Motley Fool contributor gives up trying to predict Apple’s stock top – for now

“Maybe I ought to just shut up. Despite telling readers that Apple’s (AAPL) stock split was meaningless and that the shares were overvalued even for a Rule Breaker like me, the stock has continued to go up, up, up. What the heck is going on? Well, at the risk of earning an undisputed claim to the title ‘master of the obvious,’ the answer is this: Apple continues to perform in every area of its business. Witness yesterday’s announcement that the iTunes Music Store has passed 300 million downloads and now boasts a library of more than 1 million songs,” Tim Beyers writes for The Motley Fool.

“Apple reported 200 million downloads on Dec. 16. That’s 75 days to add 100 million songs, or 1.3 million downloads per day. It took Apple 156 days to go from 100 million to 200 million downloads, or a rate of 641,000 downloads per day. Though these are nothing more than estimates it does appear that Apple has doubled its rate of daily music downloads in a little more than six months… [And] The Mac maker has reportedly sold more than 10 million [iPods]… At some point Apple’s hits are bound to stop, but can anyone really predict when that will be? Nope. So, at least for now, I’m done trying,” Beyers writes.

Full article here.

16 Comments

  1. Well, it is up today, enough to dent – but not recover from – yesterday’s big fall. I expect it will remain a rollercoaster ride, though muted after the split. IOW, yesterday’s $3 drop would have been $6 in last weeks numbers, todays would have been $2.

    But in another 5 weeks when the Q2 earnings are released there should be another spike. Whether it will level and rise from there depends on Tiger.

    As a tiger (Bull) myself, I expect greatness.

    Long hold. Buy

  2. Well, this guy is not really shutting up. He just claims to be wrong about Apple all the time, which leads us to believe that Apple has reached the top.

  3. Well, I’m as big an Apple fan as anyone, but loving the company and its computers is not the same thing as making a wise investment choice. If you look at the stock logically, you have to predict a ceiling somewhere sooner rather than later. Buying it at $50 was brilliant. Buying it at $90 is not.

  4. Why is anyone surprised that the number of downloads is increasing much more quickly. Every month, new iPod users are popping up. These new users add to the volume of downloads that occur. It is a snowball effect. As the snowball picks up more snow, its surface area increases picking up more snow than the previous time (Assumption: the snow sticks evenly and consistenly to the surface). If I have my math straight, the surface area grows quadratically (because it’s dependent on the radius). Therefore, one would expect iTunes music downloads to grow quadratically. As long as new users are brought into the iTunes community and as long as there are songs to download, the number of downloads will continue to increase rather quickly. I can’t forecast any tapering unless there are factors that would hinder the sources of growth I’ve outlined.

    This is something analysts should be wandering/computing/pronosticating/pulling out of their arses. I know I have.

  5. I like AAPL as well as the next guy. Bought a mini and lust after a new 17″ Powerbook too.
    But at about 70 times earnings the stock is a little dear. Of course after the G5 Powerbook is released the increased earnings will bring the P/E to a more reasonable value. Right?

  6. Um dipshit.. the stock split is NOT meaningless.. whenever a stock splits the price is halved. Supply and demand states that there are some people that would be more interested in a 40 dollar stock than an 80 dollar stock.. THATS WHAT THE STOCK SPLIT IS FOR!

    It broadens the audience of investors that would pick up a stock..

    Stock splits have ALWAYS been good for this reason, ie, it makes AAPL looks undervalued, and people pick it up.

    what a dumbass.

  7. mike,

    When he said the stock split was meaningless he thought at the time that the stock would fall to the 50 to 60 dollar range and a stock spli was not needed. As usual, he was wrong about the price.

  8. Al, i’ve read from MF and elsewhere that the stock split is meaningless because Apple’s value doesn’t change.. which is so elementary and face-value that it baffles the mind that this would be published.

    My point is.. i’ve heard such a claim, under the idiotic context of (5*4 is twenty; 10*2 is also twenty.. the split is meaningless) so I think you should read the article.. you might be surprised at how idiotic some of these guys are. They know their shit.. any … yet..

    Anyway I read it in the context of “the split does nothing for Apple’s Market Cap” to which I give a big thumbs up and a “No shit!”

  9. Well at least this guy has the balls to admit he was wrong. Most Analysts just hope you forget when their predictions are wrong. I think AAPL is gonna continue to go up for a while because there are new factors coming into play and I think even more will be announced soon. Namely the Mac mini and the Halo effect are gonna be great for Apple’s bottom line and so will cause the stock to go up when they are confirmed. As for the “even more” I mentioned, if it was something mundane that we could all see coming then it would not be “insanely great” now would it? ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

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