“Here we go again. Another Apple quarter that demonstrates long term strength in its business, and another quarter where Wall Street is waving its hands in the air claiming that the business is broken,” Chris Umiastowski writes for iMore. “Apple shares are down over $50 (10%) as I write this.”
MacDailyNews Take: The business isn’t broken, the share price is broken.
“Always remember value investor Benjamin Graham’s famous expression: In the short term the market acts like a voting machine. In the long term it acts like a weighing machine,” Umiastowski writes. “Today, the voting machine dominates. But over the course of many product cycles, those daily votes amount to nothing. That’s why the market is volatile, and why I focus on long term investing.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Dan. K.” for the heads up.]
In the long term we are all dead and apple is gone.
And our heirs are spoiled, rich brats.
As is planet Earth, just not this year or the foreseeable future. If one tries to invest on a near term Doomsday philosophy one would never invest.
Agreed…Dec. 21 was the WORST apocalypse ever.
Apple should really just buy back all their stock and tell the thieving scum on the street to go manipulate another stock.
Chris from iMore? Who? What? Another doofus.
You think so?
Personally I think his article is probably the most sound explanation I’ve read. What are your credentials?
Credentials? Do you mean like a degree in journalism? Not that it matters. It’s simply me expressing my own opinion. Sorry, must have hit that fanboy nerve in you? Pretty easy to do around here. By the way, do you have a degree in journalism? Okay, your turn. Or are you just an uneducated fanboy?
Credentials, OK. Polical Science, History, Economics. Sorry, no Journalism. Maybe that makes me one of your “uneducated fanboys”. I think the whole problem is that Wall Street questions whether Apple can produce the “next great thing”. With Jobs at the head they did not question it but now they are sure.
Sorry, should read “they are not sure.”
Apple stock is tough to figure: is it a growth play or a value play?
I’m not worried. The markets, over time, will figure this out.
Look at its PE. It’s a value play and always has been.
Here’s another set of incomprehensible statistics on price/earnings ratio:
Apple 10.22
Microsoft 14.93
Google 23.22
How in God’s name can investors believe that Microsoft is a better bet than Apple?
Those investors have concluded that the iPhone is no longer relevant to consumers when there are going to be $100 smartphones for the masses. There are plenty of smartphones but there is only one Windows OS. That’s what they’re thinking. Supposedly, every product that Apple makes is going to be replaced by something much cheaper and with just as good usability as the Apple product. That’s what they’ve said. There’s still nothing to replace Windows OS. Macs and OSX don’t count because Apple can barely make more than a few million Macs every quarter.
The whole premise of Apple’s value is that it doesn’t exist because it will be easily replaced with something else not Apple. Wall Street believes that cheaper is better and it will always win out in the end. Apple will never win with hardware alone.
There’s one huge thing Apple has that no other company has right now and that’s a cash hoard of $137 billion. That’s what Apple needs to use to beat its rivals into the mud. It’s such a huge amount of leverage and yet Apple refuses to use it for anything that adds enough value to the company to give value to shareholders. Apple could easily copy Netflix’s streaming business just like Amazon has and probably do it a lot better. Apple seems to be overlooking easy ways to make more money.
I think you have accurately distilled the essence of why the stock is tanking and the multiple is compressing like a deflated party balloon. I have been struggling to understand why they were ignoring Apple’s value the past month as an innovator. Perhaps I overestimated Apple’s value…perhaps the masses will be quite happy with Android, as they were with Windows, and will not be paying a premium for iPhone/iPad. I hope that Wall Street is wrong, but perhaps I have been too optimistic and too dismissive of the competition like Samsung, Amazon, Google/Android. 🙁
Apple is going down….selling all shares before getting worst
Troll.
“Stocks go up and down, and things may be different tomorrow…”
– Steve Jobs when commenting on aapl surpassing dell’s market cap for the first time.
Greedy bastard it simple a stock manipulation by a bunch ANALsyt/brokers. I trust the handicappers in Vegas more them I do these Wall Street A-Hole. No wonder no one trust Wall Street anymore, beside I getting sick of watch CNBC or Bloomberg on my Apple TV.
I bought 100 shares at $456 today.
Will buy 100 more if it goes below $425.
That’s the spirit, and hang on to them. One of the things quite overlooked by many is that over the years Apple has been one of the best performing stocks on the planet. Short term pain for long term gain. I’m still way ahead of my initial investment and not perturbed or disturbed by this bump in the road.
Thanks Chris…. Dumbest thing ever uttered by a semi-human. One, two, oe ten fortunes vanished over the course of hours makes almost no difference to anyone. But MILLONS OF FORTUNES VANISHED OVERTHE COURSE OF HOURS TENDS TOPISS PEOPLE OFF. Some of them throw things.
Apple should buy about 60M stocks at a limit of $500 means they spend about $30B. After that shares will drop to about 880M and if number of shares remain same then EPS will be close to $15.
Then they should split the shares. One share receives 10 Extra shares will increase small investors interest and then keep buying about $30b per year and cancel cash dividend.
Get used to it… Apple will never be what it was in the last 2 years again. The leader and visionary is gone and their heyday is over.
Check out Netflix – makes $7M profit and the stock market cap goes up $2.5B. Goes to show the market is not very logical at all.
The so called problem is not a problem and it’s not at Apple. It’s an inherent human condition called “Never Satisfied” and “Greed” Apple is a high tree and high trees catch all the wind. Apple has been doing exactly what it’s been doing all along – evolving… But because every butcher, baker and candle stick maker ‘think’ that they can do better, and the evolution process is not moving according to their wants and beliefs, Apple is doing something or another wrong… My advise is sit back and enjoy this wonderfull adventure with Apple. The evolution process is nearing another paradigm shift and these are exciting times. With the engineering marvel Apple has created with the iPhone 5, all evidence are indicating that Apple is spot-on track. But the stock market will probably remain blind to this fact…
Let’s see here.
Who looks like they are leading their rivals?
Who has a PE ratio with room for growth?
Who has true integration of hardware and software?
Who has introduced new form factor products?
Who has excited the world with new possibilities?
Would I invest in Microsloth with its myopic “WIn-MSO Forever” mountain top it protects or Google with its false slogan or Apple?
I invest where I spend my money.
If you play by Wall Street’s rules, expect to be screwed. They are only interested in rewarding companies that can be bought, dismantled and destroyed. Long-term business is of no use to them. Pretty clear why so many US businesses have been eliminated, isn’t it?
The media has done its share of destruction through breeding fear, uncertainty and doubt. Rather than honestly reporting facts, the media has made its mission be to destroy any morale, self-confidence or trust in everything. Now, that’s just helpful to any natio or economy, don’t you think?
Let’s face it, Wall Street has always been uncomfortable with Apple. Then it rigs the voting machines so if it is a big YES for Apple, it gets reported as a big NO. So the vote is everyone hates Apple, or so we are led to believe. Eventually, Wall Street will realize that Apple is a great buy. Then voting machines will register a big YES for Apple.
Microsoft’s future is about as secure as Blockbuster.
SJ didn’t fret over share price, particularly as there are no dividends on offer. If you don’t like – sell. If you do, stick or buy.
simple.
Does Apple worry about market value, does it need the market to finance future products. No & No.
SJ had a company war chest just so that he never needed investor approval for what he wanted to do. what’s changed?
Yo can either chose to belive they have a plan to deliver and grow value or you don’t.