Marc Gerstein

Apple Overvalued? Here's What Else You Can Get for the Price

It wasn't faint praise. I can see from other articles and your web site that you really do know valuation. Hence my reaction to this article. And sorry . . . who the heck are you anyway . . . are you Harry Schacht from Schacht Value Investors? . . .this one and the AMZN just don't cut it. If you think AAPL is less worthy than, say KO and BA, then share with readers the relevant KO, BA and AAPL metrics that put the market caps into proper context. If you insist on dropping Buffett's name (not sure why . . . you can't turn a bad article into a good one simply by typing the word "Buffett"), then do as you say he'd do. Give readers a sense of the owners earnings generated by AAPL and the packages of alternatives so they can properly evaluate the relationships between the benefit of owning the businesses and what one would have to pay to own the businesses.

> <img class="authors_reply" src="static.seekingalp...
>
>
> Wow, Marc... sorry to get you so worked up. Another reader had the
> same objection, but didn't try to be coy about me trying to perpetrate
> a joke. He also refrained from damning me with faint praise. I
> do know how to value companies.
>
> The analysis in the article is sound... and if you had read the rest
> of the comments you would have seen that your objection was asked
> and answered.
>
> Nonetheless, I'll repeat:
>
> "Your objections to my "flawed" argument actually don't make any
> sense. The question is: If you could buy all of Apple OR one of the
> alternatives, which is better. As the sole owner, you would have
> access to all the cash and cash flow. Buffett looks at companies
> this way. He refers to it as "owners earnings". He realizes that
> he is only buying a proportionate piece of the business but the analysis
> is the same.
>
> $175 billion would buy you any of the equivalents shown above. For
> smaller dollar amounts, just start dividing. The question is: which
> side of the value scale is heavier.
>
> Rational minds can disagree, but the analysis is clear."
>
> If you think Apple is a better buy at $175 billion vs the alternatives
> (all of which have the same market value), then by all means buy
> Apple. Clearly you must compare the underlying fundamentals of the
> 2 sides of the equation to see which has more weight.
>
> I personally think that any of the "alternatives" is a better buy
> (and more sustainable) than Apple.
>
> This is a very serious article that was fun to write. If you didn't
> see the logic, I'm sorry, but it is there if you think about the
> point being made.
>
> Boiling blood? A rather strong reaction. Thou shalt not question
> Apple's valuation? Come on.
>
> On Dec 10 08:13 PM Marc Gerstein wrote:

Apple Overvalued? Here's What Else You Can Get for the Price

Wow . . . this is bizarre (ditto your AMZN piece). What's even stranger is that judging by some of your other Seeking Alpha articles (quite good actually!) and your Schacht firm web site, it seems you know quite well how to value a stock. Why, then, are you posting articles like this?

I can appreciate a tongue-in-cheek gimmick as well as anyone, but it appears from some of the comments here and for the AMZN piece that some readers are taking you seriously. And frankly, the idea that there may be readers here who don't understand that this is a joke scares me.

To those who actually think this is a legitimate way to think about value, I suggest you go here: schachtvalue.com/v....

This is part of the author's firm's web site, where he presents a much more substantial introduction to the fascinating and often complex topic of value. There, you can get a sense of how a firm's market cap cannot be judged merely based on how big it is relative to those of other firms, but relative to key business performance metrics. You won;t chuckle or laugh when you read that stuff, but it may prompt you to think about value the way the author seems to do for his paying clients.

I'm sorry if I'm coming on a bit strong, but something about this article is really making my blood boil. Perhaps it's the snide reference to Jim Cramer. Many bash him for exalting entertainment over substance. Yet that is EXACTLY what this article (and the AMZN posting) is doing!

Nokia Enters the Already Crowded Netbook Market: Pros and Cons

"Nokia has a price tag of approximately $300 for its net-book."

Wrong!

Nokia has a price tag of approximately $600 for its net-book, which is way overpriced.

Who in their right mind would take the $300 version which requires a $60-a-month plan with AT&T? Most people are already paying somebody somewhere for internet access and wouldn't even consider giving AT&T $60 a month.

This sort of nonsense is an example of what happens when corporations pay more attention to their own "biz dev" (business development) group rather than to their customers.

And by the way, who wants Windows 7, another Microsoft operating system of the future. One of the benefits of netbooks is that you can get them with XP, which we know works even on normal amounts of memory.

Will Cheaper Laptops Snuff Out Netbooks?

Netbooks aren't necessarily about being cheap. They're about being small. I have a 10.1" Lenovo with a 160 GB hard drive and 2 GB of memory and a long-life battery for which I paid $400. Using my external CD drive to load software, it can do everything, and I mean EVERYTHING my full-feature laptop can do and just as quickly. And it's highly portable. I even did a few hours of work in a coach airline seat even though the person in front of me reclined all the way back.

I've heard the new generation of big laptops described as "desktop replacements" and they are; that's my main work computer. Going further, the new generation of netbooks (the ones that can do everything, not just surf the net) are "laptop replacements" taking over the portability function forfeited by the desktop replacements.