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Misho ILIEV

Misho ILIEV
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  • 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 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 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 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 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 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 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 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 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 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 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 06:07 AM | 1 Like Like |Link to Comment
  • Apple Cannot Be Valued: Warren Buffett Knows This And You Should Too [View article]
    Aparo201,

    I see a fault with your comparison between MSFT and Apple. Once MSFT matured it had monopolised the market for PC operating systems and acquired significant market power due to the high barriers of entry into that market. That was a very, very comfortable position for MSFT and they were in a position to relax and still reap huge profits.

    The situation with smartphones and tablets is completely different, one characterised by strong competition and low barriers of entry. Just see how many companies are entering the market and challenging Apple.
    Nov 15 04:45 AM | Likes Like |Link to Comment
  • Apple Cannot Be Valued: Warren Buffett Knows This And You Should Too [View article]
    Rickraphael,

    I trust that you have the exact figures right. I claim no better insight into that.

    My point is not about the numbers but rather about the durability of Apple's competitiveness. Apple has managed to stay very competitive for many years by placing on the market high end products that strongly appeal to consumers, creating new makets, having the first mover advantage, a strong brand and reputation, etc.

    I would consider that only the strong brand lends durability to Apple's competitiveness. On the other points Apple is under strong competitive pressure and at risk of losing advantage. So far thanks to good management and/or agressive innovation they have managed to outmanoeuvre their competition.

    In this situation Apple has to do everything exactly "right" in order to sustain its competitiveness. A small misjudgment can cost them a lot. That means their competitive advantage is not durable. It hasn't been in the past either. So Buffett was, is and probably will not be interested in investing.
    Nov 14 08:15 AM | 1 Like Like |Link to Comment
  • Apple Cannot Be Valued: Warren Buffett Knows This And You Should Too [View article]
    Rickraphael,

    I am not sure Apple meets Buffett's criteria. You say that:

    "5. Are 5 year profit margins greater than 10-20 percent? Yes, 5 year average is 23.4%"

    That is true but the genuine Buffett test is whether the company has a durable competitive advantage. The high profit margins for an extedned period is only an indication but not absoulte proof of durable competitive advantage.

    I belive that Buffett doesn't consider that a company like Apple does possess a durable competitive advantage and that is the main reasons he stays away. (In addition to that fact that Apple is not shareholder-friendly - it only started going in that direction recently.)
    Nov 13 11:57 AM | 4 Likes Like |Link to Comment
  • Apple Cannot Be Valued: Warren Buffett Knows This And You Should Too [View article]
    You can't be serious, Odspan. Buffett is the only one who consistently produced yearly returns in the region of 22-23% over many decades. If it were so easy why haven't the other post WWII investors done the same?

    If you make a simple calculation, you will see that the compounded return with 22% yearly makes USD 1000 into USD 144,000 in 25 years, USD 390,000 in 30 years and 2.8 millions in 40 years.

    Steve Jobs is a visionary without a doubt. Warren is an investor.

    And this is a blog about investing. Period.
    Nov 13 08:07 AM | 6 Likes Like |Link to Comment
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