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  • Amazon’s (AMZN) Kindle Fire tablet, which went on sale last month, "has come out of the gates strong," and Evercore says its relatively cheap price tag could allow it to "vaporize" other for-profit Android tablet business models. Yet even as Amazon may account for half of all Android tablets by next year, Evercore says Amazon isn’t a real threat to the iPad (AAPL).  [View news story]
    2 restaurants side by side will generally perform better individually than they would w/o the other. The Kindle Fire creates new tablet users and a broader market. So Apple takes a smaller share of a broader market and ultimately sells more units. I'll take that. It has a relatively small share of the whole mobile phone market and seems to be getting by w/ the iPhone. Next subject.
    Dec 7, 2011. 07:36 AM | 1 Like Like |Link to Comment
  • Why Apple Is So Cheap [View article]
    When someone buys an iPhone, they do so to not just get a phone w/ a few extra features. They're buying into the Apple ecosystem. Everyone that I know w/ the iPhone has spent more downloading apps, songs, books than they did on the actual device. The iPhone is the preferred conduit into the Apple experience. Apple has share of mind. Users of Apple have been so for decades and will continue into the future. It may have the highest level of brand loyal of any company in the world. Unless Apple really screws up, I doubt they're going to suffer material attrition in their customer base.

    That being said. I can't see Apple becoming the trillion dollar company that some are forecasting without major growth in the economy. The reality of how the stock is traded and market dynamics in general will constrain its valuation growth to a significant extent. It's the most widely held stock by hedge funds. It's heavily hit by program trading. With ETFs, sector funds, large cap funds, it will move, to a substantial degree w/ the tech sector and the broad market. Apple's simply not going to be a trillion dollar company when the next largest market cap is $400 billion. That's just the reality of the market.
    Dec 6, 2011. 08:00 AM | Likes Like |Link to Comment
  • Apple And Exxon: Only One Is A True Long-Term Play [View article]
    One thing that I've learned when dealing w/ traders is that if someone brags about having made a certain amount of money on trades, you can be assured that he actually lost money.
    Dec 5, 2011. 03:03 PM | 3 Likes Like |Link to Comment
  • Apple And Exxon: Only One Is A True Long-Term Play [View article]
    Just out of curiousity, why would you assume that if a stock takes a big drop in price, it then becomes a good value? I know many traders who only buy stocks at their tops. If you wait for a stock to bottom out before you go long, you'll get to enjoy the ride all the way down. Maybe you want to buy into RIMM, NetFlix, Kodak and American Airlines at their very nice current prices.
    Dec 5, 2011. 02:56 PM | Likes Like |Link to Comment
  • Apple And Exxon: Only One Is A True Long-Term Play [View article]
    Based on your recommendation I think I'll start buying Apple heavily at its current price. If the market is a zero sum game and you're on the downside of a trade, I feel very comfortable being on the other side. If you plan on re-buying in the low $300s, you'll either (1) be waiting a very long time to get your price (2) be buying into a broad market that is in free fall and will therefore be losing your shirt.
    Dec 5, 2011. 12:44 PM | Likes Like |Link to Comment
  • Apple And Exxon: Only One Is A True Long-Term Play [View article]
    Most of the volume on Apple stock is from institutions/program trading. It's the most widely held stock of hedge funds If you think that Apple is going to break out dramatically from the rest of the market, you don't understand market dynamics, stock bundling, ETFs, et al. By the fundamentals, Apple is worth perhaps double, maybe more, its current valuations. Apple's current price has nothing to do w/ its fundamentals.
    Dec 5, 2011. 08:44 AM | 1 Like Like |Link to Comment
  • Apple And Exxon: Only One Is A True Long-Term Play [View article]
    Steve Jobs retired as CEO and the stock briefly dipped into the low 350s in after-hours trading and bounced up on strong support. Steve Jobs died, the stock essentially didn't drop at all from about $370 or so. The disappointment of the iPhone 4S briefly pushed the stock price down below $360 and again at bounced up on strong support. Apple has tested below $360 several times over the last 6 months or so and it doesn't hang out there for long. There isn't any rational interpretation, short of some cataclysmic event like the Euro going belly-up, to suggest that AAPL will drop and sustain a level below $350.

    On the other side of the coin, AAPL's upside in market cap isn't unlimited. 70% or so of the trading in the stock is hedge fund and program trading. The stock is so widely held that the institutions who are going to invest in Apple for the most part have already done so and they can't invest more as they've reached their diversification ceiling. AAPL might approach $500 after blow-out earnings, but not much higher. The economy would have to expand greatly to support a higher base of equity money necessary to drive AAPL higher.
    Dec 5, 2011. 07:51 AM | Likes Like |Link to Comment
  • The iPhone 4S (AAPL) went on sale in the U.S. on Oct. 14, and that, according to comScore, helped boost its October share of U.S. smartphone users (on a trailing 3-month basis) to 28.1% - up 70 bps from September's level. However, even in an iPhone launch month, Android's (GOOG) share grew faster, rising 150 bps to 46.3%. Research In Motion's (RIMM) share fell 170 bps to 17.2%.  [View news story]
    As the previous poster noted, Apple has no problems on the demand side but is constrained in its supply chain. Better to have issues on the supply side of course, but logistics genius Tim Cook needs to get this worked out if Apple is going to max out its market potential.

    As far as the Asia market goes, I was recently in both Hong Kong and Japan. Apple products have unbelievable potential in the Chinese market. The love of that brand is a near obsession among the Chinese. Japan's a bit of another story. The Japanese have a heavy bias towards anything manufactured by a Japanese company. They'll grudgingly buy Samsung products. American products? Not so much. Brazil has huge potential as well.
    Dec 3, 2011. 10:07 AM | Likes Like |Link to Comment
  • When Is The Best Time To Buy Apple? [View article]
    The day that Steve Jobs returned as CEO was a pretty good day to buy some Apple. Seriously, all of the fundamentals in the world won't change the reality that hedge funds have landed on Apple and decided to use the stock's liquidity as a way to make money trading against the longs during soft markets.
    Dec 1, 2011. 04:24 PM | Likes Like |Link to Comment
  • Apple: The Most Undervalued Large-Cap Stock In America [View article]
    Apple management's fat and happy. They make enormous salaries, bonuses and are deep in the money on stock options and awards. They're not going to look a gift horse in the mouth and change the way they've done business just because some dinky little investors on the outside are frustrated. They can stand pat and they're all set for several lifetimes.
    Nov 30, 2011. 06:57 PM | 1 Like Like |Link to Comment
  • Apple: The Most Undervalued Large-Cap Stock In America [View article]
    Apple's pretty much stuck in the mud, likely until the next earnings release. Too much hedge fund involvement in this stock.
    Nov 30, 2011. 06:53 PM | Likes Like |Link to Comment
  • Apple: The Most Undervalued Large-Cap Stock In America [View article]
    Apple suffers from a different issue in large numbers. The stock is so widely held that it can't be accumulated in huge increments by institutions who are already at their limits on what they can hold in AAPL. With a relatively flat economy and a finite amount of capital to invest in equities, there isn't institutional money available to put into AAPL en masse.
    Nov 29, 2011. 01:00 PM | Likes Like |Link to Comment
  • Apple: The Most Undervalued Large-Cap Stock In America [View article]
    Think of stock investing as a kind of legal ponzi scheme and you'll understand part of the reasons that Apple doesn't trade anywhere close to what its fundamentals indicate. EVERYONE knows about Apple and its monstrous fundamentals. We need fresh investors or the current longs need to continue pumping cash into shares of stock. If you bought Apple at $80 or so, are you more likely to be buying or selling Apple at prices of $375 or so? Relatively recent investors need even later arrivers to the party to continue to propel the stock forward.
    Nov 29, 2011. 12:52 PM | Likes Like |Link to Comment
  • Can Apple Reach $10,000 A Share? [View article]
    I'm long AAPL because of the company's tremendous fundamentals but understand full well the market dynamics that prevent the company from going straight up in value. Plug Apple's numbers into the Graham formula for valuing a stock and you'll be stunned to find that Apple would be priced in the thousands of dollars per share. Apple can't take off for several reasons: (1) Its huge market cap. There's a finite amount of investment capital in the world. Institutions are severely constrained in how much they can pump into any individual stock. Apple is already widely held. Unless the broad economy is growing at a fairly healthy rate, Apple's not shooting straighting up no matter how good their numbers are. (2) Apple's liquidity puts it in the front of the line w/ shorts when there's a soft market.

    So Apple is a victim of its size and liquidity. Reduce Apple's size by 50% or so w/ a proportionate reduction in its EPS, et al and the stock would be growing much more robustly.
    Nov 29, 2011. 09:14 AM | Likes Like |Link to Comment
  • Behind Apple's $170B Fiscal Year [View article]
    Apple is a victim of its size and liquidity. Of course its fundamentals are fantastic, but the stock price will never fully reflect the fundamentals. In soft markets, Apple is the first stock that shorts look to because of its liquidity. There's a finite amount amount of money in equity markets. Institutions, in many cases, are already maxed out on what they can put into AAPL. Apple's fundamentals are great, but you can't keep your head in the sand and ignore market dynamics.
    Nov 29, 2011. 07:43 AM | Likes Like |Link to Comment