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faustius

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  • Apple Hasn't Solved The Smart Watch Dilemma [View article]
    On further reading, it turns out its just a rumor. Apple hired some people from a bankrupt company that tried making one. That caused a lot of speculation.
    Sep 11, 2014. 02:21 AM | 1 Like Like |Link to Comment
  • Apple Hasn't Solved The Smart Watch Dilemma [View article]
    The most interesting feature of the watch is the blood glucose monitoring sensor. The FDA has been blocking devices like that for decades. I can recall a MiniMed rep 20 years ago walking around showing everyone at an event his real-time glucose level on his wrist.

    It's been suspected that the increasingly thin justifications for blocking these devices has been to protect the test strip industry, and the FDA is going to have trouble denying Apple. This could potentially be a very disruptive technology.
    Sep 10, 2014. 02:16 AM | 11 Likes Like |Link to Comment
  • Apple: The $200 Billion Question [View article]
    I don't see anywhere in your assessment of the value of that preferred share any thought to the risk that the bank might go bellyup, and your preferred worthless.

    If you see the market price of your preferred suddenly plummet, wouldn't it be a good idea to do some research into why others have started discounting it?

    I'm actually on your side on this issue. I'd love it if the government didn't discourage dividends through punitive tax policies, and investors valued equities based on their income, rather than funky earnings statements with massive laundry lists of footnotes attached to the end. However that doesn't mean I think it's a good idea to turn a blind eye to the market.
    Feb 13, 2013. 07:49 PM | Likes Like |Link to Comment
  • Apple: The $200 Billion Question [View article]
    I don't think that's really a fair assessment. I'm just a retail investor, however as I go through the process of educating myself, I don't take definitions of terms at face value, but look at what they represent. I've even studied pre-depression era corporate governance textbooks to learn how our current, sometimes bizarre definitions evolved.

    I've seen CFO's on this site who I respect greatly, scratch their heads on topics like how short positions may or may not impact float. However when terms are defined in a self-serving manner by insiders, and the real processes are hidden from the public eye, that doesn't mean people are stupid when they are being taught fictitious information.

    For that matter, I've had a former boss who used to work at a major bank use “market maker” and “prop desk” as interchangeable terms. You wouldn't learn to do that unless you were on the inside.
    Feb 13, 2013. 12:40 AM | Likes Like |Link to Comment
  • Apple: The $200 Billion Question [View article]
    Each style carries its own risks. Value investing means believing you are better at valuing a stock than the market is, even though the market price is the only price that counts. Buying at a great price is likely to mean you are overlooking a risk the market has already priced in.

    Ignoring the direction that the overall market, or a particular company is trending can lead a value investor to bloody their hands catching one falling knife after another. I'm not saying one style is better or worse, just that there are special risks with every approach.
    Feb 13, 2013. 12:14 AM | 1 Like Like |Link to Comment
  • Apple: The $200 Billion Question [View article]
    Hmph. If you bought an ounce of gold for $1,650 believing that that was a fair price, and tomorrow people were willing to buy it from you for $3,300, despite nothing fundamentally changing its value, wouldn't you be remiss to not sell, and purchase some silver with the proceeds?

    He gave you his opinion on what one share of Apple is worth (and a pretty reasonable opinion at that). So long as he can't sell it for more than what he perceives it's worth, he's willing to hold onto it. What's unreasonable about that?
    Feb 13, 2013. 12:00 AM | Likes Like |Link to Comment
  • Apple: The $200 Billion Question [View article]
    Why so many fail to understand this, no matter how clearly it is stated is beyond me.
    Feb 12, 2013. 11:43 PM | 2 Likes Like |Link to Comment
  • Apple: The $200 Billion Question [View article]
    You're not looking at the situation in aggregate. If all market participants panic and trade 2% of the outstanding shares amongst each other for a 30% lower price, the current market price of all shares declines by 30%. This means the market cap declines by 30%.

    You are assuming there is some kind of relationship between Apple's capital assets, and its market cap. There isn't. It's market cap is solely the current market price multiplied by the shares outstanding.

    Your shares also don't retain a proportionate ownership of the company over time. They are continually being diluted as new shares are awarded to Apple's board members and management. Apple can choose to keep it's share count stable by spending it's cash to purchase back shares from the market to offset the new shares being issued. However, that's like trying to make a piece of string longer by cutting off one end and tying it to the other. You'll be dilluted either way.
    Feb 12, 2013. 11:31 PM | Likes Like |Link to Comment
  • Apple: The $200 Billion Question [View article]
    I'll weigh in and split the difference between the two extremes. Market caps are correlated to the amount of funds market participants have historically placed in their accounts, plus dividends paid. However, there is no one to one relationship.

    Consider an extreme hypothetical example. A new exchange forms with 2 securities listed each with 100 $10 share IPO's, and 2 market participants who each have $1,100 in their accounts, purchase half of each company. Assume that both companies perform poorly, and each investor becomes less bullish on different companies. Each sells 10 shares of the company they are less bullish on to the other for $5.

    What's the result of this example? While $2,000 was paid into the exchange's securities, the total market cap of the exchange has fallen to $1,000. The other $1,000 has simply ceased to exist. If the investors had instead perceived the companies to be performing well, and sold a few shares to each other at $15, then $1,000 of new market cap would have been created.

    In theory we all expect an efficient market to keep market prices roughly in line with a company's long term value. However, a company's value is a matter of opinion of its future earnings growth. So a change in a company's market cap merely represents a change in the collective opinion of a company's future prospects.
    Feb 12, 2013. 05:32 AM | 1 Like Like |Link to Comment
  • Apple's Strategy Of Built-In Obsolescence [View article]
    16 gigs may be high end now, but in a couple years it won't even meet minimum system requirements. I can remember when 4 megs was a lot.
    Jun 22, 2012. 09:55 PM | Likes Like |Link to Comment
  • The Apple 'Free Pass' [View article]
    George,
    I should let this lie, ohh well... Bradmeister is correct on your usage of effected. Let's nail this down by substituting the definitions in that link you posted for the words in dispute, and see where that gets us.

    Affected will be replaced with "changed by"
    Effected will be replaced with "brought about"

    Sentence #1:
    I hope that Apple shareholders don't have to face that test, as there are negative consequences for us all if Apple seriously falters, but some would be changed in far greater measure than others because of the need to cling to the irrational.

    Sentence #2:
    I hope that Apple shareholders don't have to face that test, as there are negative consequences for us all if Apple seriously falters, but some would be brought about in far greater measure than others because of the need to cling to the irrational.

    Correct usage:
    If Apple falters, it will effect losses for people.
    Incorrect usage:
    If Apple falters, it will effect people.
    *Poof!* More people!
    May 31, 2012. 11:19 PM | 1 Like Like |Link to Comment
  • The Apple 'Free Pass' [View article]
    The first person use "cult" in that context was GRJ, who identified himself as being long on AAPL. I think others, including myself just took that as a working definition and ran with it, without intending any insult.

    For the record, I don't think that everybody who believes AAPL is currently undervalued has a cult-like devotion to the company.
    May 30, 2012. 02:02 AM | 1 Like Like |Link to Comment
  • The Apple 'Free Pass' [View article]
    A good acid test to separate the bulls from the cultists, would be to ask them at what price they would be willing to sell their shares at, and how they arrived at that price target. I think I share your concern that there are those out there that would not sell no matter what.
    May 28, 2012. 06:45 AM | Likes Like |Link to Comment
  • The Apple 'Free Pass' [View article]
    "Where should the money be just in case we are visited by another global credit crunch?"

    Buy Walmart if we see another credit crunch forming.
    May 28, 2012. 06:30 AM | Likes Like |Link to Comment
  • Apple's Sensible Dividend [View article]
    Well, as Felix's article mentioned, the share buybacks are in place to offset the share dilution caused by executive compensation. However, I don't understand why some people are upset with the level of Apple's compensation. They're doing a great job, they deserve to be rewarded for it. I'll save my executive compensation complaints for companies that are being poorly run.
    Mar 22, 2012. 03:43 AM | 1 Like Like |Link to Comment
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