Totally wrong. Microsoft was the heaviest weighted stock in the Nasdaq/S&P plus one of the higher priced stocks in the Dow in 2000. -66% in less than one year. And there are multiple other examples of this kind during market history. CM
But msft was trading above the market multiple at a multiple of like 40. AAPL is trading at a multiple of 10 and 3 of that is cash whereas the market is trading at 17
Okay for the PE, but this is not because every institution / fund pension is invested in your company that you will not ultimately crash. This is trust/confidence for the future of the company that drives price. Imagine one disappointing quarter for Apple? Do you think institutional investors will stay for ever? Of course not. Everyone will run as fast as he can to dump stocks. Even if they got tons of cash, it will not change the problem. Remember Sony, Nokia, Nintendo, Palm, Blackberry etc. Big companies, nice growth, nice performances, corrects PE, tons of cash etc. until one disappointing quarter and game is over. CM
Obviously you don't follow AAPL or its numbers, lol. I've been trading this stock since 2005. Do you know how many times AAPL has missed the quarter and saw its stock dump? They've had many disappointments, and several times where the company's stock took over a 20% draw (a signal of a bear market). Of course AAPL "could" crash, that's why stocks, by definition, are speculative trading vehicles. If and when there is a "crash" in AAPL, it doesn't seem to be happening anytime soon. In any case, if you're bearish, then short it. There are two sides of every trade. Best of luck.
Usually when a stock has die-hard fans who will defend it at length (never marry a stock) is when one has to be most careful. No, it will not happen overnight and yes it will be a cash play even after its tech is old hat, but by the very nature of cutting edge technology and companies getting too big...it will indeed fall into the above mentioned scrap heap. I just hope management does burn all that cash while "trying to make a comeback" at some point in the future.
I don't think it will take 1 disappointing quarter, just like it didn't take 1 quarter for it to be over for MSFT. MSFT survived the tech bubble better than anyone else in that space. It took a decade of underperformance to its peers (FB, AAPL, GOOG) to slow MSFT down and it's still one of the 10 largest companies in the world. AAPL might be a 200 dollar stock in 10 years (trading at a PE of 15) with the SPX close to 6000 (trading also at a PE of 15). That is how AAPL will decline. It will be relative. I think the problem with AAPL stock is that the company is TOO successful. Everyone already owns AAPL. It generates so much profit that there isn't enough investor capital to get the PE up to market levels so it will be "perpetually" cheap at this level of earnings.
Yea, but MSFT had a monopoly on the operating system of 85% of every pc and laptop sold from 1995-2015. And all they did was write code. No hardware issues, no china issues, very small work force and very small overhead compared to hardware manuf. It took a decade because it was a company which was built much more like a utility (lots of certainty) than a growth stock. Apple has none of these qualities. If MSFT had not been so incompetent in creating an operating system they would, right now, rival BRK.A in their stock price. Its a company that, at one time, broke through with a disruption but now faces much competition on said disruption and has way too much of their manufacturing and revenues coming from the likes of a country that is known for stealing copyright, replicating-counterfeiting, fad driven choices that can change at the blink of an eye, heavy spending in luxury when times are very good and flat spending when times are rough. They also face much heavy competition in the EU, SA, Asia and here in the US I see a wide range of phones out there (probably more Samsung that iPhone). Really I see GOOG's Nexus as one of its biggest threats but Samsung and Sony are very much in play well here. Way too much uncertainty for such a lofty, indices-weighted stock. Like I said above. Its just like oil. An entire industry was built around it (over built), it was way over invested in and people "refused" to believe that its price would fall. At least with oil they tried to bring Jobs back. P.S.- I do believe that Cook will be the next ex-tech ceo to way over pay for an NBA team (Golden State).
Ok, I did not mean to be taking this thread too far away from AAPL with all my MSFT talk. So, does anyone think that new product (lastest iphone, ipad) will have any potential disruptions this year heading into Christmas build up of new inventory considering that China is in some volatility?