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  • Could Apple Be Working On The 'iBank'? [View article]
    Sounds like PayPal has beaten Apple to the mark by a distance in creating a payment system fueled by access to one's credit card information.
    Feb 13, 2013. 07:37 PM | Likes Like |Link to Comment
  • Why Apple Is Still A Buy Despite Its New Industry Classification [View article]
    There have been rumors over the past few months that the Pope’s health has been failing and that he was struggling to read texts.

    Maybe this will be the turning point for an iPhone with a larger screen.
    Feb 11, 2013. 07:52 AM | Likes Like |Link to Comment
  • Why Apple Is Still A Buy Despite Its New Industry Classification [View article]
    Well, yes, you could say the same of Cook being overweight in AAPL, but such is his wealth that even a 75% fall in the value of AAPL stock would in no way affect his retirement plans, so he isn't really in the same boat as typical AAPL investors or pension plan managers like Calpers.
    Feb 9, 2013. 07:38 AM | Likes Like |Link to Comment
  • Why Apple Is Still A Buy Despite Its New Industry Classification [View article]
    "Cook was granted one million shares of Apple's stock that vest over ten years when he became CEO. So, a decline in Apple's stock hurts the company's leader, Tim Cook, just as much as it does any other shareholder."

    Not really, because even if the stock price goes down to $10, Cook is still a member of the 1%.

    In reality, he is already immensely wealthy, and could easily retire today, and if he survives the pressures of the job for 10 years even if the stock only trades at cash-in-hand (highly improbable) that should ensure that his entire family will live in comfort for several generations to come even if the stock performs very poorly.

    So there is no way that a decline in Apple's stock will affect him personally in any meaningful way.

    On the other hand, for example, someone who owns 1000 shares of AAPL in a retirement account and sees the stock lose 2/3 of its value might well have to defer planned retirement for several years. Who will hurt the most?
    Feb 8, 2013. 05:10 PM | 4 Likes Like |Link to Comment
  • Can The Apple Tree Continue To Grow? [View article]
    "The enterprise values flexibility over elegance."

    I think so too. On SA you find a plethora of posters who say stuff like "Given me a tablet with this, that, and the other, and I will be in clover" without really explaining what they want to do with the device as the principal part of their business.

    My view is that there is an almost infinite diversity in what people might want to do with a device. Even in medicine a radiologist might use a tablet device or laptop very differently from a cardiologist or a psychiatrist, depending on what softwares were available in their speciality and how their device linked with other machines that produce images and data, professional databases, and so on, as well as whether their device is to be used mainly on the go or at a desk.
    Feb 7, 2013. 08:03 PM | Likes Like |Link to Comment
  • Why Apple's Margins Will Continue To Decline [View article]
    Feb 7, 2013. 01:22 PM | Likes Like |Link to Comment
  • Why Apple's Margins Will Continue To Decline [View article]
    That's interesting. I would have thought this would represent a rather affluent section of the student population since Starbucks is a rather expensive place to get a snack.

    The real question is whether academic use of Apple computers vs Windows machines in likely to grow or accelerate from where it is now.

    Of course, if affluent students buy Macs and it saves the institution from having to employ tech guys, then that is win-win all around.

    But if schools and colleges are moving over from buying Windows machines in bulk to buying Apple devices on their own account, then the math is a bit more complex. If you pay double the price for a terminal, every x years, then how large do your orders have to be to cover the cost by cutting back on techs?

    I have no particular theory on this, but would be interested to hear from someone in that field.
    Feb 5, 2013. 10:38 AM | Likes Like |Link to Comment
  • How Much Should You Pay For Apple? [View article]
    This is all true, but it MIGHT just be a psychological factor for some consumers. People make decisions about how to spend their money all the time, and they forgo some things in favor of others.

    Consider the hard pressed parent who has gifted their student child an iPhone. Might they not opt for the iPhone 4 or iPhone 4S instead of the iPhone 5 to save a bit of money and ALSO note that they won't have to buy new adapters for the stereos at college and at home either.

    These differences in consumer behavior always take place at the edges, but they can affect overall profit margins.
    Feb 5, 2013. 09:40 AM | Likes Like |Link to Comment
  • Apple's Starting To Look Attractive Again [View article]
    You could.

    Really you can name your own price at which you would like to buy Apple stock.

    With the $400/$390 spread, you only have $500 at risk initially, and would make a very nice profit of something like $25 per share on the sale of the $390 put if the stock drops to around $390 at next earnings.

    [Note that the fiscal cliff issues will be upon us again soon, and god knows what that will do to stock prices in the short term, and with new highs on the indexes, a correction is not out of the question. Neither of these will necessarily affect AAPL stock, which is already in the doldrums, but they MIGHT. If the stock market has a really bad day or two, it is certainly not unimaginable that AAPL might drop a few more percent on the day.]

    You would then have to be prepared to be assigned 100 shares at $400 per share in 2015. That result would definitely beat buying 100 shares now for $440 in the event of the stock deteriorating further in the short term.

    Of course, if you believe that AAPL can only go up from here, then this is not for you. But if you want to try to get into AAPL at a once in a lifetime bargain price, it might be worth a shot.
    Feb 5, 2013. 09:26 AM | Likes Like |Link to Comment
  • Apple's Starting To Look Attractive Again [View article]
    Broadly I agree with the article. If you can afford it, the way to go might be to sell puts now if you have at least $35,000 in an account that you would like to use for the trade.

    You can sell the January 2015 $350 put for at least $30 per share, giving you a net entry of $320 if assigned, or a profit of a little under 10% over two years if not assigned, but for the long term, if assigned 100 shares at net $320 you would have a great buy as a dividend growth play.

    However I would play this a bit differently, selling the 2015 $350 put and buying the $340 put to complete the bull put spread. If you are not assigned the profit will be about 30% over 2 years.

    If the stock then dips even further in the next few months, perhaps below $400, then you can sell the $340 put again for a nice profit and wait to see if you are assigned the stock at $350 in 2015.

    So that would be the plan. EITHER you make 15% per year on a small option spread that would only need $1000 in a cash secured IRA account OR you acquire 100 shares of stock eventually at a basis of $320 per share or less, which would surely be a great deal for the long term. You can enter this lottery play for only $1,000 as long as you have at least $35,000 in liquid assets somewhere in your cash account.
    Feb 5, 2013. 09:07 AM | 1 Like Like |Link to Comment
  • Can The Apple Tree Continue To Grow? [View article]
    "We will not focus on AAPL's margins and debt etc, as these are all extremely healthy."

    I can't agree with this at all, because the current insecurity in the price of the stock seems to be all to do with pressure on profit margins.

    It seems to be that narrowing margins ought to be there in the threats section. I can see that "cannibalism" is there and it does lead to falling margins where, for example, someone buys a cheaper device like the iPad mini when they might otherwise have bought a full size iPad.

    I think global recession or lack of consumer spending, or consumers being out of cash or at their credit limits also add up to reduced margins. Remember that there are nowhere near so many home equity loans as there used to be a few years ago.

    Every time someone gets the 16GB iPhone instead of the 64GB iPhone, that is a huge hit to profit margins, given the geometrical price addition for more memory. (Also note that with rival products that have memory slots the additional memory is cheaper.) And every time someone buys the iPhone 4 instead of the iPhone 5, that is another hit to profit margins.

    The effect on margins is always at the margins. If the most affluent buyers just get the iPhone with the largest memory as a matter of course, then it makes a hell of a difference to Apple depending on whether 20% or 10% of customers (or some other number) buy that model.

    Just a few percent of Apple customers making a more economical purchase may have a disproportionate affect on the bottom line.
    Feb 4, 2013. 01:05 PM | 1 Like Like |Link to Comment
  • How Much Should You Pay For Apple? [View article]
    Interesting points, although clearly most high school students and undergraduates will depend on someone else (parents) buying a phone for them and one assumes that most or all of the kids at your son's school will be from affluent families. Also California is a very high wage state and Apple is the "home team" in the sense that the company is located in that state and must be a source of considerable local pride.

    However the nugget of fact to the effect that these affluent young Americans are likely to be Apple customers for a long time to come is not without value, as this demographic will be the leaders and decision makers of the future when it comes to purchasing decisions in the enterprise.
    Feb 2, 2013. 02:56 PM | 1 Like Like |Link to Comment
  • Why Apple's Margins Will Continue To Decline [View article]
    "If this is how the Stock Market values companies, incredibly high PEs for virtually no earnings and no positive cash-flow AMZN, then AAPL stock will soar if its margins go down."

    Yes,but the next question is how much of your net worth you are prepared to stake to make money out of this theory of yours.

    You can't really compare the two business models.

    Amazon is like a department store that provides a free bus ride from the suburbs to downtown, so that customers will buy their merchandise and not that of rival retailers. It hopes that in the long run the competitors will go out of business, leaving the field clear.

    Apple discovered an absolutely killer combination--a first class brand new product, the iPhone--combining a touch screen tablet computer with a cell phone--with an amazingly effective way of having retailers in the form of cell phone networks providing installment plans to mass market consumers in such a way that consumers are hardly aware of the true price of the device.

    But the question about Apple how long they can continue to make abnormally large profits. It seems unlikely that their next phone will be a quantum leap over what rival manufacturers are offering for less money or that the size of the market for $700 devices in the developing world can continue to provide the same rate of growth that Apple has experienced since 2007.

    My biggest question is whether Apple can simply continue to make the same profits as it is making now. If this is reasonably certain, then the p/e of the stock is quite cheap and a LOT of money can be made if the cards are played right.
    Feb 2, 2013. 11:50 AM | Likes Like |Link to Comment
  • Why Apple's Margins Will Continue To Decline [View article]
    The question is really where will the chart lines of increasing numbers of devices sold intersect with falling margins.

    For example they sell more tablet computers, but since the mini iPads sell for less than the big guys and at less profit, what is the final outcome?

    They sell lots of music, but if the same music can be bought cheaper on Amazon and downloaded onto the Amazon app/player on an iPhone how does this affect the bottom line, and how much money does Apple get from the Amazon app to compensate for loss of music sales?

    If the phone companies can get similar, equal, or better smart phones from Nokia, Blackberry, Samsung, or LG for less money, how willing will they be to go the extra mile to sell iPhone contracts? If they show every potential iPhone customer another type of phone what percentage success will they have?

    No one really knows the answers to these questions, so there is room for a lot of wiggle room.

    Yes, if you plan to retire in 25 years, it would do no harm to buy a few Apple shares now for your retirement account, but if your financial well being could depend on accurately predicting where Apple stock might be in a year or two years from now, then that is a much tougher proposition.

    I think in another couple of quarters, we will start to get a better idea.
    Feb 2, 2013. 09:07 AM | 2 Likes Like |Link to Comment
  • How Much Should You Pay For Apple? [View article]
    "I love to use, my Mac, iPhone, iPad and I am very happy to pay a premium to have the privilege to be an Apple (AAPL) customer)."

    It might be better to cover other stocks that you don't have a personal interest in, because if you think that it is a privilege to pay over the odds to be an Apple customer, you might overestimate the degree to which others share your sense of privilege.
    Feb 2, 2013. 08:18 AM | Likes Like |Link to Comment
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