The Stock Market and Investing

circlew

Yes, I remember your target announcement (particularly the underlying reasons) and your extremely insightful financial analysis that supported your estimate.

Thanks for all of your very enlightening input here.

Regards,
OW

fintail

Unfortunately, gas prices are unrelated to the PIGS malaise - it's a lot deeper than that. So deep that the odds of us becoming like Greece are a lot less likely than some doomers wish to believe.

tagman

Len...

Be assured... it is not a competition. Sorry if it appears to be like that.

We do, however, often give our different perspectives here on the forum, and I believe it is good to see how well they pan out... as it represents credibility. When we make significant posts, their accuracy can affect some of our investment decisions. I believe you are an expert in business and have an unusual ability to understand valuations. I pay close attention to your posts. If I attempt to throw darts at your perspectives, it is not motivated by competition... it is motivated to determine just how accurate you will be... because you might motivate me to buy more shares.

Recently, for example, you have made a case for Microsoft shares, and I have looked into it. I am not sure I will buy, as you did, but your posts have significance, in my book, and I respect your views very much.

So, when I throw darts at them or challenge them, you must understand that I am doing so as a process of refinement rather than competition.

Also, I do not want my posts misunderstood. Especially as it relates to investing strategies. For example, I do not want to be misunderstood, as it relates to the differences between "trading" and "investing".

I certainly and sincerely apologize if I am misunderstood on any of this, because the last thing I want to do is offend you or have you think that I disrespect you in any way. Truth is, I think the world of you, and Charlie also, and the rest of the regular participants here.



TM

robr2

Tell that to Greece and all those other countries going broke.

$8 gasoline isn't the reason why those European nations are having problems. That lies in the over extended banking and social systems.

Nice try.

houdini1

Social systems? Don't you mean socialism? Higher and higher prices and taxes are one of the symptoms when socialism runs out of other people's money and the death spiral accelerates.

fintail

Yet other places with what self-titled capitalists will call "socialism" don't have those same crises right now.

kyfdx

BTW - Apple jsut sent me a confirming e-mail that the iPad will arrive tomorrow on the 16th.

Tomorrow is the 15th... the iPads get delivered on Friday..

cyclone4

I can't wait until Len gives us the lowdown on the new iPad after he plays with it for a bit.

I am going to own one but it may take a month before the lines go down enough in the local Apple Store.

ljflx

Yep - my mistake. It's coming on Friday. Mabe the orders put in a few days after mine are the ones that got pushed back to the 19th.

ljflx

No problem Tag - We're good.

The case for Apple at $1,000:

http://www.fool.com/investing/general/2012/03/14/the-case-for-apple-at-1000.aspx-

ljflx

Apple pushing toward $600 in early morning trading.

IPad review from the NY Times:

http://www.nytimes.com/2012/03/15/technology/personaltech/the-new-ipad-is-much-t- he-same-only-better.html?_r=1&scp=1&sq=New%20iPad:%20A%20Polishing%20of%20the%20- Old&st=cse

tagman

Nice little dip this morning. Check the charts. I bought a ton at $585, and then I resold it for a profit of a few grand... within minutes!!

Again... this is "trading", not "investing"... so, my disclaimer to all here... "Do NOT try this at home, may result in serious injury" ... LOL.

I think it is entirely possible for another dip or two to happen today, but not as sure as the first one.

Thanks for the link. Most reviews are VERY favorable. The retina display on the iPad is something that apparently needs to be seen to be believed... it is reported to be breathtaking. You are lucky to be getting one tomorrow. I might stop by the Apple store tomorrow and see if the line is short enough to consider it.

EDIT: I just heard a couple of guys on CNBC (one of whom is that idiot, Cortez) talking about "shorting" Apple. One guy was suggesting that it would get crushed if the overall market declines. Another suggesting that it is overbought. How do these guys keep their jobs?

EDIT 2: I am on the lookout for another intra-day dip, to take advantage of it.

EDIT 3: Hope some of you took advantage, and if you didn't "trade" the dip, at least maybe you simply bought extra shares at the session pullback to hold them LT.

TM

cyclone4

EDIT 3: Hope some of you took advantage, and if you didn't "trade" the dip, at least maybe you simply bought extra shares at the session pullback to hold them LT.

I bought a measly 7 shares (since that's all the free money she had) for my wife's account with the broker at $5.83 and change. I obviously did not buy the low so far today, but so what! Today's high in AAPL will be surpassed by a lot in the next few days or few weeks.

tagman

Awesome Charlie!

Those shares you bought at $583 are $17 under the already-established high of today's session.

After I had successfully "traded" the first round very early this morning, I later bought a bunch more near the session low, using margin, and flipped those shares. I was honestly scared, however, that the share price would go too low for me to save my [non-permissible content removed], but in the end, I flipped them for another gain.

EDIT: It would not surprise me if we all get another opportunity... so I am keeping my eyes on it closely.

EDIT 2: Just happened... I bought and flipped again. :surprise:

EDIT 3: Whew... I am exhausted. That was a roller coaster. I am not going to do that again for a while... too stressful. Anyway, on a day that the stock lost $4/share, I came out nicely ahead, so I guess it was worth it.

Hope you are enjoying the family visit!

Anyway... good work.

TM

anthonyp

Man you nailed aapl this year.....a great gain for all that held it through the rough times.....and as the say a `rising tide lifts all ships`also appears to be the case this year for the market in general, so I am happy Tony

tagman

Tony...

Let me add to that a personal thanks to both Len and Charlie... because I am glad to be back in the market, even though it is at a modest level compared to my former investment level.

They have both consistently been VERY positive about this stock, and Len has backed up his perspective with good data. Because of that, I finally decided to invest in the stock market again... although I am only investing in AAPL at this time.

I think today's session represented one of those "dip" opportunities for AAPL, like I have been posting about recently, although this one was quite volatile and was moving around like a roller coaster. There might be more opportunities ahead, because the stock moved up sooooo fast earlier in the week, that it is catching its breath, but today was certainly a nice move downwards from a $600.01/share session high to a $578.55/share session low... a nice $21.46 per share "dip" opportunity.

TM

ljflx

Glad you didn't sell Tony. I know you were close to doing it the last time we exchanged posts and that was when the stock was in the mid 400's. My whole basis on the stock is simple. The growth is too much and the cash hoard is too great and jumping too fast for the stock at the prices we've seen it at. By year end they may well have $160bln in cash. If the market cap is "only" $600bln then what I call the "trading market cap" in the company will only be $440bln. That'll make Apple be trading at an absurdly low 8X op income. And that's with a $600bln market cap - about 10% above where we are now. So even after a 45% or so run-up this stock is way too cheap. The only thing that may hurt it's price rise is the fact that it already rose steeply. But that's happening because the price of the stock was way too low for far too long vs it's growth and dominance.

Here's another way to look at it. If the stock price froze where we are right now it would take Apple about 5-6 years to stockpile enough cash to just buy itself back and that's assuming modest 10% growth in earnings. Just the ability of the company to earn the cash it does every year has to spur on 10-15% growth in share price even if there is no earnings growth.

anthonyp

Len Last year when I started to build a position in aapl, one of the sharp declines hit the levels I set for myself, and therefore I took my loss.....I purchase a very modest amount later, but it really is meaningless in relation to what could have been..

I fortunately have built `my house` already , and now I practice a defensive conservative posture.....There are many opportunities for those of you that have `time`, but for me I need to be cautious ......I remember 2008 or there about, and that made the saying ` you can loose half tomorrow` a rememberable phrase..

You have been absolutely right `this year` and I personally think all that have purchased and held to `deserve` the fruits of the payout after such a tumultuous year as we had last year Tony

cyclone4

Tony,

I've said this before but it's worth repeating: You are a very kind and overall wonderfully human being. We need many more people like you in this world.

anthonyp

That is very kind .. You can`t say it enough Thanks Tony

circlew

What about IBM ($206/share - up 12% ytd)?? JK, AAPL is the hot stock in the world at the moment and you are correct in the strategy you are on for your style. Now you have great insights to the trading techniques which allow you to prosper on the daily/weekly trends. Kudos to you!

My wife's IBM investments are the big earners over in my crib at the moment. She acquired most of the shares around $70. :shades:

Regards,
OW

tagman

Thank you.

I recall the diligent hard work required last year that kept me glued to the computer practically around the clock, because I was actually profiting in a "down" market. If I had stayed with it when things turned to an "up" market, I would have done extremely well. But I quit and lost out. Not very smart of me.

So, I will take the kudos for having the ability and insight you refer to, but I was an idiot for not using those abilities at the right time when the market finally took off.

Honestly, if it hadn't been for Len and Charlie, I don't think I would have gotten involved in the market again at all. So, I think it is accurate to say that a person's God-given talents or abilities are meaningless unless put to good use.

It would be easy to suck up and enjoy the compliment you have given me, but as a guy that is obviously insanely driven to deal with "truth" and what is "correct" and "right", I prefer to put your kind words into honest perspective, as I have done.

Anyway... Apple is a rare and unique story in our lifetime, for the history books. And, what I love is that we all get to watch (and experience) the incredible Apple story (and it's wonderful products) unfold. But, the company is not perfect, nor immune... so stay tuned... where this story ends up is still many more chapters away.

Thanks again.

EDIT: AAPL hit a low this morning of $578, and I bought shares within pennies of the low, and then flipped them for a quick gain of a couple grand... all within minutes. :surprise:

TM

tagman

Just stopped by Apple store. No line. Bought two iPads... black for me, white for wife.

Will play with them tonight.

TM

cyclone4

Well guess what TM? I did not think is would be possible, but I also picked up a black, 64 gig, 4G ready iPad this morning at a Best Buy store in Seattle. My son and I decided to give it a try since we figured the Apple Store would have long lines. We got to Best Buy 20 minutes before they opened at 10 AM local time and we were second in line. There was only one minor hitch. I wanted a Cyclone (Iowa State) red smart cover, they did not have this color in stock. So we will try to pick one up from the Apple Store this afternoon.

Right now we are at a mall in Seattle, but I can't wait to set up the new iPad later today. GO APPL!

tagman

Charlie...

Congrats to both of us....

Frankly, it worries me that there was absolutely no line whatsoever. I expected some type of wait.

BTW, we each bought the same version of the device. Verizon 4G-ready, with 64 gigs of storage. My wife also got a desktop aluminum Apple bluetooth keyboard and dock, as well as the camera connector kit.

I am going to wait on a case until I have more time to look at the options.

Good luck!!

TM

robr2

Frankly, it worries me that there was absolutely no line whatsoever. I expected some type of wait.

There were lines at many stores. London had a 4 day old line. There were 200 people in line at the Boston store. No line at the mall stores that I know of around here. I guess early adopter, Apple fan bois don't wait outside malls.

gagrice

I have played with a Mac that has that aluminum bluetooth keyboard and touchpad. I really liked it. Almost enough to convince me to buy an Apple computer or iPad. Still waiting for perfection in a tablet with GPS.

gagrice

The iPad gift for Dad!

http://www.wimp.com/dadipad

ljflx

In NYC there were people that waited 5-6 days on line in the hub Apple store. They also interviewed a guy that flew in from Brazil and spent $1200 on airfare to get his iPad (he says it'll be 3 months before they have them there) and still another person that quit his job so that he could be on line for days.

gagrice

Those people all have deep-seated psychological problems. They should be spending that money on a Psychiatrist.

cyclone4

Well, I brought mine home to my son's place and I set it up in only a few minutes. I had some concerns about how to transfer all the data from the original iPad to the new one. However, it turned out to be easy. I first synced the old iPad to iTunes on the laptop. Then I plugged in the new iPad and it transferred the data in a matter of a minute or two. I now have a fully operational new iPad.

I watched the last 5-6 minutes of the Missouri/Norfolk Sata game on the new iPad by downloading a free app (It did cost $4.00 to get access to all the NCAA games) and I must tell you that the video streaming quality was unbeliavably good. The resolution had to be at least 720p if not 1080p. It is an awesome experience.

Btw, I was happy to see Mizzou lose to a 15 seed for two reasons: 1. They are deserting the Big 12 to move over to the notoriously cheating Southeast Conference. 2. The media will not show us the 2001 ISU Cyclones losing to the 15 seed Hampton every time around this time of year. Instead, they will now be reminding everyone about the Mizzou choke this season. A lot of people had Mizzou making the Final Four. I love it.

tagman

Charlie...

I spent nearly two hours setting up the iPad. It should have taken minutes. The device insisted my password was invalid... but finally accepted it, after countless error messages, and failure messages. Then, it continued to have difficulties and refused to run properly and would pause unnecessarily. Then it would run great, but not for long.

I just left the Apple store & returned everything out of frustration and disappointment. I cannot believe my experience was typical. I am a computer whiz, so I know the device had to be defective. My wife said she didn't even want to take hers out of the box.

Maybe we will try again some other day in the future. I just don't know right now.

TM

cyclone4

Wow! Sorry to hear this about your iPad. That's hard to understand why you had this difficulty. I'm not at all a computer wiz and I did not have any problem at all.

I forgot to mention that the Apple Store was completely packed with people. There was no line but they had receptionists at the door. It was just about getting to the point when they would not allow any more people in. Of course, all I needed was a red smart cover so it only took me a few minutes in the store. I would say that for a Friday afternoon at 2:00 PM local time, it was very busy. The employee did tell me that there was a line at this store in the morning.

tagman

I suspect the device was a rare defect, but ithe experience was too disappointing... a huge letdown to put it bluntly.

BTW, the store was even less busy when I went back. Strange.

TM

tagman

Gary...
That video is hilarious.
After my experience with the iPad yesterday, that would be a better use for it... LOL.
TM

gagrice

I watched it 3 times to get all the facial expressions. Too funny. It is possible you got a dud. They push for production in those Foxconn slave factories you know. The price of a refurbished unit is not that much less. So they have no problem exchanging. I don't imagine they are thrilled to give a person their money back.

tagman

It is possible you got a dud.

There would be no way that Apple could survive if the product I got was typical. Something was definitely wrong with it. It was ridiculous.

I don't imagine they are thrilled to give a person their money back.

Getting a refund was as easy as any refund I have ever gotten. The two iPads and accessories were about $2,200... and from the way the guy acted, it could just as easily have been $20 bucks, or even $10 grand. It was courteous and quick.

I was most surprised that the store was not busy.

After the whole experience, I asked my kids last night about their experiences with their Apple products. The each have their own loaded MacBook Pro and the iPhone 4s. They don't use their iPods any more. They both reported only one issue with the MacBook Pro, and I was already aware of it... there is an occasional "communication error" with the printer. I have previously checked with the Apple people about it, and it is a typical bug. Other than that, their MacBook Pros have been awesome, and they love them.

The iPhone 4s... they each reported some more serious issues. My son's has locked-up (total freeze) now and then, even to the point that a cold re-boot was almost impossible. My daughter's has had a very strange intermittent issue that it requires a phone call to be dialed twice in order for her to hear the person she is calling. Yet, in spite of the glitches, they still love their iPhones.

I have decided that I am going to look at alternatives to the iPad. I am not sure what that might be. Perhaps a different tablet, or perhaps a notebook. Just don't know yet. I think I'll go and look at some other products over the next days... everything from a Kindle to a powerful Alienware, and everything in between. And, I will look at the iPad again, and assume that if I were to get it again, it would not be defective the next time around. But, I am definitely now more open-minded to Microsoft and Android devices again.

TM

robr2

Those people all have deep-seated psychological problems. They should be spending that money on a Psychiatrist.

But spending on that doesn't drive up AAPL.

kyfdx

1. They are deserting the Big 12 to move over to the notoriously superior Southeast Conference.

Fixed it!

ljflx

Good story here. The lines at Apple stores were actually longer and the traffic greater than anyone expected. I've read numerous reports now that the iPad can sell 130-150mln units in 2013. That is more than double the 2012 amounts and add in the iPhone5 potential. The incremental profit of every unit is greater than the unit before at these levels so margins will rise further. If there's going to be a pull back here than it won't last long and at the same time I can't imagine the market rising and Apple falling. Stocks overall are still pretty cheap after this run-up and Aplle given its projected unit sales is dirt cheap.

http://beta.fool.com/apinkasovitch/2012/03/17/will-apple-be-worth-1-trillion/296- 3/?source=eogyholnk0000001

ljflx

I am always amazed at the stories you read about folks waiting in line for a hot item. It's been going on forever but my first real memory of the craziness associated with it were folks lining up for days for the Beatles double white album. Ironically on Apple records - a different Apple of course.

ljflx

It's beautiful Gary. The resolution is phenomenal, the wifi downloading is fast and it took me about 5 minutes to set it up, if that long. It would have been quicker but I forgot to accept the user license initially. Pictures on the iPad are abolutely outstanding. I'm starting to download apps now and am looking for directv and cablevision. One added bonus is this gives me a 10" HD TV set in any room I choose to be in.

tagman

The lines at Apple stores were actually longer and the traffic greater than anyone expected.

Len,

The lines for the new iPad were smaller than the lines for the prior iPad2. This is largely due to the fact that online pre-orders were not possible with the prior model, and folks had no choice but to stand in line. With the current model, there were online orders that were "off the charts". I think we will probably hear a report on Monday that will suggest about 1 million iPad units were moved on launch day (including the pre-orders).

The incremental profit of every unit is greater than the unit before at these levels so margins will rise further.

That statement, if I understnad your point, is also in contrast to a recent report that the iPad has a greater cost to build than the prior model, but the retail price has not increaed, and therefore the margin is lower on the new iPad than on the prior model.

So... what we have here is a new product with a smaller profit margin... however, it is anticipated that the new iPad will outsell the prior model because the overall adoption of tablets is on the rise anyway. So, from THAT perspective of anticipated sales volume, we can expect to see growth in revenues.

I agree that the stock is still undervalued, especially if we look forward and all goes according to plan without any serious hiccups.

FWIW... during the brief times my iPad actually worked, it was gorgeous and quick. My only complaints beyond the fact that it was a defective unit, was that it was a bit uncomfortable to hold, and the screen was HIGHLY reflective and fingerprints accumulated at the speed of light. Would prefer an anti-glare coating for that incredible retina display.

Also... just to be fair... most of the other higher-end tablets on the market meet the technical specification for "high-definition". Apple's retina display goes beyond that. So, other tablets can also be carried anywhere and offer a high-definition viewing experience... perhaps not quite as gorgeous as that on the new iPad, however.

Lastly... Apple is smart to stagger the announcements of product improvements. Next up... expect the next evolution of the popular MacBook Pro to be announced in the near future, and it will probably be more powerful, slimmer, and lacking an optical drive. After that, the MacBook Air will probably be announced with some new improvements as well, and possiblly have an expanded line with an additional larger model, perhaps a 15" display variant.

EDIT: I have some free time today... I might go take a look at some different products, including another look at the iPad again. Might buy something... we'll see.

TM

ljflx

That article said the lines were longer than expected so I'm going by that. I don't know if that expctation was greater or less than iPad2 though. Disagree with you on the unit costs. The unit cost may be a tick greater individually but when you spread more and more units produced and sold you leverage all the other costs of the business further (especially their store costs, development costs and admin costs) and the overall costs decrease as a percentage of revenue allowing overall profit margins to increase. Perhaps they are increasing at a decreasing amount but they aren't about to decrease with this level of volume on a highly profitable unit. As well the iPad leverages the development costs of the iPhone so it is very profitable unless you allocate costs to it. But that just confuses the financial presentation of the leverage you are getting within the company. This is a game I had to fight against all my life as a CFO. You get a brand manager or EVP that wants his product to be more profitable looking. So he wants costs allocated to another product that was leveraged from it. I once showed in a presentation within my company how I could have made a product look like it's losing money when without the allocations the product was profitable and with developing sales would accelerate rapidly. If I had killed the product because of allocations I'd have been less profitable overall than before. So allocations are often the worst policy a company can have because the cost don't go away if you kill a product you allocate them too. I used to do allocations off the P&L's purely for pricing purposes.

gagrice

I don't think anything on the market today can compete with the new iPad. The Asus Transformer Prime does not live up to the hype. Several bugs including Wifi and GPS issues. I don't think Android 4.0 is ready for tablets yet. It will narrow the gap when it does get the bugs worked out. I will have to go check out the iPad when the dust settles. I do not wait in lines well. The new high resolution of the iPad does have my interest.

ljflx

Well, I brought mine home to my son's place and I set it up in only a few minutes. I had some concerns about how to transfer all the data from the original iPad to the new one. However, it turned out to be easy. I first synced the old iPad to iTunes on the laptop. Then I plugged in the new iPad and it transferred the data in a matter of a minute or two. I now have a fully operational new iPad.

Charlie,

Same experience here plus it automatically loaded all my iPhone apps. I'm married to Apple with phones and iPads now. But I've created a monster here in the last two weeks. My wife now wants one plus she now wants an iPhone as well.

anthonyp

When I purchased the ipad 2 , I got the person in the aapl store to hook it up and get it running.....I did have problem with the mail, but the guy got it to work right there in a Apple Store, I had to pay for it first, then he got it hooked up and running, so if it didn`t perform as expected I could return it right then and there...It`s been fine since

And further I have saved alot of money with Charlie`s suggestion to use regular gas instead of a premium grade...that pays of regularly

You may know alot about Microsoft and computers, but I know Apple is reliable, and all of my problems lie with the carrier when they happen....Hope you re-try the Apple, although I suspect you will take a bit of time to `point and touch a screen` .....I found the best way to do this was to get in the bed, and not have any other option other than the i/pad......Tony

tagman

OK, I'm giving it another chance. Went into Apple store again. Crowded today, it's Saturday. Got a rep to help that knew his stuff. He said he was positive I had a defective unit. Rare, but happens. Even brand new iMacs can blow a hard drive within hours. As they say, sh-t happens.

Anyway, got a terrific demo, bought another one, including a dock & Bluetooth aluminum keyboard. I will report back later.

Len... I will post article to support my prior post. Lines were indeed shorter due to the "off-the-chart" online pre-orders that were not possible with the prior iPad2. Also, cost to build is indeed higher, more than a "tick", due primarily to that gorgeous retina display.

Anyway, enjoy your ipad & I will report back later with the outcome.

TM

cyclone4

It's beautiful Gary. The resolution is phenomenal, the wifi downloading is fast and it took me about 5 minutes to set it up, if that long. It would have been quicker but I forgot to accept the user license initially. Pictures on the iPad are abolutely outstanding. I'm starting to download apps now and am looking for directv and cablevision. One added bonus is this gives me a 10" HD TV set in any room I choose to be in.

I second that! This is a beatiful piece of technology.

ljflx

The article I linked didn't say lines were longer than they were for iPad 2. It said lines were longer than they were expected to be which is going to translate to sales exceeding expectations..