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AppleSoft: No, It Was Not Different This Time

Tyler Durden's picture




 

Back in late August, we presented a chart whose foresight and accuracy turned out to be so spot on, it scared even us. We asked: "With Apple overtaking Microsoft's 'peak-market-cap' and becoming the most 'valuable' company ever traded, we thought a reflection on what humans (as opposed to machines programmed by humans) did the last time a world-changing technology company went ubiquitous. Comparing AAPL's last few years to the run-up in MSFT's peak in 1999..." Or, in other words, "is it different this time?"

This is the chart we presented five months ago:

Turns out, the answer is, No. It was not different this time. It never is.

This, despite what a certain Jim Cramer said two weeks later, just as the stock hit its all time high:

"Oh, for heaven's sake, stop trading Apple and start owning it... Is this an average stock with average growth? No, it is among the greatest wealth creators in the world with a vastly superior growth-and-balance sheet. Do you want to flit in and out of Apple to catch the latest review or day's sale? Or do you want to own a stock that's just too cheap not be owned, one that money managers all over the country have to own to show that they are in the game or to beat the game going into the fourth quarter. I think owning it has it all over trading it. Nothing I heard yesterday changes my mind."

Here is the same chart as above, updated for what has transpired since:

The chart above also means that there is much more gravity to come for this particular fruit.

 

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Fri, 01/18/2013 - 11:21 | 3166135 Jason T
Jason T's picture

history repeats because the passions of man never change.. bitchez.

Fri, 01/18/2013 - 11:34 | 3166211 Spastica Rex
Spastica Rex's picture

What we build collectively is described by our nature - like termites building mounds of mud.

Fri, 01/18/2013 - 11:39 | 3166239 The Juggernaut
The Juggernaut's picture

Whatever Jim Cramer says, simply do the opposite.  Obvi.

Fri, 01/18/2013 - 11:48 | 3166276 saints51
saints51's picture

I use the same approach when the vatican speaks.

Fri, 01/18/2013 - 11:54 | 3166298 redpill
redpill's picture

Just watch what happens when the Samsung Galaxy IV comes out in a few months.

Fri, 01/18/2013 - 13:28 | 3166626 SafelyGraze
SafelyGraze's picture

itunes

Fri, 01/18/2013 - 12:03 | 3166324 Yancey Ward
Yancey Ward's picture

They say you shouldn't commit suicide.

Fri, 01/18/2013 - 11:43 | 3166253 Oh regional Indian
Oh regional Indian's picture

Hmmm, wonder what that says about the Egyptians SR? Did we "pinacle" it back that long ago?

Apple seems to be a harbinger for the fall of many things. Apple shoudl die. It's been a social/societal disaster. THE iPod made morons of people. Inward looking morons to boot.

As for the rest, scary what this Stok's fall portends.

I say $100 or less in 6 months or less.

I hope Steve is slow roasting on an eternal flame.

 

Fri, 01/18/2013 - 11:56 | 3166301 Spastica Rex
Spastica Rex's picture

Maybe there is no pinnacle; maybe it's all just ridges and valleys, value in metaphor only.

Long time no see.

Fri, 01/18/2013 - 12:05 | 3166329 Oh regional Indian
Oh regional Indian's picture

I've been a "Watcher" lately. Interesting perspective as a non-commenter. :-)

Fri, 01/18/2013 - 12:56 | 3166530 nofluer
nofluer's picture

In an MIS class in 1989 we were required to contrast and compare Apple and IBM, and to project which we thought would live and which would die. I chose IBM to live, and Apple to die. One of my principle reasons was - at the time, Apple's "management" didn't understand the company or the culture they were "managing." I said, "unless Apple does something radical about their bad management, they're dead within 5 years."

As we all know, shortly after that paper, Apple brought Steve Jobs back home and, as they say, the rest is history.

Now we see a parallel situation. Apple's management is once again "not with the program", but this time there will be no bringing back Mr Jobs. For all its size, Apple has always been a niche company. As it is said, "the main business of business is business" and without translation programs and inefficient programs, Apple just doesn't DO "business." Apple computers are still essentially hippie toys and graphics machines. Had they tossed out their closed architecture when they brought Mr Jobs back they might now be a whole different company - and might have a chance at long term survival. But they didn't, so they aren't.

The only saving grace for Apple is, as I said in 1989, "it takes a long time for a $5 billion (then) corp to go down the drain." Looks like Apple is once again circling the strainer.

 

Fri, 01/18/2013 - 12:17 | 3166379 Stock Tips Inve...
Stock Tips Investment's picture

Apple is a great company. I'm sure in the future continue to surprise us with more and better products. The market is correcting the price of this stock. We'll see it starts to rise again.

Fri, 01/18/2013 - 11:22 | 3166139 StoleYourMoney
StoleYourMoney's picture

What goes up must come down!

Fri, 01/18/2013 - 11:23 | 3166152 jeff314
jeff314's picture

i told that to my wife last night

Fri, 01/18/2013 - 11:26 | 3166169 Frastric
Frastric's picture

What we need is for Tilson to get in on the fray in some desperate bullish last stand, then AAPL will go really rotten!

Fri, 01/18/2013 - 11:41 | 3166220 The Juggernaut
The Juggernaut's picture

Unsustainable demand gets really annoying.

Fri, 01/18/2013 - 11:45 | 3166260 Oh regional Indian
Oh regional Indian's picture

A certain inevitability to that in the supply side Jaggernaut whose death throes we are currently witnessing.

Fri, 01/18/2013 - 13:38 | 3166650 Matt
Matt's picture

And they just started work on their brand new super-lair too. A shame, really. In the interest of "saving face", I bet they do not stop construction, and squander the money instead of investing in R&D to develop new tech.

Fri, 01/18/2013 - 11:28 | 3166183 Manthong
Manthong's picture

Tyler must have William Tell manning the Bloomberg.

Fri, 01/18/2013 - 15:14 | 3167088 BlueCheeseBandit
BlueCheeseBandit's picture

So did I.

Fri, 01/18/2013 - 11:23 | 3166145 Stoploss
Stoploss's picture

AAPL don't fawl faw.

Fri, 01/18/2013 - 11:25 | 3166146 I am a Man I am...
I am a Man I am Forty's picture

now do an earnings comparison overlapping

Fri, 01/18/2013 - 12:10 | 3166351 Uber Vandal
Uber Vandal's picture

From November 26, 2012

 

I'm up 14% in just a few days in Apple, my last purchase of 506.50 paying off.  While everyone was touchdown dancing on Apple's demise, smart money was buying at these levels.  4th quarter is going to be strong.  GOOG was downgraded today, paging Reggie.  Of course ZH not doing any pieces on Apple dominating holiday sales, showing their extremely unhealthy bias against.  LMAO.

 

Fri, 01/18/2013 - 14:52 | 3166989 I am a Man I am...
I am a Man I am Forty's picture

I sold at $586 and bought back in at 510 and 486, apple crushed google last year.  Apple is going to beat earnings.  Glad your following what I've been saying though.  Did you buy HTWR, NUS, OAS, SWHC etc on my recommendations?

Oh, and assuming you don't believe the above exit I took, you are laughing your ass off being down 1%??  I'm down a 0.5% on my latest trade.  But long term holder since 220.  LMFAO

Fri, 01/18/2013 - 16:52 | 3167360 James_Cole
James_Cole's picture

The pin to 500 was predictable and well executed. Probably up from here.

Oh wait, I mean, apple is going to $100!!! Next week!!!!!!! March $10!! It's over, Jim Cramer's daughter doesn't even like aapl anymore!!!!

Oh and speaking of goog anyone see this funny tidbit?

http://www.reuters.com/article/2013/01/18/us-google-estimates-idUSBRE90H...

Fri, 01/18/2013 - 17:29 | 3167407 James_Cole
James_Cole's picture

500.00 close, nailed it!

Fri, 01/18/2013 - 11:23 | 3166147 nobusiness
nobusiness's picture

Don't you know, this time is different!

Fri, 01/18/2013 - 11:23 | 3166148 Inthemix96
Inthemix96's picture

Far too many people (sheep), are far too easily led.

There is only one winner folks, and it certainly aint you or I.

Fri, 01/18/2013 - 11:28 | 3166178 Frastric
Frastric's picture

Just those well informed... Shorted the stock around $660 after the peak, having looked back since... Plus added a put at 500...

Fri, 01/18/2013 - 11:24 | 3166150 Rainman
Rainman's picture

Iphone 10 with 10 rows of icons will price new at 84 bucks.

Fri, 01/18/2013 - 11:33 | 3166205 Unprepared
Unprepared's picture

.. seasonally, hedonically row-inflation adjusted price?

Fri, 01/18/2013 - 12:00 | 3166311 Silver Bully
Silver Bully's picture

'.. seasonally, hedonically row-inflation adjusted price?'

Row, row, row your boat- oh too late. This is the Titanic.

Fri, 01/18/2013 - 11:24 | 3166155 Frastric
Frastric's picture

One bubble burst, now on to Japan, Europe, TBTF, UK and finally USA...

Fri, 01/18/2013 - 11:27 | 3166156 Dr. Engali
Dr. Engali's picture

What Apple needs is an even larger phone and a smaller mini They can converge the two and call it the iPad Micro.

Fri, 01/18/2013 - 11:36 | 3166221 Spastica Rex
Spastica Rex's picture

If they build a device small enough, maybe it could be the iTampon.

Fri, 01/18/2013 - 11:38 | 3166232 Dr. Engali
Dr. Engali's picture

Set the phone on vibrate and it becomes a multi-functional device....I think we are on to something Rex.

Fri, 01/18/2013 - 11:52 | 3166292 Spastica Rex
Spastica Rex's picture

OMG

But hey, why the hell not? I'll start the prior patent search.

Fri, 01/18/2013 - 11:56 | 3166306 Dr. Engali
Dr. Engali's picture

LOl..

Fri, 01/18/2013 - 22:57 | 3168270 MeelionDollerBogus
MeelionDollerBogus's picture

Say Hellohhhh to iBrator - YouTube

Done.

Taken.

I know, you'd think this was a joke but ... while it is, obviously someone thought of it first.

Now try to replace THAT with "hedonic adjustment", Bernanke.

Fri, 01/18/2013 - 12:09 | 3166341 Stoploss
Stoploss's picture

iVibrator.

iVibrate.

Perfect gift for the wife.

Fri, 01/18/2013 - 12:13 | 3166360 Stoploss
Stoploss's picture

I got it.

Customized vibrator attachments programmable to which ever level of vibration is desired.

Although video and pics would be nice to add, AAPL has camera / video issues as well as navigation issues.

So, we will have to call Samsung on this one i think.

Fri, 01/18/2013 - 11:25 | 3166160 DeadFred
DeadFred's picture

Tyler, do you ever scare yourself when you're so right?

Fri, 01/18/2013 - 11:25 | 3166162 citizen2084
citizen2084's picture

So is the scale of absolutle price difference between the two stocks another alternative inflation measure? 

peAce

Fri, 01/18/2013 - 11:25 | 3166163 The Final Countdown
The Final Countdown's picture

Goes to show the nifty things you can do with graphs if you scale, stretch and shift them properly. Anything is possible!

Fri, 01/18/2013 - 11:35 | 3166214 Dr. Engali
Dr. Engali's picture

Let me guess...you bought above $700 and you just know it's going to come back.

Fri, 01/18/2013 - 11:47 | 3166262 The Final Countdown
The Final Countdown's picture

Not really, though I wouldn't mind betting that before you know it, AAPL will be back above $600 after earnings.

Fascinating how negative sentiment towards AAPL is so strong among ZeroHedgers that they suddenly fail to recognize the ridiculously obvious manipulation going on with this particular stock. 

Fri, 01/18/2013 - 11:53 | 3166294 Ying-Yang
Ying-Yang's picture

Then you say BUY BUY BUY

Fri, 01/18/2013 - 12:04 | 3166327 The Final Countdown
The Final Countdown's picture

I have no personal interest in AAPL stock, just stating my observations. Somehow it appears to be hard for some to separate the two things when AAPL is involved. 

Fri, 01/18/2013 - 12:00 | 3166313 I am a Man I am...
I am a Man I am Forty's picture

I bought at $510 and backed up the truck at $486 (already own in the low 2's).  ZH thinks it's going to $300 according to this, Apple will have $300B in cash before it gets to a stock price of $300.

Fri, 01/18/2013 - 12:01 | 3166317 Dr. Engali
Dr. Engali's picture

I won't be surprised to see Apple above 600 again but it will be very temporary on short covering as sentiment gets too negative. The bottom line is Apple is old news and they no longer have the best phone on the market. If they don't make a big splash into tv world Apple is done as a driving force.Their stock will be a trading vehicle just like Mr. Softy.

Fri, 01/18/2013 - 12:12 | 3166354 The Final Countdown
The Final Countdown's picture

AAPL has been a trading vehicle for years since the company started to regain relevance. I fail to see how anyone could even consider comparing MSFT stock performance to AAPL to infer anything about its future direction. Especially not if the assumption is that it will go down in the long term. MSFT has basically been locked in the same trading range near its all-time highs for the past 10+ years. 

Fri, 01/18/2013 - 12:23 | 3166394 Dr. Engali
Dr. Engali's picture

A trading stock is a stock that finds it's range and stays there. Microsoft like Apple was a great investment at one point in time so you held on to it. Once the momo was gone you got out and trade the range. Microsoft between $25 and $35 is a great trade. Anything beyond that is dead money. Apple will play out the same way.

Fri, 01/18/2013 - 12:02 | 3166323 MiltonFriedmans...
MiltonFriedmansNightmare's picture

AAPL bears should ask themselves why the price discovery mechanism is broken in every "market" and functional only when applicable to AAPL.  Why the apparent dichotomy?  It reeks of manipulation, imo.  APPL soars past 1000 on one last great blow-off top before this "market" finally gives it up.

Fri, 01/18/2013 - 11:40 | 3166241 Unprepared
Unprepared's picture

Prices are fractal, but it's not like Tyler is comparing a one-day MSFT graph to 5-year AAPL.

Fri, 01/18/2013 - 11:26 | 3166164 Cursive
Cursive's picture

I remember when AAPL was the shit and then they released the "Lisa" and then kicked Steve Jobs out and then Mr. Softee dominated tech throughout the 90's and then AAPL hired Steve Jobs backed and....anyway, Steve Jobs is gone now, so you should either sell whatever AAPL stock you may still own or just not buy it if you don't have it.

Fri, 01/18/2013 - 11:44 | 3166255 Unprepared
Unprepared's picture

Have some faith. Just like Jesus, Jobs will be resurrected for 3 trading sessions and AAPL will soar.

Fri, 01/18/2013 - 11:26 | 3166166 realtick
realtick's picture

Who's a bigger putz - Cramer or Weisenthal?

Fri, 01/18/2013 - 11:42 | 3166199 Ham-bone
Ham-bone's picture

with all defference to douchebag Cramer, Weisenthal is the greatest loser.

Also think Businessinsider is a prime portal or disinformation and propaganda...site is one of the worst I've read but actually important to read their headlines as it appears they are dissemenating the downfield propaganda to shape conversations.

Fri, 01/18/2013 - 11:26 | 3166171 ericfoster3
ericfoster3's picture

NEWSWIRE: Panicking Apple Board Of Directors Attempt To Restart Steve Jobs

Fri, 01/18/2013 - 11:32 | 3166201 Aziz
Aziz's picture

AAPL was great stock to starting owning in 2004. That's when AAPL was the exciting new thing. Jim Cramer was like 9 years too late.

Fri, 01/18/2013 - 11:37 | 3166226 css1971
css1971's picture

Sounds to me like Jim Cramer timed it to perfection.

Fri, 01/18/2013 - 11:35 | 3166217 CheapBastard
CheapBastard's picture

I left AAPL when Steve did. It's now too risky without him at the helm. Plus, I never look profits in the face and take them for granted.

I'm a Cheap Bastard.

Fri, 01/18/2013 - 11:36 | 3166225 mess nonster
mess nonster's picture

Microsoft- a bitched-up OS designed to make DOS look like Apple.
Apple- A bitched up business plan designed to operate like Microsoft.

No wonder they look alike.

Fri, 01/18/2013 - 11:46 | 3166263 secret_sam
secret_sam's picture

      Apple- A bitched up business plan designed to operate like Microsoft.

I'm no Apple fanboi, but compared to MS's hardware offerings, they look like super-geniuses.

Fri, 01/18/2013 - 11:49 | 3166278 Oh regional Indian
Oh regional Indian's picture

 Brilliant inverse juxta-positional observation there mess.

Fri, 01/18/2013 - 11:42 | 3166249 secret_sam
secret_sam's picture

I admit, I'm somewhat suprised the various market indices haven't followed AAPL's performance a bit better.

Fri, 01/18/2013 - 11:43 | 3166252 disabledvet
disabledvet's picture

"after shorting this bitch to split adjusted 5,000 a share we finally covered at a split adjusted 2500 for a mere paper loss of 100 billion with potential for infinity losses." give it up Tylers Durden. This company was left for dead...Steve Jobs save it that Apple gang turned it into a wealth machine not even he believed in. (All his holdings were in that dog Disney.) hurray for Team Apple. All credit goes to them and the rest of the West Coast Digitati. While the rest just count their money at someone else's expense Apple shows the way of true wealth creation...through hard work and "imagineering." we haven't heard the last of Team Apple nor of the West Coast style that the world first heard in music back in the sixties. "California deamin'" on such a dreary query.

Fri, 01/18/2013 - 13:15 | 3166594 nofluer
nofluer's picture

At Apple the flavor of the weak is always "self-delusion".

Didn't one of the Mamas and the Papas die of a drug OD? Like I said above... "Apple computers are still essentially hippie toys and graphics machines.”

Fri, 01/18/2013 - 13:29 | 3166627 ironsky
ironsky's picture

Think it was a grilled ham and cheese OD.

Fri, 01/18/2013 - 11:50 | 3166277 chaartist
chaartist's picture

hyperinflation will take it to the moon.

Fri, 01/18/2013 - 13:19 | 3166603 nofluer
nofluer's picture

hyperinflation will take it to the moon.

Yep. Price up, value flagging... fast.

Fri, 01/18/2013 - 11:52 | 3166289 mr_bad
mr_bad's picture

I would say that it has to be a little bit different this time because Apple is nowhere near as shitty as Microsoft in terms of quality.

Fri, 01/18/2013 - 22:51 | 3168256 MeelionDollerBogus
MeelionDollerBogus's picture

Ya... Apple is worse ...

the one good thing it has is that OS X is Linux.

Fri, 01/18/2013 - 11:52 | 3166291 q99x2
q99x2's picture

Cramer took up acting when he couldn't make it as a trader.

Fri, 01/18/2013 - 11:56 | 3166304 Floodmaster
Floodmaster's picture

Atari,Commodore,Coleco,Sinclair,Tandy,Texas Instruments(TI),TRS and Apple have the same business model.

Fri, 01/18/2013 - 12:02 | 3166318 tawse57
tawse57's picture

There are a bunch of options about to expire at midnight tonight - if they expire under 500 bucks a lot of banks and hedgies make a SERIOUS amount of money.

Then on Monday futures they can pump again.

Fri, 01/18/2013 - 12:17 | 3166376 Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture

AppleSoft BASIC > Integer BASIC

 

CALL -151 BITCHEZ!

Fri, 01/18/2013 - 12:23 | 3166400 NeedleDickTheBu...
NeedleDickTheBugFucker's picture

MSFT - Stock peaks, Gates steps down and the stock heads south.

APPL  - Stock peaks, Jobs dies and the stock heads south.

 

The departure of the iconic CEO is a winning short strategy over the long term (also see C, GE)

Fri, 01/18/2013 - 12:26 | 3166412 reader2010
reader2010's picture

The lesson of history has shown again and again people don't learn from history.

Fri, 01/18/2013 - 12:44 | 3166475 Tombstone
Tombstone's picture

All trends end.  Although, CrabApple could be forming a downside wedge over the last few months for a possible retest of $600.  All super enterprises stagnate eventually as competition catches up.  For many of the major biggies of yesteryear, their stock prices stagnate and your returns are made by dividend increases.  Remember when they projected Qualcom to about $2,000, I think it was back in the late 1990s?  Still hoping on that one.  Apple may yet hit $1,000 or more, but it will be a limited event.

Fri, 01/18/2013 - 12:46 | 3166486 DeficitAlchemist
DeficitAlchemist's picture

Chart ties up with a sub $300 target I have technically..

 

http://www.youtube.com/watch?v=2bOfGeRK5Tw

Fri, 01/18/2013 - 13:49 | 3166689 geoffr
geoffr's picture

I'm sorry but there is one huge difference.

 

MSFT at its peak had a 88 P/E. AAPL had about a 15 P/E, which given the amount of cash it has was not high.

I'm sorry, but the fundamentals don't justify the current price. Maybe it isn't a high growth stock anymore, but given its P/E and cash its price is too low.

Fri, 01/18/2013 - 14:40 | 3166923 Diablo
Diablo's picture

Amateurish.

Any particular reason why youre using a liner chart instead of a logarithmic chart (besides the obvious reason?)

 

 

 

 

Fri, 01/18/2013 - 15:05 | 3167045 Cromwell
Cromwell's picture

doesn't every single stock chart in the history of markets track this arc at some point in time?

Fri, 01/18/2013 - 22:47 | 3168251 MeelionDollerBogus
MeelionDollerBogus's picture

#winning

the msft vs aapl chart is priceless, wish I'd done it.

aapl 2013 jan long-term curves 01 goldpricemodel

aapl 2013 jan long-term curves 02 goldpricemodel - not as good but still useful

Fri, 01/18/2013 - 23:01 | 3168280 MeelionDollerBogus
MeelionDollerBogus's picture

if an 'american' drops aapl's too close to the road, will polishes other terds happening at such capitalismic roadside kiosks ?

- 'anamerican'

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