth Play [View article]
    "f you get in the "how do we know anything" category then you could also say there is no such thing as a fanboy because maybe the guy who is worshiping Steve Jobs is really Bill Gates having a lark at his computer."

    Yes, that's why I don't take this stuff so seriously.

    If i want to discern sentiment re: a stock, I'll look at the chart patterns volume trends, short interest, insider data, institutional data, valuation metrics (great as barometers of sentiment), or for human feedback, I'll have direct conversations with people I actually know whose views I respect, etc.

    Message boards are not something I consider as an indicator of how people feel about a stock, a possible exception being the Motley Fool Stars system, where people record their recommendations to be tracked by Motley Fool, which computes a weighted score based on community sentiment but with member weighted based on their demonstrated stock-picking proficiency. But even that ranks low on the list of things i consider, but it beats SA boards, Yahoo boards, etc. which are not representative of anything real.

    "Sure it's possible that the guy raging about how crapple only sells to fanboys and will go bankrupt by next year is really Tim Cook's butler, but it is about as like as SexyTina being either sexy or named Tina. "

    If you want to play probabilities on this sort of thing, my guess (and it is, of course, a guess, is that people in discussions on more mundane stocks are more likely to be for real because there really is no incentive for cranks to go there.

    But the hotter the topic, the more room there is for a whacko to get his/her jollies before a large audience, suggesting a greater probability of questionable commenters. I think AAPL is very high probability in this regard as would be, say NFLX, SIRI, AMZN, possibly GOOG, RIMM a bit, Gold, Chinese stocks, and to a little extent, anything Buffett related. I'm sure the list is not complete. Things can get a bit controversial in the income investing area, especially when, as has happened a lot lately, somebody asserts, essentially, that dividends are bad. But I suspect that the people, as much as I may disagree with them, are more likely for real because the arguments tend to be more theoretical and I don't see the kooks finding that to be all that much fun.
    Jan 27, 2012. 07:30 PM | Likes Like |Link to Comment
  • Forget The Value Angle, Apple Is A Pure Growth Play [View article]
    "it doesn't take an "us against the world" attitude to identify that there are a number of folks who seem very angry that Apple won't curl up and die already. "

    A number? What number? Enough to make for a pimple on an elephant's butt? Again, this is an internet message board. How do you know those so-called bears are bearish? How do you know the first person to use the world fanboy didn't have 65% of his/her assets in AAPL stock?

    Recently, a commenter appeared (I forget which stock the article was about) with the user name "SexyTina"accompanied by a very cute (no, not pornographic) photo. You should have seenother comneters salivating . . . until I reminded them that we had no way of known if SexyTina was who they thought, or a fifty-something guy living in his mother's basement. We never found out because that account vanished shortly thereafter. :-) Anyway, don't over think any of this stuff. Nobody knows who anybody is, who is for real, or who is just having fun jerking people around.

    As to genuine forecasts that didn't pan out, what's so special about that? There's a buyer and seller (different goals, different assumptions, etc.) on every trade on every stock. Do you think you;d be able to get Apple anywhere near $400 if everybody was bullish? The price would soar to infinity. How nice would it be to take profits at that time, but don't count on it because once everybody clicks on "Sell," the price goes immediately to zero. Difference of opinion is what makes the market work, for AAPL, for everything.
    Jan 27, 2012. 06:35 PM | Likes Like |Link to Comment
  • Forget The Value Angle, Apple Is A Pure Growth Play [View article]
    "It is not an objective label but one ridden with an emotional overtone."

    And i think those who react emotionally would be better off looking into themselves to figure out why.

    "Personally, I'm over the fanboy label. It used to offend me until I realized that most people who use it still harbor a resentment about how successful Apple investors have become. Not you, of course. If the resentful label doesn't apply, feel free to reject it. "

    Why would I resent it? There are many ways to succeed in the market and those who resent some of those ways have problems they should address. And i suspect far fewer others, if any, resent the gains in AAPL -- I think we're dealing with more of a concocted us-against-the-world mentality on the part of many of those who post on SA on Seeking Alpha. If that feels good . . . enjoy. you might enjoy that behavioral finance book I suggested above.

    Try not to get carried away by all this. It's just an internet message board filled with anonymous rants, as so many are. Have fun with it, but it's not the real world. Remember, we have no idea who most of these people (even you) are. For all we know, some of the most vigorous Apple supporters here could be con artists trying to talk the stock up in preparation for a short position. Others could be Apple employees. Detractors could likewise be goofing and holding AAPL up the whazoo. Remember, a lot of SA trafffic comes from links on Yahoo Finance, the the growth of that relationship seems to have coincided with the growth of the number of rants on the message boards. So in a sense, SA may be becoming heir to the infamous Yahoo Finance Message Board zoo. Absent real names and verification, NOTHING in this or any other comment thread can be considered real. So don;t try to assume anything you see here, pro or con, says anything meaningful about the AAPL shareholder base, or about those who aren't part of that group.
    Jan 27, 2012. 05:54 PM | Likes Like |Link to Comment
  • Forget The Value Angle, Apple Is A Pure Growth Play [View article]
    Not at all.
    Jan 27, 2012. 05:47 PM | Likes Like |Link to Comment
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