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- Thread starter Banacek
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That's quite a selective view of history you have there. You picked a high before a dip. Let's look 2 years earlier. In May of 2013 Apple was at 63 and the DOW at 15000. In the time the DOW went up by 30% Apple more than doubled.
In October 2007, the DOW was at 14000, and Apple was at 26. So in the past 10 years The DOW went up 40% and Apple went up 5 fold.
Even if we take a period when the DOW dipped, March 2009, for example, the DOW was at 6600. From there to 20,600 today is an impressive jump. Increased 3 fold. Of course, in March of 2009 Apple was at 12, and has gone up more than 10 fold since then.
In October 2007, the DOW was at 14000, and Apple was at 26. So in the past 10 years The DOW went up 40% and Apple went up 5 fold.
Even if we take a period when the DOW dipped, March 2009, for example, the DOW was at 6600. From there to 20,600 today is an impressive jump. Increased 3 fold. Of course, in March of 2009 Apple was at 12, and has gone up more than 10 fold since then.
I agree that my history is selective - and it is for a reason given my original statement:
"I just don't see the continuing past breathtaking expansion of iPhones sales".
Breathtaking (to me anyway and probably everyone else) is a 10 fold increase in a stock. However 3X for the general stock market ain't hay.
Going back to my "I just don't see the continuing past breathtaking expansion of iPhones sales", Android phones have surpassed iPhone in worldwide sales beginning around 2012 .
A major reason for the iPhone rise to fame, IMHO, is the touchscreen approach (2007) that quickly surpassed the mechanical keypad for smartphones, e.g., blackberry et al. This was a major change in approach - subsequent models of the iPhone have not been major improvements - they were incremental improvements. The iPhone touchscreen approach is being used now by everyone else - all nipping away at iPhone sales. So IMHO, unless Apple comes up with some major different products (a watch isn't one of them) I just don't see the future being a repeat of the past. Will it be a good investment - beats the crap outa me - probably, but I just don't think its going to be breathtaking.
PS. I am just not smart enough to base my future in retirement on picking stocks - most of my money is in index funds (almost all was in index funds with the rest in a few stocks up until recently) and I have been reallocating a decent percentage to cash and short term (5 yrs) interest stuff as I am going to need to make distributions soon and I don't want to be caught in a market dip when I have to do it.
"I just don't see the continuing past breathtaking expansion of iPhones sales".
Breathtaking (to me anyway and probably everyone else) is a 10 fold increase in a stock. However 3X for the general stock market ain't hay.
Going back to my "I just don't see the continuing past breathtaking expansion of iPhones sales", Android phones have surpassed iPhone in worldwide sales beginning around 2012 .
A major reason for the iPhone rise to fame, IMHO, is the touchscreen approach (2007) that quickly surpassed the mechanical keypad for smartphones, e.g., blackberry et al. This was a major change in approach - subsequent models of the iPhone have not been major improvements - they were incremental improvements. The iPhone touchscreen approach is being used now by everyone else - all nipping away at iPhone sales. So IMHO, unless Apple comes up with some major different products (a watch isn't one of them) I just don't see the future being a repeat of the past. Will it be a good investment - beats the crap outa me - probably, but I just don't think its going to be breathtaking.
PS. I am just not smart enough to base my future in retirement on picking stocks - most of my money is in index funds (almost all was in index funds with the rest in a few stocks up until recently) and I have been reallocating a decent percentage to cash and short term (5 yrs) interest stuff as I am going to need to make distributions soon and I don't want to be caught in a market dip when I have to do it.
Just for the fun of it....
While on the surface genius' argument might seem to make sense, a good part of the recent run up in the price is in fact just the opposite. Apple users tend to be very loyal, and generally don't replace an iPhone with an Android. Given the volume of past sales, there's somewhere around 350 million iPhones in customers hands right now, with about 100-150 million of them over two years old. Since those phones are more likely to be replaced by newer iPhones, and add in some additional sales from new customers, and some analysts are projecting annual iPhone sales of as much as 80 million units for the next few years. So, in fact, a projected big jump in phone sales is exactly why the stock is up. Throw in a quarter of a trillion (trillion!!) dollars in cash waiting to come home (talk of a tax amnesty out of DC is fueling that speculation) can't hurt either. Imagine the M & A possibilities with that. Hell, they could buy Finland and still have money left over! And then there's the car.....
While on the surface genius' argument might seem to make sense, a good part of the recent run up in the price is in fact just the opposite. Apple users tend to be very loyal, and generally don't replace an iPhone with an Android. Given the volume of past sales, there's somewhere around 350 million iPhones in customers hands right now, with about 100-150 million of them over two years old. Since those phones are more likely to be replaced by newer iPhones, and add in some additional sales from new customers, and some analysts are projecting annual iPhone sales of as much as 80 million units for the next few years. So, in fact, a projected big jump in phone sales is exactly why the stock is up. Throw in a quarter of a trillion (trillion!!) dollars in cash waiting to come home (talk of a tax amnesty out of DC is fueling that speculation) can't hurt either. Imagine the M & A possibilities with that. Hell, they could buy Finland and still have money left over! And then there's the car.....
You make good points.
The nice aspect of a discussion like this is that the "correct" answer will be determined in a year or two just by looking up the price of the stock.
PS. I thought that Apple had access (indirectly) to this off shore money by taking loans in the US. After all it has excellent collateral, i.e., the off shore money.
Speaking of Finland - how is Nokia doing
The nice aspect of a discussion like this is that the "correct" answer will be determined in a year or two just by looking up the price of the stock.
PS. I thought that Apple had access (indirectly) to this off shore money by taking loans in the US. After all it has excellent collateral, i.e., the off shore money.
Speaking of Finland - how is Nokia doing
Very true, time will tell if the pundits and analysts (who get paid either way) made the right call.
As to the off shore money, the issue isn't whether they can access it or not. It's really all about taxes. The US gov't loses twice under the current tax structure. Once, when they're unable to tax the income since it never comes back to US soil. But then a second time, since the companies use it as collateral (as noted) for loans to replace it, which then becomes a deductible expense on their balance sheet. That's where the impetus to for a tax amnesty comes from. Accept the fact that we're just not ever going to tax it, but at least bring it back and cut out the multi-billion dollar tax write-offs the corps are taking now. Better something than nothing is the feeling I guess.
As for Nokia, that was never one of my choices. But if we want to talk horror stories, remind me to tell you about my Allergan play. Ugh.
As to the off shore money, the issue isn't whether they can access it or not. It's really all about taxes. The US gov't loses twice under the current tax structure. Once, when they're unable to tax the income since it never comes back to US soil. But then a second time, since the companies use it as collateral (as noted) for loans to replace it, which then becomes a deductible expense on their balance sheet. That's where the impetus to for a tax amnesty comes from. Accept the fact that we're just not ever going to tax it, but at least bring it back and cut out the multi-billion dollar tax write-offs the corps are taking now. Better something than nothing is the feeling I guess.
As for Nokia, that was never one of my choices. But if we want to talk horror stories, remind me to tell you about my Allergan play. Ugh.
Re: Nokia - I bring it up as this was the 1st cell I had back in the late 1990's and was the phone to buy. As I recall (my memory is getting fuzzy lately) I replaced that phone with their 3310 in early 2000's (2001?)- an unbelievably successful phone - perhaps hundred of millions of that model sold. The phone was so rugged that in a pinch you could use it to crack walnuts (joking of course but was a very well built phone). The next model I bought, maybe 2 years later, sold another couple hundred of million units. The point is that Nokia was, at the time, the undisputed market leader, with well designed, good performing cell phones with a loyal customer base and only had the market to lose (ummm - sound familiar) - which it did. Add up the numbers for just these 2 models and compare to the 350 million iPhones you mentioned.
Whether Apple will follow in Nokia's footsteps - I don't know - but my time horizon to recoup loses ain't what it used to be and the impact on my life style on doubling the money I live on is much less than the impact of halving that $. So my decision on selecting investments now are a lot different than they were 30 years ago.
ps. As far as markets to lose - my 1st scientific handheld calculator was the HP-35 in early 1970's. As I recall paid around $600 (in 1970 $'s- I point out that my new car, a midsized sporty model, in 1972 was around $3000.) Once again theirs was the market to lose - Texas Instruments came out with their scientific low priced model in mid- 1970's for under $100 (my fuzzy memory says $79)- bought it directly from TI had to wait months to get mine as they were sold out and then retired my HP's (battery life of the HP's was maybe an hour or 2 and the TI's was all day - helpful on long flights.
As for corporate taxes - my opinion is that they should be minimal - even below the Trump 15% but with very few deductions. My thinking is that the gov'ts (feds and local) think that businesses are just cash cows to be milked w/o consequences to individuals . However, IMHO, all US business taxes are either avoided by going off shore or if that can't be done - passed on to consumers (as in you and me) in the form of higher prices. I also think that individual tax rates should be lowered with the deductions eliminated. Your tax filing form on April 15th would be the size of a post card with several lines 1. list your income, 2. multiply by X% 3. Subtract what you had withheld. 4. If negative you get a refund, if positive remit the amount you owe. The percentage would be determined to keep the scheme tax neutral.
The states could still do whatever they want - if NYS wants to tax the piss out of its residents and businesses- so be it - they can either pay up or vote with their feet to states that offer appropriate value for taxes imposed.
Whether Apple will follow in Nokia's footsteps - I don't know - but my time horizon to recoup loses ain't what it used to be and the impact on my life style on doubling the money I live on is much less than the impact of halving that $. So my decision on selecting investments now are a lot different than they were 30 years ago.
ps. As far as markets to lose - my 1st scientific handheld calculator was the HP-35 in early 1970's. As I recall paid around $600 (in 1970 $'s- I point out that my new car, a midsized sporty model, in 1972 was around $3000.) Once again theirs was the market to lose - Texas Instruments came out with their scientific low priced model in mid- 1970's for under $100 (my fuzzy memory says $79)- bought it directly from TI had to wait months to get mine as they were sold out and then retired my HP's (battery life of the HP's was maybe an hour or 2 and the TI's was all day - helpful on long flights.
As for corporate taxes - my opinion is that they should be minimal - even below the Trump 15% but with very few deductions. My thinking is that the gov'ts (feds and local) think that businesses are just cash cows to be milked w/o consequences to individuals . However, IMHO, all US business taxes are either avoided by going off shore or if that can't be done - passed on to consumers (as in you and me) in the form of higher prices. I also think that individual tax rates should be lowered with the deductions eliminated. Your tax filing form on April 15th would be the size of a post card with several lines 1. list your income, 2. multiply by X% 3. Subtract what you had withheld. 4. If negative you get a refund, if positive remit the amount you owe. The percentage would be determined to keep the scheme tax neutral.
The states could still do whatever they want - if NYS wants to tax the piss out of its residents and businesses- so be it - they can either pay up or vote with their feet to states that offer appropriate value for taxes imposed.
FWIW - Warren Buffett revealed on Monday that recent purchases give Berkshire Hathaway about 2.5 percent outstanding Apple shares. It also makes Apple one of Buffett's company's largest holdings, second only to Coca-Cola. At this point, Buffett owns $17 billion worth of Apple.
I have a lot of respect for Buffett and if any of you guys were to weigh his opinion on Apple stock vs mine I suggest that you take his.
One of the things that Buffett said was consistent with WizardOfAhhs post " Apple users tend to be very loyal, and generally don't replace an iPhone with an Android." where Buffett said that the young people he knows (I think he was talking about teen grandchildren) all have iPhones and iPhone owners tend to stay with the brand.
That said genius owns indirectly Apple stock as I have a lot of S&P 500 index funds and ETF's and Apple is the largest part (market cap ) of the S&P 500 - like over 3%. So if you own those funds you own
Apple.
A word of caution: Buffett bought a lot ( on the order of $15B I recall) of the Apple stock at the end of 2016 "When it was cheap" and stopped adding more as it "got expensive"
That munching sound you hear in the background is Genius eating humble pie.
BTW - Buffett does not use an iPhone - during an interview he pulled out his phone which was a flip phone - it was a Nokia.
I have a lot of respect for Buffett and if any of you guys were to weigh his opinion on Apple stock vs mine I suggest that you take his.
One of the things that Buffett said was consistent with WizardOfAhhs post " Apple users tend to be very loyal, and generally don't replace an iPhone with an Android." where Buffett said that the young people he knows (I think he was talking about teen grandchildren) all have iPhones and iPhone owners tend to stay with the brand.
That said genius owns indirectly Apple stock as I have a lot of S&P 500 index funds and ETF's and Apple is the largest part (market cap ) of the S&P 500 - like over 3%. So if you own those funds you own
Apple.
A word of caution: Buffett bought a lot ( on the order of $15B I recall) of the Apple stock at the end of 2016 "When it was cheap" and stopped adding more as it "got expensive"
That munching sound you hear in the background is Genius eating humble pie.
BTW - Buffett does not use an iPhone - during an interview he pulled out his phone which was a flip phone - it was a Nokia.
