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Comments
Would it make sense for me to cut my loss, and then buy the heck out of it after it declines? That would give me a profit after it returns to the current level. Otherwise, after all the many months it could take to return to the price I own it, I would only break even.
TM
First of all, you already know how I feel about a lot of the so called "analysts". Secondly, I doubt AAPL will dip to the $450 level. With the iPad3 coming out soon as well as the iPhone and iPad being available to many other huge population areas (e.g. China) of the world, their sales will continue to soar.
Anyway, it is very difficult for advise that you should sell with the idea of buying much cheaper. What if you sell here and it does not go much lower? Then what? Maybe the best course of action would be for you to buy a little more if it drops another $10 or so instead of selling all you own now with the hope that you can buy it a lot cheaper. Btw, I very much doubt that it will take "many months" as you state it for AAPL to return to $502-507. Heck, it could do that tomorrow or let's say withing a week or so. This is my opinion anyway. We need Len to chime in with his opinion.
Oh yes, one other thing: "Patience [non-permissible content removed], patience", cried the master to the donkey.
TM
Invest. No trading on AAPL afaic.
Regards,
OW
Did you buy some at $10 lower this morning? Obviously AAPL is acting a lot worse than the Dow at this point, but I am confident that will turn around soon.
My bigger concern is AMZN. I own it at a loss from yesterday and today, and I want to get rid of it, to free up some money to buy more AAPL in the future... I shouldn't have bought AMZN. So. I'll wait to get even on it and then be done with it... I just don't know when that will happen... hours, days, weeks, or months.
After that, it's only AAPL for me. I don't want to be too much in the market. I have my eye on another condo investment.
I'm just relieved to see AAPL rebound like it did.
TM
I also own a little bit of Amazon with the broker account not on the E*TRADE accounts. The Kindle fire has done nothing to help Amazon. If anything it has hurt their bottom line. I'm thinking of telling my broker to take our losses and run with Amazon. We should likely buy more Apple. The good thing is that I only own 50 shares from around $200 a share.
I assure you I am not going to day trade. I just want to be rid of the AMZN, and own AAPL at a decent price and let it ride. I don't have the stomach for any day trading any more.
TM
Unfortunately last year I never got to build the position I wanted too....although my belief in the company--with Steve--has never flagged...I use their products, and frankly, with the integration of all their products, I think it will continue to prosper..
I don`t think you will need any luck if you just buy a reasonable amount and hold ....I seem to get greedy and buy too many shares then get too skittish...Beware of that trap....Tony
Build a little at a time.
Regards,
OW
I had my eye on another condo, but I learned today that someone beat me to the punch, and it has gone into escrow. My first deal did in fact officially close escrow today, so I guess that I am officially a landlord for the first time in my life.
My landscape project at the house is moving along, but at a snail's pace. The basketball area is done, much to the delight of my son and his friends, and the firepit is finally being worked on (at the half-way point), half of the plants are in, but no progress on the barbeque yet... and no progress on the whirlpool spa yet either. The whole project was estimated to take about 6-8 weeks, and I believe it has now been almost 4 months since we started. Only good thing about that is I don't have to pay as quickly... haha.
Thanks again for your advice on AAPL. Rest assured that I am going to listen to Charlie, and you, and Len, and OW this time around. I am absolutely NOT going to day-trade AAPL. At this moment, I own $100,000 worth, and I realize that some of the heavy-hitters here own a lot more, but for me it's my comfort zone at the moment... and I will only buy more when there are good opportunities. Hopefully Charlie will give me his opinion when to buy more.
TM
Now, regarding AAPL, here is an extremely interesting piece that we need to get Len to decipher regarding the valuation of Apple. Looks like a change in accounting rules around the time the first ipad came out could point to a clue but not sure. Here is an excerpt and the full link following.
On Dec. 31, 2009, for instance, Apple had a market capitalization of about $191 billion. Using the fiscal 2009 earnings that Apple initially reported, its price-earnings ratio that day was about 33. Using its restated numbers, the ratio would have been about 23. My guess is a similar effect is occurring today: Had it not been for the rule change, Apple’s P/E ratio would be higher, because the “E” would be lower.
“It would appear that the market continues to consider a significant component of Apple’s revenues and gross profit to be presently unearned and not deserving of a normal market multiple,” said Charles Mulford, an accounting professor and director of the Financial Reporting and Analysis Lab at Georgia Institute of Technology in Atlanta.
Apple was one of a handful of companies that lobbied the Financial Accounting Standards Board for the new rules in 2009. The impact for Apple seems to have been greater than for most others, probably because of the nature of its products. Dell Inc. (DELL) said the rule switch had no material impact on its results. Microsoft Corp. (MSFT) and Oracle Corp. (ORCL) said the same. Hewlett-Packard Co. (HPQ)’s earnings got a slight boost.
The FASB rule change had two main parts. One related to so- called multiple-deliverable arrangements, while another covered software sales. When Apple sells an iPhone, for example, the hardware and software are delivered at the time of sale. Other deliverables include the rights to future software upgrades and other features.
Apple’s Stock May Not Be as Cheap as It Looks: Weil
Regards,
OW
Pure BS and the guy is acting like a nerd instead of a businessman. What he wants Apple to do is hold back revenue and amortize it over the life of a phone or IPAD or any gadget they sell. He's actually implying that Apple should recognize as revenue 1/12 a month of the sale, the same way a magazine recognizes revenue over the life of a subscription. That's lunacy. Apple is essntially selling hardware, collecting all money up front (so it's rev matches its cash collected), and the fact that it upgrades software over the life of the product is a tiny part of its cost and most certainly not what the consumer is buying. A magazine has huge future costs in the subscription it has to fulfill and on top of that owes the buyer money back if he cancels. Insurance works the same way which is why insurance companies now weight the first half year of insurance a lot more heavily then the latter half. So you can see that Apple is as different from a mag subscription sale or an insurance sale as you can get. Yet he wants them to recognize revenue like they are selling mags or auto insurance. The best argument you can make is that Apple should recognize 90 or 95% of its revenue from the sales of its gadgets and hold back 5-10% for it's software upgrades. But that's a difficult argument for any gadget maker especially one that collects 100% in cash up front. Even pure software sellers recognize 50-80% of the sale as revenue up front because that's the percentage of the goods you are getting with the license. The balance that is then spread over the life of the license is for product support and software upgrades. But Apple is a gadget company much more than a software company. So if you are dealing with a $500 IPAD and your weighting of the price is 80% hardware and 20% software then you'd recognize on delivery $480 and hold back $20 for client service/software upgrades. The $480 is $400 for hardware and $80 for 80% of the software component. The $20 would be amortized most likely over a 12 month period. So a sale in January would almost all be 100% recognized because you would be done amortizing the $20 by December. A sale in December would have 11/12ths of $20 pushed to deferred revenue. Year to year growth would not be impacted because the deferral would be comparable each year. If investors are stupid enough to believe this then I have some real valuable dust in my basement to sell them.
It is to say the least a very weak argument. Apple can almost consider the support cost as marketing and it could also argue that the software and client support costs are part of the warranty of the product and are already expensed in the P&L. An auditor would have to show the incremental new support costs Apple has from expanding sales. That cost is pure incremental and is going to be such a tiny part of sales - maybe and this is a stretch - 1% of sales. remember the ideal thing accounting rules seek is to match revenue with expenses of that revenue and to ensure you have a uniform 12 months of revenue and expense in your P&L. I've had auditors that will allow an expense to be deferred, even if it should get recognized, just to avoid having more than 12 months of expenses in a P&L. Naturally with revenues they have to show clearly that there is no danger in collecting them and in the case of Apple they are already collected.
This is the type of guy that would bless Enron's revenue recognition and great earnings (because it fell within GAAP rules) while the company is a day away from bankruptcy. If Apple did what he wanted you'd have cash running 6 months to a year ahead of revenue and you'd have a huge fulfillment liability in deferred revenue that supposedly (like a magazine) represents cash you'd have to return to the customer if they cancelled. But of course you can't cancel an iPad od iPhone. If this guy is teaching kids this we really have a problem with accountants like me becoming serious business people at some point in their careers. As you can tell from this lengthy response - don't get me started with clowns like this!
BTW - if you are looking at a Microsft, which I loved at $25 earlier this year and which I bought based on their more aggressive posture, or any company that heavily defers revenue don't just look at the P&L. Look at the deferred revenue (usually you have to go to the 10K or 10Q) too and add both the revenue and deferred revenue and compare that to year ago periods. That way you are getting at the real sales growth. A mix of products that have different revenue recognition methods could lead to different revenue growth than sales growth.
I don't know where we would all be without you here. I mean that in all sincerity. I still say, it would be SO awesome if you would be a guest on CNBC some day.
I agree with Charlie about you being on CNBC... that's if you don't mind lowering yourself... hahaha. Seriously, is that something that could happen? Afterall, you clearly have a lot of knowledge that can benefit a lot of people.
TM
Thanks for the compliments. It's really appreciated. CNBC though is not in my plans. Explaining accountant jargon is never easy. I try my best to simplify it. Plus basic accounting and the ability to value a business are two different things. Anyway I hope that I came across clearly. It's important for accountants to understand business and vice-versa. Most CFO's are excellent business people and the ability to understand the business concepts coupled with deep knowledge of accounting gives one an advantage over most people. Generally people that are good in business are lousy at understanding accounting and accountants are less interested in business than they should be and are more bent to analyzing numbers, general rules and conservative practices of them.
2013 LX 570 2016 LS 460
In a filing with the U.S. regulators, the Palo Alto-based company said Schmidt adopted the Rule 10b5-1 plan last November and could begin selling shares this month.
Schmidt, who stepped down as Google's chief executive last April after a decade of "adult supervision," could bring down his voting power on the company's stock to about 7.3 percent if he sells all the shares under the plan.
As of December 31, he held 9.1 million shares of Google's Class A and Class B common stock -- wielding about 9.7 percent voting power.
If Schmidt sells his shares under the plan, his overall stake would fall to 6.7 million class A and B shares -- based on Google's outstanding shares as on December 31 -- or about 2.1 percent of outstanding capital stock.
Schmidt, who led Google starting in 2001 to bring more management experience to a then-fledgling company, became executive chairman of the Internet giant's board after stepping down.
Google shares closed at $604.64 on Friday on the Nasdaq.
Is a $1.5 billion year obscene? My guess is he is trying to beat a rise in LTCG tax. If he lives in CA he will pay about 25% at the current tax rates.
REUTERS — 3:09 AM ET 02/20/12
By Melanie Lee and Donny Kwok
SHANGHAI/HONG KONG (Reuters) - Wal-Mart Stores Inc said on Monday it is taking a controlling stake in Chinese e-commerce firm Yihaodian, as the world's largest retailer seeks new revenue sources to fend off rising competition in the world's fastest-growing major economy.
Wal-Mart said in a statement that the fresh investment into Yihaodian will take its stake to around 51 percent and will be subject to government regulatory approval. Wal-Mart did not provide any financial details of the deal and it was not immediately clear how much stake it has now in the China firm.
"E-commerce has been booming for years in China and in many other sectors, and it has only been very recently that it is for supermarket type of goods," said James Roy, senior analyst from Shanghai-based China Market Research Group. "It is a good investment for Wal-Mart as it has a lot of potential."
E-COMMERCE SURGE IN CHINA
With 173 million Chinese people shopping online, China's e-commerce industry is expected to surpass 750 billion yuan ($118 billion) in gross merchandise value in 2011, more than the gross domestic product of Vietnam. It is expected to become the world's largest e-commerce market in 2015, Boston Consulting Group said in a report.
Another $118 billion to the current $419 billion. Walmart could become the first $ trillion company.
http://www.bizjournals.com/dallas/news/2012/02/21/rumors-intensify-about-ipad-3-- - display.html?ana=yfcpc
http://www.ipad-3-news.com/
Other Apple news:
http://blogs.barrons.com/techtraderdaily/2012/02/21/apple-china-telecom-offers-i- - phone-4s-in-3-weeks/?mod=yahoobarrons
http://bits.blogs.nytimes.com/2012/02/16/apple-mountain-lion/?scp=3&sq=apple&st=- - cse
I hope I don't jinx this move up once again like I did about a week or so ago.
EDIT: Man, great minds think alike
http://www.broadbandgenie.co.uk/news/20120220-apple-ipad3-rumours-ramp-up-predic- ted-launch-date-looms
As Barclays Capital analyst Ben Reitzes wrote in a note last week, "Apple is running out of realistic excuses for hoarding so much cash and we believe some of the recent moves in the stock is related to investors beginning to price in the expectation of a dividend as early as the upcoming shareholders meeting," Reitzes said. "We continue to believe Apple has the ability to easily pay a dividend with a significant yield (2% to 3% range) along with the ability to grow it over time."
Now investors are getting up their hopes that a dividend--or a stock buy-back--may be on its way. Such speculation helped drive Apple's shares to its latest high of $526.29 last week, with its annual meeting set for Thursday, Feb. 23.
Yet a debate rages on. This would be a major move that really might counter the legacy its famous co-founder wanted, after telling his biographer Walter Isaacson that he was willing to spend "every penny of Apple's" then--$40 billion in cash to protect Apple's intellectual property.
So as the board contemplates the big question, with the added dilemma of "What would Steve do?" hanging over the room, one possible solution might be to give shareholders a special, one-time dividend, rather than embark on a new tradition that Jobs would have despised.
Post said a special dividend could be an interim solution for the company. "If they want to they can always come back in a year or two or three, they can do it again, but they are not committing themselves to a regular dividend," he said. "It would be seen as a pretty big departure from the Jobs era." It's a tactic used by Microsoft in 2004, when it announced a one-time dividend of $3 a share, to return some cash to investors.
A one-time dividend is obviously not very popular among most investors.
"I think that Apple's stock is and should be like Apple's sales and products, insanely great," said individual shareholder King Lear, who spoke up at the company's annual meeting last year. "Defined quarterly dividends would increase the value of the stock in addition to its incredible capital growth." Lear, who is retired, said a dividend would have a stabilizing effect on Apple's shares. It would spur dividend-oriented investment funds to buy Apple's stock, which could help its shares rise and volatility could go down. "Apple's stock is used a lot for short-term gaming by options people and high speed traders," said Lear in an email. "I think it would be nice to have a higher share of the stock held by long term investors."
But for growth you have a new ipad and you have this and this revenue has more and more incremental profits because it leverages already sunk SG&A costs.
http://online.wsj.com/article/SB10001424052970204909104577236660687752828.html?r- - - u=yahoo&mod=yahoo_hs
My thinking on the stock is very much like the good in this link:
http://blogs.marketwatch.com/cody/2012/02/21/apples-current-set-up-for-traders-a- - nd-investors/
I think any biding of time will be brief and is a buying opportunity IF it happens and I think Apple will have political pressure on it that can hurt it if it doesn't do something about that cash hoard. It speaks to great greed and a political outcry against it will hurt them a lot more than any of these labor issues - again IMO.
The combination of your CPA training and incredible business sense make you "one of a kind".
It is all politically motivated. I spend time on several very liberal sites. Apple is the poster child for all the ills of America. Liberal talking heads like to point at Apple for stealing jobs from American workers and giving them to China. I would be surprised if 1% of the people they put on camera even for the financial programs understand what they are talking about. They have a script and read it. I get a lot more useful information here than the financial blogs and sites. Thanks for keeping it factual.
The iPad3 is imminent, and it is very likely to be a truly powerful and competent device... one that will win over many people that have been on the fence about getting a tablet... and this is a huge untapped market.
In addition, there are other announcements around the corner, such as evolutionary improvements (and some predict revolutionary changes) to the MacBook Pro. There are also rumors about a smaller iPad... in the same way Apple previously announced the smaller MacBook Air, which turned out to be a very smart move.
We've also got Apple TV and other announcements that are forthcoming as well. And after all of that, the TRUE next-generation phone... the iPhone5... will then ultimately make its appearance, and THAT phone... the iPhone5... will be MUCH more significant than the 4S... with its bigger beautiful screen size to finally become a reality, and more powerful performance, such as 4G.
So, all in all, it's safe to say that the company has got plenty of predictable ammunition in store as well as some not-so-predictable surprises up its sleeves... all of which points to more and more people ready and eager to toss their money to Apple in exchange for techno euphoria.
TM
Obama's Dividend Assault
A plan to triple the tax rate would hurt all shareholders.
President Obama's 2013 budget is the gift that keeps on giving—to government. One buried surprise is his proposal to triple the tax rate on corporate dividends, which believe it or not is higher than in his previous budgets.
Mr. Obama is proposing to raise the dividend tax rate to the higher personal income tax rate of 39.6% that will kick in next year. Add in the planned phase-out of deductions and exemptions, and the rate hits 41%. Then add the 3.8% investment tax surcharge in ObamaCare, and the new dividend tax rate in 2013 would be 44.8%—nearly three times today's 15% rate.
Keep in mind that dividends are paid to shareholders only after the corporation pays taxes on its profits. So assuming a maximum 35% corporate tax rate and a 44.8% dividend tax, the total tax on corporate earnings passed through as dividends would be 64.1%.
http://online.wsj.com/article/SB10001424052970204880404577225493025537660.html?m- od=WSJ_hp_LEFTTopStories
You ain't seen nothin' yet. :sick:
TM
If you mean it as written, I feel sorry for the poor dude just standing on a street corner tossing bowling pins.
If you mean jugular, I feel sorry for the rest of us!
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What is amazing about the stock price is that it is surging after Steve Jobs death. All those years of worrying what would happen to the company after he died and how there'd have been a massive sell off of the stock are proving to be worthless.
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It's the occassional pitfall of allowing the mobile device to do the auto-word- completion or speech-to-text.
Say "weather", you might get "whether". Say "which", you might get "witch". Big difference.
But... I am sure you knee the meaning, and just wanted to have some fun with the error. Won't be the last, that's "four" (for) sure.
TM
I am sure he will find a way to screw those up too !!
2013 LX 570 2016 LS 460
I was so aggravated with the at&t I just did without a phone fro a week or so, and it was blissful ...Tony
I am going to honestly comment on the iPhone 4S. I am not worried about saying anything negative because I know that you won't misunderstand my intentions, and you will still love your iPhone 4S regardless of my perspective.
I am personally waiting for the iPhone5 because of the improved features it will have, and because I feel it's now too close in time to not just wait for it... and the current iPhone would be a step down from my EVO 4G, which is faster and has a much larger screen (4.3"), and other features not available on an iPhone. My big hands really appreciate the bigger screen in order to type much more easily. I can hardly type on that tiny iPhone screen without hitting two letters or numbers at the same time.
And, according to some recent market surveys, most people now prefer their phone display in the 4" - 4.5" range. They want all the advantages it offers... easier typing, better web-browsing experience, much better video playback, to name just a few. Apple knows this very well, and as a result the iPhone5 is almost certain to have an awesome screen within that larger size range, and recently reported to be 4"... but it's still early to be absolutely certain. That said, the current iPhone still has a terrific display, but it's diminuitive size is getting long in the tooth and when it makes the next jump in size, it's going to be a significant improvement, in addition to the jump in processing power and 4G capability, as well as possible improvements in battery life, graphics capability, and possibly even further camera enhancements, as well as improved physical design.
Be aware that an experience with the Droid is NOT the same as the experience found with other types of Android devices. Android phones are not all the same, and many people do not realize this. As an example, I recently met a women with a Samsung phone, and she was complaining about something it wouldn't do easily, and when I showed her how to do it on my HTC EVO 4G, we discovered that her phone didn't have the same capabilities, and its interface was slightly different and limited by comparison. This happens often because each manufacturer can overlay their own user interface on top of the Android OS, and as a result some of those user interfaces are better than others. There are subtle and not-so-subtle differences that can be annoying on some of the models. This is why the iPhone interface can be easier because it is always the same. However, what bothers me about the iPhone interface is that it is so limited in a few areas that deserve better. This isn't necessarily a bad thing, as it is actually preferrable to keep it simple for many people, but there are definitely times when I am thrilled to be able to make my phone do things that my kids can not do on their iPhones and they can only dream and hope. So, to be honest and fair, it is important to recognize that the Droid that you never liked could have been set up differently by you (to some extent), if you took the time to do so, but that it also had its own inherent limits that are not necessarily reflective of other Android devices.
I have to say, even after a couple of years now, I still love my HTC EVO 4G, and I have occassionally had these little comparison and competitive battles with iPhone owners... just for fun, of course. I show them the way I have programmed it to do things they just wish they could do. That's when the iPhone 4S owners always resort to showing off Siri, because at that point there's really not much left for them to do. A few of them get a little upset at the comparison, but most don't care at all, because they blindly love their iPhones no matter what.
It's amazing, isn't it?
So, yes, the iPhone5 is the one I will likely get, just like the iPad3 is on my radar. It's just too late for me to consider an iPad2 or iPhone4s when the next generation models are so close.
I also will explore getting an iMac for my desk one of these days, but honestly I now use my mobile device more often than my desktop... so, instead of an iMac, I might go with a MacBook Pro or MacBook Air. I still don't know. But whatever way it finally goes, I am seriously considering migrating from Windows to Mac, and join the kids... Along with millions of others who will finally give in and buy Apple, or upgrade to their next Apple product... helping to make sure Apple is the most successful and wealthiest company on the planet.
Lastly, who can not be so impressed with the synchronization and nearly perfect interconnectively between the Apple products?... I think it is ultimately one of the most important aspects of Apple products that will sway me to say goodbye to Windows and Android.
Anyway... before I forget... congrats!
BTW, just because I'm not sold on the iPhone 4S yet, I am definitely envious of your iMac! As I have posted before, I think the iMac is the single best desktop value in the world. Do you love it?
TM
Mine too, and I was trying to figure out why.
I have an original Samsung Captivate (galaxy S) and I haven't been very happy with it. I'm currently running gingerbread and while it's an improvement the phone still has annoying issues. I really don't want to switch over to Apple, so I may go with another Droid phone when it's time to upgrade in the next few months.
One thing about the Iphone is it sure seems to be a data hog. My daughter and I are both using 200mb data plans. I can turn off cell network data w/o issues on my droid, but she did that on her Iphone and after a day the phone completely stopped working. No calls or texting. We talked to ATT and determined the phone won't work properly with cell data inactive.
I can easily get buy with 200mb/mo but I'll likely have to boost my daughters data plan.
TM
It probably is, but my brother sells AT&T phones and I like to buy through him. Though as we keep adding phones, I still might be better off going through a different carrier.
BTW if you have or get an iPad you need to read this story and probably should buy this app:
http://www.nytimes.com/2012/02/23/technology/personaltech/onlive-desktop-plus-pu- - - - ts-windows-7-on-the-ipad-in-blazing-speed-state-of-the-art.html?_r=1&ref=busines- - - - s
And separately note this re cost of apps on an iPhone vs a Droid:
http://tech.fortune.cnn.com/2012/02/23/canalys-android-apps-cost-2-5x-more-than-- - - - iphone-apps/?source=yahoo_quote
Obviously they're not so hot in the personal computing area. It's not a bad product, but I'll never go there again. When something goes wrong with my laptop software- or OS-wise, I can pretty much beat my PC into submission. Not so with a Macbook.
(and yes, Tagman, I knew it was an auto-correct or speech-to-text error and just couldn't help myself.)
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What i do have problems with is the service provider at&t....They are heading down the road that I do not think they will survive....It`l take a long time, but they are really having problems that need to be addressed..Tony
I was all excited about the ASUS Transformer Prime with builtin GPS and it turns out to have issues that will not be resolved until the next model comes out.