Seeking Alpha

Market Scholar

 
View as an RSS Feed
View Market Scholar's Comments BY TICKER:
Latest  |  Highest rated
  • Apple Still Offers Nothing Bullish [View article]
    I never stated that its low PE by itself is a signal or that any stock that shows a new low PE will proceed to an extended decline, I said its not a reason to necessarily be bullish as many believe

    Accordingly, I dont think your fallacy applies, but it sure does sound nice..

    As well, I would suggest your comment that " Shorts are being set up with a classic pump and dump. The big guys are getting an incredible amplification of their efforts due to the appeal of the wonderful games of "ain't it awful and "that's nothin' " and the love of tearing down anyone successful" is just a way of justifying a weak position. If it's such a classic, obvious phenomenon, than surely you and most are short? There is nothing restricting anyone from partaking in the "pump and dump" if it indeed were true
    Jun 27, 2013. 04:26 PM | Likes Like |Link to Comment
  • Apple Still Offers Nothing Bullish [View article]
    Well all that I can say is that return is the only thing that ultimately matters, not value. Value is naturally subjective and one can measure value in a number of ways. But return is ultimately what most investors want. While I understand the need for income, most modern investing and portfolio management suggest analyzing an investment in terms of total return rather than income/yield.

    Perhaps there's a very bullish fundamental reason to own Apple; I'll leave that up to the wall street analysts. But Apple continues to decline on both an absolute and relative basis. Relative strength and momentum are one of the few market anomalies accepted by both technical and fundamental analysts, and Apple continues to be a large underperformer.

    I guess the question is, if its such a great longer term value play, why do all the institutions, funds, etc continue to dump it?

    As institutional ownership peaked when the stock also peaked, perhaps the best idea is to wait for some sort of bottom or increase in institutional ownership prior to getting long. Ultimately institutions move big stocks, and until Applet gets support from them, it could very easily continue to decline. The nominal dividend will do little to offset futures stock declines as those who have been holdings Apple since 2012 can attest to
    Jun 27, 2013. 12:27 PM | Likes Like |Link to Comment
  • Apple Still Offers Nothing Bullish [View article]
    I agree with you. This works in the short term, and this is how companies grow and generate abnormal profits for a finitie period. However when other companies see these high margins and profits they enter that market and ultimately drive down margins. Unless a company can gain a monopoly position the high margins are ultimately reduced. Further, there is a limit to the economies of scale that a company can achieve through expansion
    Jun 27, 2013. 09:13 AM | Likes Like |Link to Comment
  • Apple Still Offers Nothing Bullish [View article]
    "The funny thing is, the longer the stock price stays depressed now, the more value this generates for long-term shareholder as the company is able to take more shares off the market through their massive buckback program (the largest history) than they would if the price was higher"

    As a stockholder I would find much more value in a stock that appreciated rather than one that stays depressed
    Jun 27, 2013. 09:07 AM | Likes Like |Link to Comment
  • Apple Still Offers Nothing Bullish [View article]
    Simply providing perspective, nothing sarcastic.

    I feel strongly that Apple is far from the best long candidate right now, and that's the point. There's sufficient evidence for my stance, and I have encountered the most well articulated and thorough analysis all the while the stock continues to move down. I am simply trying to illustrate what matters.

    There are many better shorts candidates at the current juncture; why force myself to have a position in Apple? It is a massive mistake to think you must always have a position in Apple or any stock. Often the best position is no position
    Jun 27, 2013. 09:04 AM | Likes Like |Link to Comment
  • Apple Still Offers Nothing Bullish [View article]
    Glad you liked it. I am not suggesting the P/E is useless, but simply that a low P/E isn't necessarily bullish and often it can be bearish. Many people's bullish arguments are based off of its low PE without thorough consideration of what it actually can imply about the future
    Jun 26, 2013. 09:15 PM | Likes Like |Link to Comment
  • Apple Still Offers Nothing Bullish [View article]
    "Firstly,of course it is easier for a large company like Apple to maintain high gross and high net margins than a small company-that is standard." Really? That seems to defy most economic theory
    Jun 26, 2013. 09:12 PM | Likes Like |Link to Comment
  • Apple Still Offers Nothing Bullish [View article]
    Not much of a "vision" when the stock's down almost 40% from highs when the rest of the market is up. More like a harsh reality that you should begin to consider
    Jun 26, 2013. 09:08 PM | Likes Like |Link to Comment
  • Apple Still Offers Nothing Bullish [View article]
    Sorry, perhaps it is not correct to say that Apple lacks innovation. But there certainly has been a decrease in innovation compared to past years.

    Further, even if a new innovative product were to be released the effect on Apple's bottom line gets smaller and smaller as the company grows. It needs innovation just to maintain growth previously achieved
    Jun 26, 2013. 11:46 AM | Likes Like |Link to Comment
  • Apple Still Offers Nothing Bullish [View article]
    Thank you for clarifying this
    Jun 26, 2013. 11:42 AM | Likes Like |Link to Comment
  • Apple Still Offers Nothing Bullish [View article]
    I am not suggesting that just because Apple's PE is low it's a short, but that it could be something to consider among other things. Growth rates are decreasing, and eventually could go negative. Apple surely would not be the first tech mega cap that this happened to.

    Technically the chart is horrible, and many people have been burned in Apple. Are people going to be as enthusiastic about buying Apple as they were in the past? My guess is no, despite how strong the company may perform.

    Anyways, I am not stating that it will definitively go either way. But, that many people have clung to a low P/E as a reason to be bullish which I believe to be faulty reasoning
    Jun 26, 2013. 12:42 AM | Likes Like |Link to Comment
  • Apple Still Offers Nothing Bullish [View article]
    As well, to be honest, the fundamentals I learned during my Master's are probably at the bottom of my list of things I actually apply in trading/investing.

    I've been trading since 2008 which isn't a long time, but it is a good start. My whole focus since 2008 has been on learning what actually drives security prices. Most of what is taught in formal education isn't that useful, and market experience as well as books such as Minervini's are much more useful in my opinion.
    Jun 26, 2013. 12:36 AM | Likes Like |Link to Comment
  • Apple Still Offers Nothing Bullish [View article]
    I don't think I mentioned puts, but yes, they are one way of protecting you from further losses. But they could also lead to losses; you're probably best seeking further financial advise.. I wouldn't recommend getting involved in derivatives unless you really understood them and the risks involved.
    Jun 26, 2013. 12:29 AM | Likes Like |Link to Comment
  • Apple Still Offers Nothing Bullish [View article]
    Further, the ipad for example was new AND innovative. A streaming radio service is more of a reason to be bearish than bullish in my opinion. Now Apple is following rather than innovating, that marks a drastic change from the Apple of the last decade.

    Yes you're right, they will obviously have new products, but I was implying new and significant. It doesn't appear like the next Ipod, Ipad, Iphone-like innovative product is expected anytime soon
    Jun 26, 2013. 12:25 AM | Likes Like |Link to Comment
  • Apple Still Offers Nothing Bullish [View article]
    Right, and the stock benefited from that. That trend seems to be ending which is not surprising as it was unsustainable. Growth is slowing, the company is massive, and now lacks innovation.

    I am not trying to oversimplify things, but WHY the numbers are coming down is not nearly as relevant as the fact that they ARE coming down in my opinion.
    Jun 26, 2013. 12:20 AM | Likes Like |Link to Comment
COMMENTS STATS
337 Comments
249 Likes