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bailinnumberguy

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  • 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
  • Apple: The Most Undervalued Large-Cap Stock In America [View article]
    Apple is the most widely held stock by hedge funds. The stock is so liquid that it gets manipulated up or down in planned trades at their whim. Those are the unfortunate facts. I watch the buy/sell action on this stock every day and the likelihood that it gets artificially beaten down for the benefit of big traders is 100%.
    Nov 28, 2011. 05:18 PM | 1 Like Like |Link to Comment
  • Apple: The Most Undervalued Large-Cap Stock In America [View article]
    Buffett has no position in Amazon. He may have ordered a book on there one time. That's the extent of his investment.
    Nov 28, 2011. 05:15 PM | 1 Like Like |Link to Comment
  • Can Apple Reach $10,000 A Share? [View article]
    If the Intelligent Investor told you to paint your face purple and dress like a chicken, would you do it? Apple famously is just the opposite of a company that makes widgets. Their competitive advantage is in the quality, perceived or otherwise, of their products, which is how they're able to get the margins that they do. Buffett looks for companies w/ a durable competitive advantage. Apple has that with a huge customer base who will only buy their product for years to come. Buffett holds or has held huge positions in Coke (sugar water), Geico (cheap auto insurance), Gillette (razor blades), Dollar General (cheap junk). I'd argue that all of those companies produce easily copied products, but they have 'share of mind'. Apple has that in spades.
    Nov 28, 2011. 04:07 PM | 2 Likes Like |Link to Comment
  • Apple: The Most Undervalued Large-Cap Stock In America [View article]
    Here's why Apple underperforms its fundamentals: (1) Huge market cap which requires seismic shifts to move the price appreciably and sustainably higher (2) institutional restrictions (2%, no more) on individual holdings (3) High liquidity which makes a short play simple in soft patches (4) Fat and happy long-term investors. Apple longs spend their days preaching to each other about the virtues of their company. The tree of prosperity needs to be refreshed w/ the blood of newbies.
    Nov 28, 2011. 03:14 PM | 1 Like Like |Link to Comment
  • Can Apple Reach $10,000 A Share? [View article]
    Another commentary in which the writer is preaching to the choir. Everyone knows about Apple's awesome fundamentals. It's the most liquid and widely held stock in the market and therein lies the problem. Apple needs new investors or another blowout earnings release to drive its price up. The stock doesn't have enough conviction w/ the longs and won't until the next earnings release. It's a range bound stock and has been for the last 5 months. It's in the low end of the range and won't breakout without killer earnings. Mutual funds that hold Apple can't buy any more. New money has to come in.
    Nov 28, 2011. 09:54 AM | Likes Like |Link to Comment
  • Apple Is Still An Excellent Buy [View article]
    A company doesn't achieve the kind of success that Apple has because of just one guy. Reading the hagiographies about Jobs at times becomes laughable. You'd think that Apple was 1 guy and a bunch of flunkies. Jobs greatest skills were as a salesman, borrower of technology and negotiator. Most of the original ideas for the first Apple computers were 'borrowed' from Xerox. The iPod technology should've belonged to Sony. Of course he was brilliant, but he was able to convince top people to join him and he unabashedly stole ideas from others. Apple will go on w/o Jobs.
    Nov 28, 2011. 07:19 AM | Likes Like |Link to Comment
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