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System6

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  • Is Apple Really A 'Buy'? [View article]
    Your point is valid, though one has to remember that Apple's growth has tended to be carried on new/additional products it brings out, which then increase the size of its overall market.

    First it was the MP3 market, into which they brought the iPod. The market actually expanded as a result, and they captured a certain share that eventually maxed out and presumably quit growing.

    But Apple didn't.

    They brought out the iPhone, which is repeating the same cycle as the iPod did, and will certainly reach a point of growing more slowly, if it hasn't already.

    But then the iPad is still relatively in this cycle, so....

    If one takes a snapshot of Apple's product mix and assumes it doesn't change/grow, then the company's growth will certainly be limited to the sum of the market sizes for its products.

    But over the past decade they have tended to have new products in the pipeline, and so their total market size may jump again, should they bring out iTV or other rumored products. And this doesn't include the growing impacts of the recurring-revenue service-side of their business, which one would have great difficulty seeing as approaching maturity.

    So your point is probably accurate in theory, and if no new products/services emerge, will eventually become reality. Apple longs are betting the company, based on its track record, will innovate new products and services, and avoid this for the foreseeable future.
    Jan 14, 2013. 10:05 AM | Likes Like |Link to Comment
  • Is Apple Really A 'Buy'? [View article]
    This is not an investment analysis, per se.

    First, the "law of large numbers" is actually not a law, scientific or otherwise. Suggesting it is, is a false premise. Therefore, your first point is merely personal conjecture.

    Your second point is more or less that they're somehow uniquely in a tough business. Of course, you don't provide a basis for what makes this industry uniquely difficult.

    Your point 3 is that many large previously successful firms eventually peaked then lost their value. As a point of fact, historically, virtually all of them have. But this has no bearing on any successful company at any random point in time.

    Ironically, your dismissive comment about Cramer - of whom I'm neither a fan nor detractor - suggests his investment analysis is simplistically contrarian. You don't give him credit for the load of fundamental analysis he does to back his recommendations -- and I would argue that your article lacks comparable due diligence.

    SeekingAlpha tends to be a quantitatively oriented site where analysis, rather than opinion, is the measure of merit. By that standard, your article is uncompelling.

    For disclosure purposes, I continue to be long Apple, though I sold down at 550 and at 650 late last year.
    Jan 13, 2013. 03:50 PM | 14 Likes Like |Link to Comment
  • 3 Signs Apple Is Turning: A Rebuttal [View article]
    I remember reading the original article and thinking similarly that the points made seemed like illogical conclusions based on the data or hypotheses presented. I give that author credit for trying, but I think your counter arguments are stronger, simpler, and more supported by the data.

    You mentioned this was your first SA post. Congrats, and come again. JT Fisher
    Sep 24, 2012. 09:03 PM | Likes Like |Link to Comment
  • Why Does Apple Seem Worse Than Amazon Now? [View article]
    Bill - I'd encourage you to be careful about providing context such as below regarding HLF wherein you reference a "crusade" against the company.

    "You could even look at David Einhorn's crusades against Green Mountain (GMCR) and Herbalife (HLF). The stocks each got crushed when he questioned them...."

    Unless there has been activity on behalf of Einhorn beyond the apparently non-accusatory questions he raised on the HLF call (have you heard/read those?), it would be a huge leap from those to get to a "crusade" on his behalf - at least for the moment.
    May 7, 2012. 02:59 PM | 1 Like Like |Link to Comment
  • The Fallacy Of Apple Chart Skeptics [View article]
    That's a lot more helpful than superlative headline tags like "parabolic" and such. Your chart provides an argument that Apple's stock prie has lagged but is catching up to a comfortable valuation level. At status quo, one wouldn't expect doubling nor halving of value from current valuations. The bet ahead is about growth vs. contraction of earnings. Valuation will move accordingly, one presumes.
    Mar 14, 2012. 06:11 PM | Likes Like |Link to Comment
  • Apple Longs: Are You Glad You Bought And Held? [View article]
    Rocco - quick question:

    The gap between AAPL market price and analyst targets is large, and while the stock just jumped $25, the gap actually seems to be growing as analysts hurry to raise targets even more. So I'd appreciate your thoughts on why the market and the analysts continue to so far apart, and how you see that playing out going forward.

    For what it's worth, my buy& hold thesis for AAPL is driven by:

    i) their superior products today with a lot of enormous upside in enterprise market and international markets,

    ii) growing sources of recurring revenue (itunes, ibooks, icloud, etc.), and

    iii) assumption that other disruptive & superior products and services (i-tv, etc.) are in the pipeline.

    However, at 9x PE, it seems like the market views AAPL as a fully grown cash-cow. I sense this as continued investment upside, but it nags at me as to why the market treats AAPL so tepid (in my view).

    Appreciate any perspective you might offer.

    JT
    Jan 26, 2012. 12:46 PM | 1 Like Like |Link to Comment
  • Buy Apple Stock Before Earnings (Under One Condition) [View article]
    Well said. Seems like the hottest question in town, doesn't it:
    Buy (or sell) before or after earnings?

    Noting that AAPL is a) anything but a stable, predictable business, and b) there's tremendous speculation about how to game "the day," it's nearly impossible to sift through all that and then out-guess everybody else.

    Were I contemplating whether to buy or sell AAPL, I'd want the fresh numbers and "the why," and then I'd decide. Naturally, I'd stand a decent chance of then buying into a higher price, or selling into a lower one, than had I committed prior to the day. But I'd be making an informed, market-value decision, rather than a guess and a bet.

    Those of us who have ridden AAPL up have missed a lot of one-day trade opportunities, and have sat through lengthy periods as the stock bounced seemingly directionlessly within a range.

    And then we've made very good money.

    That approach doesn't seem broken, so it seems to make little sense to try to improve upon it now.

    As to Iron Double Cross Condors and so on, I'll have to concede all this quantum physics to rocket scientists who either have much higher IQs and much more time on their hands than I do!
    Jan 18, 2012. 02:13 PM | 2 Likes Like |Link to Comment
  • The $400 Question: Should You Buy Apple Ahead Of Earnings? [View article]
    What makes your analysis most valuable to me, is that you seem to remember that every decision is unique and personal.

    I knew (believed, was convinced, whatever) last summer that I coul exit my AAPL long and come back to it in early Jan, and have missed very little in the interim. I was right - even though I didn't actually do it.

    I suspect one might similarly do all right in the "timing game" by exiting next week and coming back in at some point in the future. I further suspect that one could add some incremental return with your options strategies.

    However, these paths would be a poor match for me personally.

    My first purchase was at $30, and I sweated it. I worried the same when buying more at $200, $300, and even $360. But the investment thesis - based on expected market penetration rates and timeframes, and new product innovations - continued to make sense and the company has generally over-delivered.

    On the same basis, I have little question about a $550 price for the shares, aside from when, exactly. So, as long as AAPL management continues executing (and I will certainly be watching closely), I'll sit on my shares and lose little sleep over the ebbs and flows of the periodic trading ranges, and any missed opportunities from out-guessing all the other guessers.

    As you sagely advise, how one approaches this investment decision, or any other, is a very personal matter. Thank you for sharing your enlightening thoughts.
    Jan 10, 2012. 09:32 PM | 2 Likes Like |Link to Comment
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