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Misho ILIEV

Misho ILIEV
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  • Apple's Institutional Slingshot: Rational Explanation Of Irrational Stock Action [View article]
    The basis for the uncertainty for Apple is that it operates in a highly competitive market and so they can lose their advantage relatively easily. In 1930s one of the biggest car-makers in the US was Studebaker. Where is it now? More recent examples - Nokia, Dell, HP. They are all victims of intense competition.

    We already see that Samsung has a greater market share of the smart phone market. Plus there's so many entrants on the market. That makes it unpredictable. It also depends on innovation and new products. No guarantee that Apple will continue coming up with the best ideas.


    Visa, MasterCard and American Express have been there for decades, they have built an payment processing systems that are very difficult to match by rivals. They have very high profit margins and normally that would have attracted strong competition which would have brought the margins down. But the entrants are few and not really successful. People all over the world tend to have either Visa or MasterCard.

    And now the cashless payments. If the global economy will grow (and we assume that it will/can grow forever - let's ignore the fact that this is plain wrong unless we build colonies on other planets) then payments will be constantly increasing and somebody will have to process them. It doesn't matter which industry will win. It doesn't matter if it will be on a colony on Mars. We are not going back to paper money or gold. There will very likely be Visa and MasterCard on the space stations :-) And Coca Cola too. LOL
    Nov 18, 2012. 05:15 PM | Likes Like |Link to Comment
  • Apple's Institutional Slingshot: Rational Explanation Of Irrational Stock Action [View article]
    It's not a prediction. On the contrary, a refusal to predict what is impossible to predict.

    You are only predicting one year ahead, not ten, let alone 50.
    Nov 18, 2012. 12:48 PM | Likes Like |Link to Comment
  • Apple Cannot Be Valued: Warren Buffett Knows This And You Should Too [View article]
    Buffett is an investor. He says that if you cannot value an asset you cannot invest in it.

    But Buffett says you can always gamble. And maybe you will be lucky (maybe not). Do gambling long enough, though, and you will be wiped out in the end.

    This is the Buffett lesson.
    Nov 18, 2012. 12:08 PM | Likes Like |Link to Comment
  • Apple's Institutional Slingshot: Rational Explanation Of Irrational Stock Action [View article]
    No, not 100% sure, of course. :-)

    But I would put a 80% probability for Visa being still one of the dominant forces in non-cash payments and about 5-7% for Apple's mere existence 50 years from now.

    Yes, right mobile payments. But Visa and MasterCard are themselves in the process of entering this market and they have a huge advantage with their payment processing systems and unraveled security and top notch 24/7 service.

    PayPal may have a hard time in the near future after the introduction of V.me. And anyway, aren't all these new payment systems ultimately linked to the good old bank and credit card accounts?

    And plastic itself will most likely not go away but significantly grow in the next decades even with the advent of the mobile payments.

    So yes, highly likely Visa will be there in 50 years. I see it in my crystal ball ;-)

    But when I look for Apple in 10 years I see only fog. Shrouded in mystery and uncertainty their future is ;-)
    Nov 18, 2012. 11:58 AM | Likes Like |Link to Comment
  • Apple Cannot Be Valued: Warren Buffett Knows This And You Should Too [View article]
    I agree, Outcastsearcher. Judging by what one reads in SA there is too little common sense amongst Apple investors.
    Nov 18, 2012. 11:43 AM | Likes Like |Link to Comment
  • Apple's Institutional Slingshot: Rational Explanation Of Irrational Stock Action [View article]
    Lopakaii, why aren't they selling Visa off then? Did you know that Visa is up 56% in the last 12 moths? And more than 30% up the year before that?

    They sell Apple because they believe they might have to sell it next year anyway. So why not now before the increase of the tax on capital gains.

    By contrast Visa is a stock you can hold forever.
    Nov 17, 2012. 04:07 PM | Likes Like |Link to Comment
  • Apple's Institutional Slingshot: Rational Explanation Of Irrational Stock Action [View article]
    But overall this sell off indicates that funds consider Apple a high risk stock.

    Look at Visa - it's a huge and growing company that spiked in the last two years, yet the volumes of trade are really thin... Nobody wants to sell their Visa despite the remarkable increase... Visa will be there 50 years from now and probably still growing.
    Nov 17, 2012. 06:28 AM | Likes Like |Link to Comment
  • Apple's Institutional Slingshot: Rational Explanation Of Irrational Stock Action [View article]
    Those 8% are just by way of example. Some funds have only 1% holdings in Apple. I believe some didn't have Apple at all as there was no dividend until this year.
    Nov 17, 2012. 06:25 AM | Likes Like |Link to Comment
  • Apple's Institutional Slingshot: Rational Explanation Of Irrational Stock Action [View article]
    Sounds reasonable to me, Jason. (Not sure about the skyrocketing, though.)

    @earlalbin Oh, those conspiracy theories! It is perfectly rational for mutual funds to recalibrate their portfolios, it's called risk management.
    Nov 17, 2012. 03:01 AM | Likes Like |Link to Comment
  • Apple: No Innovation, No Problem (For Now) [View article]
    Just wait another hour or so ;-)
    Nov 16, 2012. 11:34 AM | Likes Like |Link to Comment
  • Apple: No Innovation, No Problem (For Now) [View article]
    I agree that there is a brand loyalty to Apple, and it is indeed stronger than towards other players on the market. But the market is not convinced, and so am I, that this loyalty is sufficiently strong for the shares to go up.

    Having said that I consider this sell off (AAPL at 510,98 already) a bit exaggerated. We are entering a vicious cycle here where people are just freaking out. And it affects me too - even though I think it's cheap I am not buying it... Two days ago I increased my Visa holdings when price dipped below USD 140.
    Nov 16, 2012. 11:16 AM | Likes Like |Link to Comment
  • Apple: No Innovation, No Problem (For Now) [View article]
    My impression is that there is a core customer base that is staunchly loyal and a wider group which is much less so.
    Nov 16, 2012. 10:31 AM | Likes Like |Link to Comment
  • Apple: No Innovation, No Problem (For Now) [View article]
    I agree, Adam, that is 23% becomes the new normal and it ca be sustained for some years to come the current price of USD 517.77 is a very good bargain.

    But that is uncertain and the market is pricing in the risk. I cannot say that it is highly probable that AAPL's earnings growth will be 23% in 2015.

    Let's see.
    Nov 16, 2012. 10:27 AM | Likes Like |Link to Comment
  • Apple: No Innovation, No Problem (For Now) [View article]
    The perceived risk of Apple is much bigger than with MSFT (multiple 14) and greater still than KO (multiple 19).

    Paying 19x earnings for Coke is okey in terms of risk. Paying 19x earnings for Apple (that would USD 900 per share) is a bit too risky.

    What does "any time soon" mean? I agree that next quarater Apple will have good growth figures. Will that growth be comparable to Q1 2012... Well...

    And what about Q1 2015? Nobody can seriously have a clue about that. Too much competition in the market, too many variables.

    Could Apple do a fantastic job (even without the next big thing?). Sure they *might*. How certain are we? Well, it is not very likely.

    How certain are we that people will still drink Coke 15 years from now in comparable quantities to now? How certain are we that people will still be buying iPhones 15 years from now?
    Nov 16, 2012. 09:08 AM | 1 Like Like |Link to Comment
  • Apple: No Innovation, No Problem (For Now) [View article]
    I agree iPhone 5 is a good product. The issue with innovation is more about creating the next big thing that everyone will rush to buy.

    How sure can investors be tha Apple will do that?

    If they don't do it... Well, earnings won't be increasing exponentially. They could even decrease and shareprice could go even furher down.

    We already have the first signs of deceleration. We all know that in Q4 Apple missed estimates that weren't really high. And the important thing is not tha it was a small miss, but that compared to Q4 2011 earnings growth, last quarter's 23% increase yoy is a significant deceleration.

    Apple needs the next big thing to accelerate again.
    Nov 16, 2012. 06:07 AM | 1 Like Like |Link to Comment
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