Author Topic: Can Someone help me better understand Apple  (Read 2977 times)

Kroaler

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Can Someone help me better understand Apple
« on: August 22, 2015, 12:06:38 PM »
Okay I'm indifferent either way. Im not educated enough to pick individual stocks, + I hear thats a fast way to lose money. So I stick to index funds and other more diversified funds.

But what makes Apple so bad? Or am I mistaken. It seems like many people on here don't want to own it. But the P/E ratio seems acceptable.  Again I probably don't have the understanding to comprehend the accounting practices used. Are the future earnings really expected to be that bad?

Can I get some peoples opinions of apple at this time? And why they believe it is over / under valued or appropriately priced at this time.

sol

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Re: Can Someone help me better understand Apple
« Reply #1 on: August 22, 2015, 12:08:20 PM »
If you own index funds, about 3.5% of you net worth is already invested in Apple.  Everyone wants to Apple to succeed, even the indexers.

fb132

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Re: Can Someone help me better understand Apple
« Reply #2 on: August 22, 2015, 12:16:24 PM »
Apple is a technological company so they have very high volatility because it is a sector that is constantly evolving. Apple may be on top right now, but things can change quickly for them. Remember 15-20 years ago, Microsoft was ahead of them or remember Kodak??? They were one of the top brands for cameras until they couldn't keep up with the new technology. Like Sol said, everyone wants them to succeed because Apple is part of most index funds, but would I buy Apple's shares alone??? Nope, it will be tough replacing Steve Jobs and what he brought to the company. I may be wrong,maybe Apple will still continue putting out amazing products but I would rather invest in index funds than putting my money at Apple's shares, unless I felt like gambling...but I am no gambler, so that won't happen.
« Last Edit: August 22, 2015, 12:35:32 PM by fb132 »

Seppia

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Re: Can Someone help me better understand Apple
« Reply #3 on: August 22, 2015, 12:28:18 PM »
The main issue I have with Apple is, as fb132 above stated, a tech company whose success depends on the next product they come out with.

Since the iPod they had an impressive run, but remember how just a few years ago Nokia dominated the cell phone market?

innerscorecard

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Re: Can Someone help me better understand Apple
« Reply #4 on: August 23, 2015, 06:43:17 AM »
Almost always, Apple is perceived as on the brink of destruction and/or irrelevance. It's been perceived like this for a long time. It hasn't happened yet. I don't think the totality of the evidence suggests that it's going to happen now, either. AAPL remains my largest holding, as it is for many people both smart and dumb. Many disagree, for both smart and dumb reasons.

Seppia

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Re: Can Someone help me better understand Apple
« Reply #5 on: August 23, 2015, 06:57:04 AM »
I did not at all want to imply that it's dumb to hold Apple, I hope it wasn't perceived that way.
I was just explaining why it doesn't work for me.
I like to pick a few stocks on top of my indexes and 401ks but I am extremely risk adverse with them.

innerscorecard

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Re: Can Someone help me better understand Apple
« Reply #6 on: August 23, 2015, 07:15:39 AM »
I didn't mean to imply that at all. Hope my post didn't come across that way.

Actually, I'm very risk averse too.

That's why I like investing in a company trading at just a bit over 12 times TTM earnings (and even less when you look at forward earnings, not to mention both historical growth and the expectations of growth based on what is happening in the sectors Apple operates in) and holding a big fraction of their market cap in cash (even after backing out all the low-interest debt). I also like investing in a company where management does what they say they will do and is fundamentally honest. Also where the base product is entrenched in a unique ecosystem that has not fallen, despite the attempts of many of the other biggest and best resourced companies in the world to do it. All of this is hard to find. It just happens all to be in the biggest publicly traded company in the world by market capitalization. That's ok with me. I don't mind investing in very small companies, and I don't mind investing in the biggest, too.

Of course, there are risks. For the most obvious one right now, Apple has invested a lot in selling to Chinese consumers, in mainland China. That's a huge chunk of Apple's revenue. But I don't think a slowdown or even a recession in China spells doom for Apple in China or Apple in general. Many do, though, including people who are smarter than me. That's ok. I'm pretty confident that the current price more than compensates for the risks that do exist.
« Last Edit: August 23, 2015, 07:18:07 AM by innerscorecard »