The Stock Market and Investing

gagrice

Apple could make a deal to bring back the money at a reasonable tax point, with the stipulation they buy municipal bonds from downgraded states like California. They are a bit risky, but it would help out the states that have helped make them wealthy.

gagrice

I could afford a couple shares of BRK-A. If I had bought them September 2011, I could have sold and made an easy $80k. Ah, hindsight is so clear. Same goes for AAPL. It was selling around $350 Sept 2011. It will be interesting when Buffett dies. Most of the Berkshire stock will go to the Bill Gates Charity fund.

anthonyp

And he wanted it sold converted to cash and given away in a short period of time....I wonder if he has changed his mind about the liquidation in a short period of time?......I have always thought Berkshire would start to pay a dividend possibly shortly before he passed away....We are all the richer for being around during his lifetime......Sort of a surrogate father of the USA....and certainly someone I think of as Uncle Sam as I pay my taxes...:) Tony

fintail

Not a bad idea to encourage the repatriation (so to speak) of funds into the US. Heck, I would virtually eliminate the taxes if it was invested in ways that created benefit for those other than a few Wall Street criminals.

On that note, I checked my relatively modest (compared to you high rollers) retirement investments today - remember, I am an uninvolved saver, and probably hadn't checked the accounts in a year. Up 17% over the past year, not too shabby - I guess all of my choices weren't bad. Doesn't make me want to become more active just yet.

gagrice

17% is great. I think my two accounts would be close to that if I had not cashed out most of my equities last year. So much for listening to financial advisers. Though we could still get a correction. I think I will stay out for a while. I am well ahead overall. Don't want to get greedy.

ljflx

The problem with stories like this and charts like this is that they are in units with no respect to selling price. In dollars they'd probably look differently especially given that Apple had the biggest absolute unit growth on far pricier tablets. Amazon admittedly sells its tablet at a loss. It doesn't even give them away. It gives them and money away. Thinking it out that way their unit growth is disappointing. Samsung went nowhere. Apple went down in share because it refuses to lower price and sells its tablets at by far the highest price and biggest margins. It's not interested in chasing the bottom buyer. In dollars I'd bet Apple gained share and had by far the biggest year over year gains. The other category is the cheapest and most unreliable tablets on the market. I get e-mails for these at sub $100 (sometimes as low as $49) at least twice a week. No major player is chasing that market and one can argue it shouldn't even be counted. You can also argue that the iPod, which actually sells at higher prices than many of the tablets here should be included. So it's all about how you look at numbers. I look at dollars first and units second. Pulling an Amazon and price dumping has to gain you marketshare. But is it a good strategy to think it'll lead to sales elsewhere? Amazon barely makes money on those sales as it is, loses money lately on them and they are chasing the lesser financial qualified consumers.

http://www.forbes.com/sites/chuckjones/2013/02/02/apples-ipad-market-share-slips- -farther-below-50/?partner=yahootix

fintail

Of course that's just for the past year, which has been crazy and certainly isn't sustainable. Over the life of the investment, I think I am just under 9%, which beats inflation anyway. I've never dealt with a financial advisor, I don't feel like I have enough money to make it worthwhile :shades:

gagrice

I think the Amazon model is similar to the HP Printer model. Just get the printer on a person's desk then soak them for the Print cartridges. Apple soaks you for the iPad and the Apps both, so they are rolling in dough. My question is how that benefits the stockholder? For instance those that managed to jump onto the AAPL Cart at $705 per share. I done that and hope not to do it again.

cyclone4

So much for my prediction on AAPL doing very well today. I think that's the last prediction I am going to make about Apple.

anthonyp

Well Charlie----I though the same for myself a few weeks ago....I feel your pain....and the dimming of the hope we all have had during the great last run up...I remember back a while ago when Google said they wern`t going to split their stock nor have a dividend....and it too had a mighty fall, and stayed sort of in a trading range....for quite a while....I only traded it a little, made really nothing, and lost interest in it.....

You know if aapl increases it`s divident to say sixteen dollars, and your cost basis were three hundred fifty dollars a share, you would be earning North of four percent......That would really take the worry out of it while we all wait for improving times.....

As a matter of fact, I might be able to join you ....:-) Tony ps I sure wish I had another decent stock or two...to follow

cyclone4

Tony, here is what I think is an exciting article about Apple. We just need to have some patience with the company.

http://wallstcheatsheet.com/stocks/is-apple-plotting-a-complete-redesign.html/

ljflx

What I find impossible to believe is that Microsft now trades at a 50% premium to Apple and utility companies also trade at a premium to it. The stock either has to massively correct or see its earnings cut by 50-70% for this multiple to make any sense. If you believe in its earnings future just hold the stock. In about 4-5 years it'll have more cash than market cap. And if you buy into the real low point of where some predict the stock will go it'll have almost double its market cap in cash.

cyclone4

Here are some thoughts on Apple from a NYU professor. I think he is on target.

http://www.cnbc.com/id/100435853?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par- =yahoo

ljflx

Very telling story here about companies at their peak failing because they try to protect a core. They seem to screw things up because they don't realize that others will develop technology that they either have or are close to. So if they try to protect the core by not putting out the technology then others will attack and erode their core. If you do it yourself at least you have some control while developing a new market. Apple has the right idea. They didn't try to protect the iPod. They cannibalized it. Kodak missed the boat.

http://management.fortune.cnn.com/2013/02/05/success-corporations-innovation-fai- lure/?source=yahoo_quote

anthonyp

You missed it by one day good call in my book Tony

anthonyp

One other thing----I saw the Lexus yesterday, and don`t care for the grill but even more, not the big hump between the driver and passenger......Did see a Genesis and it looked o k from the outside, but haven`t seen the inside....I assume your critique will rule the day.....Just keep seeing `spy` shots of the S Mercedes, and think the exterior will be unique, but the dash leaves something to be desired....Just have to see it in real life...Tony

cyclone4

Tony,

Thank you for trying to boost my spirit. I have been burned too many times on Apple to give an accurate count the past few months. As soon as I think that perhaps the bottom is in, bingo! It crashes again. So, no short term prediction from me this time. Ultimately, however, we will be rewarded in the long term. "Patience [non-permissible content removed], patience, cried the master to the donkey."

cyclone4

Did see a Genesis and it looked o k from the outside, but haven`t seen the inside.

I saw the inside of both the Genesis and the Equus at the Detroit Auto Show a couple weeks ago. I did not like it. It was too dull for me. The instrument panel was especially boring.

ljflx

Well Tony - I'm in the market for a car a lot earlier than I thought. I had thought my lease ended in November but it ends in July. What's hastening it more is that Lexus will waive the last 4 months of payments if you take a new LS by April 1. So I'm going down to see them tomorrow. I'm also dropping in on Jaguar and I have an appointment with MB as well. MB has a $3500 conquest program and they are doing exceptional lease deals on the S550 right now. I told them the Lexus deal on the payment waiver and they told me they'll sweeten the conquest amount to match it. Now I need to move fast in order to keep Lexus in the game as there aren't all that many LS460L AWD cars on lots so I have to see what's coming in during March for a late month delivery. Likewise there aren't many S550's around either so I'd need to see what's in stock there and what's due in. By my estimate the S550 will lease out at $50 a month LOWER than the LS. If they have an AMG clad S550 coming in (not an actual AMG just one with the sport styling) I would go for it. If I go MB there's less of a rush than Lexus. The Jag is loved by my wife and I but I don't even know if they have a conquest program. Audi does and I like the A8L so we might also look at that if they have a conquest program that's generous enough and they are willing to deal. But the big favorites for me are MB and Lexus. MB will do a 24 or 30 month deal also (at the same or very close to the same price) so that means I can be right back in the game for the next gen S and bypass all the early demand and high prices. I also think I prefer the current S class styling. Problem for my wife is she much prefers the Lexus nav and electronics.

anthonyp

Hi Len

You would look awfully sporty driving down here in the Mercedes......It is unique ....As I said I didn`t care for the grill nor the big hump I saw in the Lexus....I have been a big Lexus fan for many years, then by chance got the Audi, which for me was even better.....Many people are not `taken` with the design of the Audi, but that is my taste, and the car has been a very good one....

My next door neighbor has the Jaguar xj and they love it...It is a good looking car, and now I think it come with 4wheel drive.....My Audi has that feature, and it is surprising how it feels in a heavy downpour....Something you can actually feel....Of course Mercedes has it also, and Lexus too I think....but the Audi really works

I rarely use the mapping, or speed control, as the car really is nice to drive, and I like to pay attention.....

What a fun problem you have Tony

gagrice

Maybe Apple should have spent more time at the WH with Obama.

TracFone CEO F.J. Pollak has been a frequent White House visitor and his wife Abigail has raised hundreds of thousands of dollars for both Mr. Obama’s 2008 and 2012 campaigns.

And although TracFone had originally lobbied for the program, critics say its contract would not provide recipients with skills-boosting computers and services, but would supply high-end Android phones, ready to play games and browse Facebook but doing little in the way of getting a job.

http://www.washingtontimes.com/news/2013/feb/5/obama-crony-wins-contract-to-give- -phones-to-jobles/

Kirstie_H

Well, those concerns are legitimate, but iPhones would allow the owners access to their full iTunes library, making it even less likely real job-training work would get done.

houdini1

Speaking of cars...I just traded in my wife's 2007 LX 470 on a new 2013 LX 570. Dark gray, light tan interior with all the bells and whistles. I know a "truck" like this is sort of ridiculous and is way over kill for our needs, etc., but this will be her 4th LX and she simply refuses to drive anything else...besides, I like it too !

She only drives about 5,000 miles per year, so fuel costs won't be too bad. The LX is the only Lexus model that the "new grill" looks good on IMO. It is big enough to handle it.

fintail

Yes, no games or fb access on an iphone...where's the eyeroll emotorcon ? :shades:

I also sincerely doubt these are legit "high end" phones, note the author doesn't mention any models, just like the candidate who's loss still causes the author bitterness couldn't mention economic specifics. Funny.

fintail

I think the AMG trim package on an S is a no cost option, so I bet you can get one. Good luck. S sounds like the definite bargain there, as it will MSRP much higher than the LS.

gagrice

The three people I know searching for jobs right now all have smartphones. One is an iPhone 5 and it has not done a thing for their job searching. People seem to think that once you apply online for a job you can sit back and play video games until a prospective employer calls. I say hit the street and show your face in places with help wanted signs. With 3000 applicants for every new job, the couch potatoes are not likely to get it. I say the program will add to the problem not improve their chances. More wasted tax dollars paying back campaign contributors.

kyfdx

Everyone I know has a smartphone, except you and me...

gagrice

I am thinking of getting my wife a Galaxy S3 on Verizon and dumping her ATT flip phone. Then I can get a decent tablet with 4G on the family plan. I really don't need a phone and don't want to text anyone. Samsung is coming out with the Note 8.0 this month and that would be the size I want. I don't like the 10 inch tablets. I like the 7-8" size over all.

imidazol97

>http://www.washingtontimes.com/news/2013/feb/5/obama-crony-wins-contract-to-give- -phones-to-jobles/

I read this article. That explains why here in Ohio I'm seeing ads for Adroid phones on daytime TV to the free phone crowd. I'm trying to figure out how to get one for myself...

I see this entitled to free stuff as a factor in our economy's future. A few make money from the taxpayers to give away free stuff. Reminds me of a news story I heard a day ago about a lady reporting a theft from her premium auto in her driveway. Her $400 purse was taken from the backseat along with the $200 billford inside. AND also taken was her welfare card, I think termed food stamp or something by the narrator.

How can I get that stuff for me?

gagrice

First you need to set up an off shore secret bank account. The rules in most states want you to be broke or so close you don't know where your next meal is coming from. The other alternative is keep your cash in a paper bag in the closet. You have to look broke. If you are a single adult the criteria is much higher than if you have children under the age of 18. If you can qualify for any of the dozens of welfare programs you can qualify for most of the others. It is not difficult for a family of 4 to live much better on welfare than if both parents work at minimum wage jobs. I personally know families in both situations.

cyclone4

This statement was just released by Apple and the stock immediately (within seconds to a minute) spiked up from $1.50 higher to more than $9 higher.

http://finance.yahoo.com/news/statement-apple-203800823.html

anthonyp

As I said a while ago, you had a good call on the stock....I also said they have needed to return funds to the shareholders ---I personally don`t understand the Preferred Stock idea, as I am attuned to dividends (cash)....Maybe Len will describe it for us ? I trust him (and others on the board) just not the media Tony

anthonyp

and further---I think aapl should be coming up with ideas itself, not just reacting to other suggestions......If they are planning on doing nothing with the cash that has been earned over the years, and just warding off shareholders who own the company, the big institutions will make life ugly for all who have an interest....Here is hoping something good comes out of the annual meeting.....Apple needs to get with it Tony

cyclone4

Tony,

I don't understand this preferred stock stuff either. All they need to do is increase the dividend for common stock and buy back shares more aggressively and everything will be fine with the stock. Based on what I read on the statement this afternoon, I think that at the very least, they will raise the dividend.

I also expect that we will see some wonderful surprises with either new products or big upgrades in current devices in the next 6-12 months.

ljflx

Tony & Charlie

Took the S-550 4-matic in Diamond white with cashmere interior. I took it with AMG styling and wheels, panoramic roof, heated steering wheel, lighted door sills and rear seat power shades. It arrives at the dealer in about 10 days.

The new S will not debut at an auto show. It will be an MB debut at an unknown site and be available for sale in the US in September. I saw it in pix and I like the current styling more. The new car looks a bit too much like a bigger E-class to me. It's nice but I think the existing car is more distinct. So now an arctic white GL 450 and a diamond white S550 with AMG styling will be in the garage. I think my old buddy Merc1 would never believe it.

Absolutely monster storm due in here tomorrow. Rain to a blizzard late tomorrow afternoon but it may also be all snow from the start. If the latter it would be over 3 feet. Incredible. Blizzard warnings up all over the place and until now it's been such a quiet winter. This storm can shut down NYC and Boston and everything near and between both cities.

anthonyp

That is a very nice choice---and I wish you the best---Hope you drive it on down here when you come :-) classy

Went to an eye Dr today, and he comes from Pauley`s and Charleston.....If you ever need a good fellow he is one.....

We need a little analysis from you on the aapl thoughts Tony, and just remember when you see the snow `God loves you` old saying

fintail

I know 3 people who don't have smartphones - my late 80s grandmother, and my 60-something mother and uncle. But they do all have normal cellphones. You can play games on those phones too. As well, there are numerous low end phones that run Android and are considered to be smartphones, even though they are cheapos. Which contributor is cashing in via this? Whoever it is, it isn't them who caused Daddy's Wallet and Ebenezer to lose the election.

Oh, and a couple co-workers are Blackberry holdouts, won't give up the physical keyboard. Other than that, literally everyone I know has one.

People don't go door to door searching for jobs so much these days, especially not for above minimum wage jobs in the city. Even grocery stores and fast food places have little computer kiosks to apply. The web based application is what gets the initial foot in the door. Time and technology have moved on.

fintail

Free stuff like corporate welfare, trickle down nonsense economic theory, and the zillions of dollars received by foreign aid parasites who control both domestic and international policy? Oh wait, those don't count.

I'd be amused to see a link to that news story. Rush or Beck?

imidazol97

>I'd be amused to see a link to that news story. Rush or Beck?

Sorry to disappoint your overactive imagination, but I think it was the morning guy on 55KRC in Cincinnati.

I see this as a question about where we're ending up in the spending spree and where that's goiing to move the market. I know it's interesting to focus only on Aapl but I'm curious about the overall market.

cyclone4

Here is a pretty good explanation of what's been going on behind the scenes between Einhorn and Apple. It's rather fascinating. After reading this, I am not sure if I should vote for or against provision #2 in the Proxy statement. I hope Len can help us. And, I still don't know for sure who would get the preferred stock if they agree. Would it be ALL investors or just the big boys?

http://finance.yahoo.com/news/einhorn-turned-apple-advocate-agitator-024325248.h- tml

robr2

Would it be ALL investors or just the big boys?

Probably just the big boys. It'll trade as a separate class and of course gets preferred rights. What will probably happen is that there will be a limited number of shares available and will trade at a higher price. Initial buy will be for the big boys of course and we plebe investors will have to buy them after the big boys.

houdini1

Well, that's a relief. I still have 50 shares of aapl, so I am sure that would qualify me as one of the "big boys". Looks like I will be in line for those preferred shares and will be collecting that 4% dividend.

robr2

Oh silly me. I sold my 60 shares recently. If 50 gets you big boy status then Cook would've invited me along with those investment funds to join the preferred share club!!

ljflx

You can bet your life that anyhing David Einhorn does is for no one but David Einhorn. Calpers has already sided with Apple on this going against Einhorn. What Apple wants to do is take out a right it currently has to issue preferred stock. What it wants to do as a replacement to that is limit its ability to issue preferred stock by requiring shareholder approval. That's protective of shareholders, not the opposite. It linked this with two other items that are more protective of shareholders and which Einhorn is very much in favor of. Einhorn is throwing out BS that he wants preferred shares so that Apple can continue to be a growth stock and not subject itself to the ignonminy of a greater dividend yield company. He wants a 4% preferred stock yield. Personally I think Einhorn sees what I see - a stupidly valued company by Wall street that has far too high of a cash to market cap situation. That's happened because of selling, possibly contrived that just went way too far. If it went much further Apple would have had over 50% of its market cap in cash after just having grown revenue 18-27% over a year ago (the latter is if you adjust the math to give each year the same amount of days), How stupid is Apple's valuation. Well Wall street just jumped Netflix to a ridiculous valuation off of an $8mln. profit quarter. That's a profit that Apple makes in about 90 minutes. Yet Netfix with that paltry profit has seen its shares double while Apple on numbers that you can't even get to Netflix's profit unless you cut them by about 70,000%, fell 35%. It's only a matter of time before Netflix gets heavily shorted. So what's Einhorn's real motive? Nothing really with Apple IMO. He just wants news to get out there that brings Apple's huge cash pile to the forefront and that'll do nothing but lift the share price - which is what Einhorn's real motive is. You don't want to vote with Einhorn if you own Apple but you do want his suit/story to have staying power in the news.

NY Times:

http://dealbook.nytimes.com/2013/02/07/einhorn-to-sue-apple-over-plan-to-discard- - - - - - -preferred-stock/

Note these prior moves by Einhorn:

http://dealbook.nytimes.com/2013/02/07/taking-on-apple-einhorn-has-a-history-of-- - - - - - public-calls/

cyclone4

Your expert advice helps an awful lot Len. Thanks! I am going to go with managements recommendations.

cyclone4

Len,

I think you made a very smart move as usual. Btw, I am no longer a German car hater that I was several years ago. I have changed with the times ;-). When AAPL reaches at least $650 again, I will definitely consider the S550.

cyclone4

I had a suspicion that Einhorn was looking after his own interests, but was not sure. I bet Apple makes some sort of an announcement that would benefit shareholders like you and me in their meeting later this month. But even if they do not, I feel confident that there will be new innovative products and major upgrades to current products in the next 6-12 months. That will help the stock immensely.

At least Einhorn's request has been a positive one for the stock because it has brought Apple into the news media in a good way.

cyclone4

The future of Apple looks bright as this article implies:

http://beta.fool.com/jekoslosky/2013/02/08/why-apples-next-big-thing-might-be-ma- ny-little-one/23942/?ticker=AAPL&source=eogyholnk0000001

anthonyp

Thanks Len for your thoughts....I guess that aapl may bypass regular investors if the preferred stock were issued, something I would not forgive them for....I sure hope they increase the dividend, something I understand..

Jobs would not have approved any stock buyback, so Cook and company are already doing that, and a smallish dividend......So easy to see how the increase of same would be reasonable, and frankly if they ever were to buy a meaningful company they could easily borrow the money in full....There is no reason to be hoarding the funds that shareholders should be rewarded with, for being right and sticking with a very volatile company....As I said you guys deserve every penny you earn.......Tony

circlew

Best of luck with your new Merc. Awesome choice, though I loved your Lexus. Enjoy it. Love your posts as well.

BTW, heard an analyst that urges AAPL to buy Netflix (Apple TV play) and also buy back stock to make use of the extraordinary cash. Let us know what you think.

Stay warm. :shades:

Regards,
OW