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"The Apple Conundrum": Why One Fund Is Not Buying The iKool-Aid

Tyler Durden's picture





 

Looking at the parabolic rise in AAPL shares in the past 3 months one would imagine that the company's product line up, so well telegraphed over the past several years, has changed, or at least has found a way to cure cancer, while expanding margins, and also providing loans to cash-strapped US consumers to buy its products exclusively. Truth is nothing substantial has changed - we have merely seen a ramp as every hedge fund and asset manager jumps on the Apple bandwagon (we fully expect at least 250 funds to hold Apple as of March 31: at least 216 were in the stock as of December 31 and then even Dan Loeb jumped in after) which is fun and games on the way up, but pain and tears when the bubble finally does pop. Many have attempted to warn the public about the latest manic phase of Apple expansion, but few have succeeded - such as the the reality of bubbles: they pop when you least expect them. Yet giving it the old college try, here is Obermeyer Asset Management's John Goltermann with an extended commonsensical approach to his perspective on the company with two main growth products, and why unlike everyone else, he is not buying the iKool-Aid.

Some excerpts from the letter:

Most members of the Obermeyer Asset Management team use Apple’s products and highly respect the company and its achievements. We recognize that it has built a cult-like following of both technophiles and ordinary users who aspire to own its latest and greatest gadgets. We recognize the elegance of its platform, the ease, convenience and life-enhancing attributes of its apps, the effortless delivery of media content and how it has even transformed entire industries. We recognize the style element of owning Apple devices, we recognize the status that people derive as Apple users and we understand the mystique the company possesses in the way it operates.

 

Given our shared appreciation for Apple as a company, why aren’t we making a place for it in client portfolios? We generally separate current and prospective investments into three broad categories: Yes, No and Too Difficult. In the case of Apple, we see this investment as Too Difficult. Let us explain:

 

With a market value of $550 billion, Apple now comprises 4.4% of the S&P 500 index and, all by itself, is larger than the entire utilities industry. With 932 million shares outstanding, every dollar move in Apple’s share price represents nearly $1 billion in net new capital flowing to its shares. For context, the median company size of those in the S&P 500 is $12 billion, so a 2% move in Apple’s stock is the equivalent of adding a whole new company at the median value to the index.

 

Since December 31st, Apple’s market value has increased by $172 billion, which is roughly the size of Johnson & Johnson, a large, well-established, innovative healthcare and consumer products company with a 125-year history. Johnson & Johnson has enjoyed many successes, has reinvested high levels of profit and is investing to expand its divisions, products and businesses. Apple attracted the same amount of investor capital in two and a half months that Johnson and Johnson attracted in its entire 125-year history.

 

...

 

Apple launched its first iPad in April 2010 and is now on its 3rd version, so the iPad has about a two-year shelf life for the company (it might milk a few more years out of each version, but the company’s business model is to continually launch new product iterations and slash prices on the older versions). Though it’s not disclosed in the financials, a guess would be that the new iPad will sell 26 million units its first year and 14 million in its second. If each version of the iPad earns $260 per unit, then Apple investors can expect somewhere in the range of $10 - $15 billion in total pre-tax profit for this newest version of the iPad. Unless investors thought Apple’s stock was way too cheap before the new iPad announcement, they seem to be expecting much more value to be delivered to shareholders from the iPad launch than can be reasonably be delivered by sales of the iPad device itself. The $172 billion increase in the company’s value far exceeds the approximately $15 billion that will come from the iPad, so it will have to come from something else. We don’t know yet what that “something else” is.

 

When we look at our cash flow models, assuming Apple can maintain its current operating margins (a heroic assumption in the face of increased competition in the tablet market), to justify the current stock price, it appears to us that Apple will have to sell about $2.6 trillion worth of total products and services over the next ten years. Last year’s revenues (for the fiscal year ending 9/24/11) totaled $108 billion. If Apple’s margins shrink, it will have to sell a lot more. This level of Apple product sales will make up almost 1.5% of U.S. GDP (of course it  also sells products outside of the U.S.). That means that with the average GDP per capita in the United States being around $50,000, each person must spend $750 on Apple products and services annually (since 30% of sales are domestic, this means that about $225 per U.S.  citizen would go to Apple every year). Since not all 310 million people in America use Apple, those who do need to spend a lot more and the vast majority of those sales will need to be on devices because iTunes sales do not bring much profitability.

Like we said: no stories here. Just common sense.

Full letter (pdf)

 

 


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Thu, 03/29/2012 - 11:30 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

This market is narrowing down to a point, and Apple is the point. When Apple breaks, LOOK OUT BELOW.

Thu, 03/29/2012 - 11:33 | Link to Comment a growing concern
a growing concern's picture

Will its descent speed be approximately 9.8 m/s2?  Accounting for air resistance, of course.

Thu, 03/29/2012 - 11:37 | Link to Comment SilverDOG
SilverDOG's picture

Applesauce Bitchez!

Thu, 03/29/2012 - 11:52 | Link to Comment tmosley
tmosley's picture

Jackie, it's hunting season.

http://www.youtube.com/watch?v=MZ70hbvaPdU

Thu, 03/29/2012 - 11:58 | Link to Comment NotApplicable
NotApplicable's picture

[threadjack]

I just went to RonPaul2012.com and saw Professor Fekete listed as a recent donor for the current money bomb.

[/threadjack]

Thu, 03/29/2012 - 12:05 | Link to Comment Ahmeexnal
Ahmeexnal's picture

John Galt also donated.

Thu, 03/29/2012 - 12:17 | Link to Comment markmotive
markmotive's picture

A lot of euphoria around this company.

Some nuggets of info:

  1. Market cap is larger than XOM. Bigger than WMT and MSFT combined.
  2. Many investors are too optimistic about forward growth.
  3. Price is well-above 200-day moving average.

http://seekingalpha.com/article/437221-apple-a-small-dose-of-reality

Thu, 03/29/2012 - 14:33 | Link to Comment SAT 800
SAT 800's picture

Short it right now. This is what bubbles look like;and this is where they come from; public enthusiasm.

Thu, 03/29/2012 - 11:58 | Link to Comment Levadiakos
Levadiakos's picture

open wide teabagger "O"

Thu, 03/29/2012 - 12:28 | Link to Comment Carl Spackler
Carl Spackler's picture

"Applesauce" is the best term I have heard.

The numbers comprising the fundamentals are astounding.

The business model of Apple seems to have been infected by a worm...the fact that batteries can not facilitate more tablet technology without cooking the device into an apple pie.

Thu, 03/29/2012 - 15:41 | Link to Comment Spastica Rex
Spastica Rex's picture

+1 extremely clever

Thu, 03/29/2012 - 20:34 | Link to Comment RussellChester8
RussellChester8's picture

my friend's sister makes $74/hr on the computer. She has been out of a job for seven months but last month her check was $17871 just working on the computer for a few hours. Read more on this site .... http://bit.ly/wYpMrv

Thu, 03/29/2012 - 12:20 | Link to Comment gcjblack
gcjblack's picture

Will Apple be limited to falling due to gravity alone, at 9.8 m/sec^2 ?

Once it starts down, powered flight ( all engines with full after-burners spooled up to maximum thrust) will permit much higher velocities to be achieved as it flies towards a new Ground Zero.

Thu, 03/29/2012 - 12:41 | Link to Comment PersonalRespons...
PersonalResponsibility's picture

idrop

Thu, 03/29/2012 - 13:28 | Link to Comment poor fella
poor fella's picture

Imagine the Apple logo on WTC Building 7 then?

Thu, 03/29/2012 - 12:10 | Link to Comment patience...
patience...'s picture

Absolutely, it's the best of a bad situation.

In the meantime the  "Obermeyer Asset Management " has been missing out on some major returns.

 


Thu, 03/29/2012 - 15:05 | Link to Comment jcaz
jcaz's picture

not really, because most knuckleheads in this deal won't sell until it's back down to $150-  seen this movie before, always ends the same way.....

Thu, 03/29/2012 - 12:33 | Link to Comment vast-dom
vast-dom's picture

Common sense Ty? If there were any Apple wouldn't be valued anywhere near this utter bs! 

this stock is literally double its true price. and the experts are still pushing it. i could give a shit about their expert opinions when the stock tanks.

Thu, 03/29/2012 - 11:32 | Link to Comment a growing concern
a growing concern's picture

My iPhone cures cancer, doesn't yours?  

Thu, 03/29/2012 - 11:42 | Link to Comment brewing
brewing's picture

they're going to have to do something about cost to wireless carriers.  the majors lost their ASS last year selling it.  i work in the industry, and have been hearing whispers that 1 or more may drop apple products...

Thu, 03/29/2012 - 12:12 | Link to Comment patience...
patience...'s picture

Wispers my ass, shoot yourself in the foot by dropping your mayor player, laughable.

Thu, 03/29/2012 - 15:44 | Link to Comment Spastica Rex
Spastica Rex's picture

English isn't like Latin. "Js" don't sound like "Ys."

Thu, 03/29/2012 - 12:29 | Link to Comment iDealMeat
iDealMeat's picture

+1,  the iPhone is a squid, sucking margin monthly.. Drop it or die..  Sprint is about to fold..

Thu, 03/29/2012 - 12:37 | Link to Comment brewing
brewing's picture

this paints the picture pretty well.  in the end, the consumer is the loser everytime...

 

http://money.cnn.com/2012/02/08/technology/iphone_carrier_subsidy/index.htm

Thu, 03/29/2012 - 14:35 | Link to Comment SAT 800
SAT 800's picture

Short it; do it right now; make the market pay you. I'm sincere; it's ripe.

Thu, 03/29/2012 - 14:58 | Link to Comment geewhiz190
geewhiz190's picture

how do wireless carriers lose money when the cost of running one of those ipads is an arm and a leg? i would think their revenues would be up based on data demand.

Thu, 03/29/2012 - 11:46 | Link to Comment t_kAyk
t_kAyk's picture

My blackberry causes cancer

Thu, 03/29/2012 - 11:51 | Link to Comment tocointhephrase
tocointhephrase's picture

i

Thu, 03/29/2012 - 11:33 | Link to Comment Stuck on Zero
Stuck on Zero's picture

They used to say: "No one ever got fired for going with IBM." 

Thu, 03/29/2012 - 11:49 | Link to Comment Kayman
Kayman's picture

And Harold Geneen built a pulp mill where there were no trees.

Beware thine own press clippings.

Thu, 03/29/2012 - 11:52 | Link to Comment GeezerGeek
GeezerGeek's picture

Many IBM mainframes in the early 80s needed water cooling. I hear that the new Apple product gets a bit warm, too. 

Thu, 03/29/2012 - 12:10 | Link to Comment GMadScientist
GMadScientist's picture

The homeless gadget collector considers this a feature; transferring energy from the socket at the Starbucks to the device for cozier latenight napping.

And my overclocked i7 is water-cooled too...so what? ;)

Thu, 03/29/2012 - 12:07 | Link to Comment Ahmeexnal
Ahmeexnal's picture

And you don't need a PhD in fuzzix to figure that one out.

Fri, 03/30/2012 - 17:34 | Link to Comment Sokhmate
Sokhmate's picture

Fuzzix: physics of the alternate universe. Just fyi for the not-knowing.

Thu, 03/29/2012 - 13:07 | Link to Comment Mercury
Mercury's picture

Stay away...but short a cult stock at your own risk.

In any case the easy money has been made and the rainmaker is gone.

The "life-enhancing attributes" of Iphone/pod apps is a bit of a stretch too...kiddie-crack for the most part.

Thu, 03/29/2012 - 14:36 | Link to Comment SAT 800
SAT 800's picture

The risk is always limited with a stop loss order; the chart looks like its ripe to me. You can't win if you don't play.

Thu, 03/29/2012 - 11:35 | Link to Comment Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

It's only pain and tears if you're still holding it on the way down. I think we'll know when the bubble's popped. Until then, please keep buying Apple stock and Apple toys.

 

Thank you.

 

As you were.

 

SGFTQEF,A?

Thu, 03/29/2012 - 11:45 | Link to Comment SheepDog-One
SheepDog-One's picture

Keep buying Apple stock please, retail sucker, er I mean Apple genius...because someone dumber is trying to sell Apple stock....heh heh.

Thu, 03/29/2012 - 12:18 | Link to Comment Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

You must feel so smart being a contrarian. Now be a good mutt and roll over.

Thu, 03/29/2012 - 11:35 | Link to Comment alexwest
alexwest's picture

whatever...
why would this guy think he is smarter than rest of ? can I see his trading record ? is he Soros/Buffet/Paulson/etc kind of guy? or just missed THE THING..

and yes Apple is bubble , and will end in tears, but nobody knows then

alx

Thu, 03/29/2012 - 11:44 | Link to Comment Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

You spelt it wrong. Not Soros, it's Gorog.

 

Regards

 

SG,A?

Thu, 03/29/2012 - 11:46 | Link to Comment SheepDog-One
SheepDog-One's picture

I dont know if he trades based upon insider info like Soros and Buffet.

Thu, 03/29/2012 - 11:36 | Link to Comment zuuma
zuuma's picture

Apple 2012 = Tulip Bulbs 1636

Thu, 03/29/2012 - 11:43 | Link to Comment AN0NYM0US
Thu, 03/29/2012 - 11:40 | Link to Comment monopoly
monopoly's picture

"Common Sense". Please, this is the stock market. That phrase is banned here. Oh well.

Thu, 03/29/2012 - 11:44 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

Is Apple a Chinese Company?

Thu, 03/29/2012 - 11:44 | Link to Comment CClarity
CClarity's picture

Better have a lot of pesticides . . . can't let a worm get into apple.

Thu, 03/29/2012 - 11:45 | Link to Comment JustObserving
JustObserving's picture

With apple stock you can buy all the silver bullion in the world 17 times over.  Or about 1/6 th of the gold bullion in this world.

Thu, 03/29/2012 - 12:04 | Link to Comment Overflow-admin
Overflow-admin's picture

The AAPL:SILVER ratio says it's time to sell your AAPL shares for physical, bitchez!

Thu, 03/29/2012 - 11:48 | Link to Comment SheepDog-One
SheepDog-One's picture

As a general rule, I say 'No thanks' to bubble mania stock ramps and sleep better. 

Thu, 03/29/2012 - 11:48 | Link to Comment KandiRaverHipster
KandiRaverHipster's picture

ughhhhhhhh

Thu, 03/29/2012 - 11:51 | Link to Comment Aunty Christ
Aunty Christ's picture

Folks, Apple is a consumer products company, subject to the whims of its customers. There was a time when its products were out of fashion. They are hot now. There'll be a time when they are not cool anymore.

Thu, 03/29/2012 - 12:00 | Link to Comment Conman
Conman's picture

i keep thinking the same, but it seems like apple is that attainable luxury item these days. Kind of like Coach bags. They are kind of expensive but not really out of reach for the avg consumer. So until it loses that status itll keep selling although Android tablets and phones od the same for less money.

Thu, 03/29/2012 - 13:44 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

Apple's products were out of fashion 15 years ago because they weren't that good. They've fixed that problem.

No, Apple will crash when they saturate their market, and can't launch new products quickly enough to make up the difference. Which isn't too far off.

Thu, 03/29/2012 - 15:54 | Link to Comment Spastica Rex
Spastica Rex's picture

I will take issue with this. DISCLOSURE: I fucking hate Apple.

15 years ago System 7 was what Macs ran. It was far to what MS offered. I managed large installations of both; there was no contest. 15 years ago, MS was a juggernaut. Macs became eclipsed even in the education space. This was due primarily to marketing, and the tipping point that MS engineered.

I hope Apple dies; they are as evil as MS ever was.

Fri, 03/30/2012 - 05:33 | Link to Comment vato poco
vato poco's picture

Agree on the inevitable 'ran out of cool new gadgets to sell and crashed' thing. IIRC, there was a time when Sony was going to own the world. Sony still makes good stuff, but...the cachet - and the stock - ain't what it once was.

Thu, 03/29/2012 - 14:04 | Link to Comment rosiescenario
rosiescenario's picture

Please provide a date....on a lng enough time line....

Thu, 03/29/2012 - 11:57 | Link to Comment JW n FL
JW n FL's picture

 

 

http://www.youtube.com/watch?v=0nipR-FEL_w

Newmont CEO on Gold Market, Peru Project Review

P.S. they are Hiring AROUND the World! and Can NOT! find enough people!

Thu, 03/29/2012 - 11:55 | Link to Comment Village Smithy
Village Smithy's picture

They fiddled while Rome burned, we played "Angry Birds" while our nation became a debt slave.

Thu, 03/29/2012 - 11:55 | Link to Comment CheapBastard
CheapBastard's picture

I never buy at the HIGH......

 

I'm a Cheap Bastard.

Thu, 03/29/2012 - 11:59 | Link to Comment stickywicket
stickywicket's picture

this market is so narrow it is coming to the head of a pin! It's the pin head market:)

Thu, 03/29/2012 - 11:59 | Link to Comment sojourner_man
sojourner_man's picture

Can you say -- spell -- B U B B L E ??

And they insist one can't spot a bubble before it pops!

Thu, 03/29/2012 - 12:00 | Link to Comment NotApplicable
NotApplicable's picture

I got a new Acer tablet at work this week, and my iTouch is now collecting dust.

Thu, 03/29/2012 - 12:01 | Link to Comment Dr. Engali
Dr. Engali's picture

 

Apple has a nice product and it's pretty cool ,but I also remember when there were lines to get the next version of Microsoft Office. Look at it now. It's at best a tolerated company.

Thu, 03/29/2012 - 12:02 | Link to Comment beaker
beaker's picture

Reminds me of the Chairman of the Board listens to a report where every one of his managers tell him everything is so good that it can't get any better.

"Can't get any better?" he asks.

"That's right!"

"Excuse me for a moment, gentlemen.  I'll be right back."

Next the Chairman steps outside of the board room and calls his broker on his cell phone.  "Sell every fucking share of this company that I have!"

Thu, 03/29/2012 - 12:04 | Link to Comment Widowmaker
Widowmaker's picture

I share the concerns of the author, with one exception.

AAPL is eating pie from literally every other technology company out there from hardware mfgs to cable TV operators.

It is no longer as high of function of product innovation being the driver going forth (short term) as much as competition collapse.

 

Thu, 03/29/2012 - 12:56 | Link to Comment beaker
beaker's picture

True, but is that priced in at these levels?  Remember that (at least in what was once a normal world) stock prices today reflect the outlook 12-18 months in advance.

Thu, 03/29/2012 - 12:05 | Link to Comment penexpers
penexpers's picture

We don’t know yet what that “something else” is.

Hmm, how about iTranshuman? You know those hipsters and trendies will augment themselves with iNanos to one and for all merge with the Apple's iHive.

 

Thu, 03/29/2012 - 12:06 | Link to Comment WhOracle
WhOracle's picture

seems pretty obvious that something else is the true Apple TV set...

Thu, 03/29/2012 - 12:10 | Link to Comment SoundMoney45
SoundMoney45's picture

Apple created the iPod to monetize the market Napster initially defined, and the iTunes store with Steve Jobs personally negotiating with the record labels. Apple created the iPhone by obtaining largely unconstrained phone behavior in exchange for exclusivity, again something Steve Jobs personally negotiated. A third, and perhaps a fourth industry redefining products appear to be currently priced into Apple.  That said, buying Apple now and watching it fall to 300 is still a better investment than non-ECB owned Greek bonds.  

Thu, 03/29/2012 - 12:12 | Link to Comment devo
devo's picture

This can't end well.

Huge pressure on Apple this earnings season.

Thu, 03/29/2012 - 12:16 | Link to Comment monopoly
monopoly's picture

Apple is a great company with great products. What we are arguing about is its valuation. Absurd to the extreme. I love Apple products but 600+. Sorry, cannot drink anymore Cool Aid.

And maybe, just maybe.......the break? 0

Thu, 03/29/2012 - 12:26 | Link to Comment devo
devo's picture

The products seem to be in decline, if you're being honest.

e.g. Ipad 3 overheating and underwhelming, iphone 4 antenna issues and underwhelming overall, no new products just reiterations of past products. They also charge a premium for dated specs, notably on laptops.

There's a lot of pressure to come up with new products. I guess they're banking on their TV set being viewed as revolutionary...but is that really going to fuel the growth engine? I imagine the price point will be too high for Joe Sixpack. Then he has to pay for cable on top of it? High end TV business is meh.

The one thing I admire about Apple is they understand aesthetics and form. Samsung is starting to design nice looking machines, and their specs are much better than a macbook.

 

Thu, 03/29/2012 - 12:17 | Link to Comment devo
devo's picture

Apple at $450 seems fair. An investor must factor in down side, not just upside (e.g. low forward p/e, etc).

Google is in for some hurt, too. For some reason investors never learn with Google. It gets crushed a lot and never breaks out. I think $550 is fair, though that's still risky. I had it at $490 last year and felt that was a good entry point. 

 

Thu, 03/29/2012 - 12:18 | Link to Comment monopoly
monopoly's picture

Remember, as Apple goes, so goes the market, at least short term. Confetti still looks good here. And our miners. Yikes, at some point the trade of the decade. But when???

Thu, 03/29/2012 - 12:21 | Link to Comment monopoly
monopoly's picture

BBY may have been the straw that broke the Techs back. Apple just following down. Best Buy is history. Slowly going the way of Circuit City. Amazon eating them up. But $200.00 for AMZN with .48 cents in earnings. I think not.

Thu, 03/29/2012 - 12:30 | Link to Comment devo
devo's picture

Amazon is a good short. I got it last earnings season.

Amazon's biggest problems is low (and lowering) margins. It's a big ouch.

Thu, 03/29/2012 - 12:27 | Link to Comment carbonmutant
carbonmutant's picture

Buyers will always pay more for leverage...

Thu, 03/29/2012 - 12:47 | Link to Comment Diet Coke and F...
Diet Coke and Floozies's picture

This stock screams OTM Put Option... Nassim Taleb style.

Thu, 03/29/2012 - 12:51 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

I can rip this analysis apart easily.  These guys don't realize that stocks trade at multiples of earnings and the growth is coming from China, Brazil, iPhone5, iTV, corporations.  Focusing just on the US is stupid.  They have barely put a dent in China.

This blog has become the laughing stock of the world when it comes to Apple.  Why don't you post some analysis that is actually comprehensive and someone who understands that stocks trade at multiples of earnings.  The stock was also very cheap with its growth prior to this latest run up.

This is common sense.  Been defending apple on this board 200% ago.  When I see bullshit I call it out.

 

Thu, 03/29/2012 - 13:53 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

I've been a big AAPL defender. Everything you say is true. But if the entire market turns and tanks, and P/E's drop to an average of, say, 7... that means that AAPL is gonna take a big haircut, even if they keep growing.

This is a narrowing market and narrowing markets are traps.

Thu, 03/29/2012 - 14:24 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

if the market tanks, the market tanks, and everything will go with it, but that isn't what their analysis is based on.

Thu, 03/29/2012 - 14:30 | Link to Comment Agent P
Agent P's picture

It's hard for a company of Apple's size to keep throwing off exponential y/y earnings growth.  Even if they ramp sales in China, which keep in mind is still largely a wealthy country of pour people, are they really going to get people to drop iProduct v.X for iProduct v.X+1 every 12 to 18 months?  I would argue that trend is going to quickly decline in the Western world as well.  Look at iPad 3 vs. iPad 2...do you think the differences are worth the upgrade?  Also, look at product cannibalization...iPod sales in decline as iPhone sales ramp...what happens as smartphones and tablets converge? 

Don't get me wrong, Apple will continue to churn out great products that people will want, but as soon as one product fails to generate the growth people have come to expect, the stock is going to correct hard.

Thu, 03/29/2012 - 15:10 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

you are correct, this will eventually happen, the question is when, I think there is at least 2 years of growth from here, then who knows, can't see any further than that.  And I don't think people need to upgrade from the iPad 2 for the iPad 3 to have great sales.

Thu, 03/29/2012 - 17:17 | Link to Comment Agent P
Agent P's picture

I'm more skeptical than you.  I think a big miss will come within the next 12 months.  iPhone 5 will be successful, but I think iTV (the actual set, not the current STB) whenever it is launched is going to be a flop...I think Apple is going to feel the need to push into a totally new product line as marginal growth in tablets and phones slows from fewer people upgrading to each new iteration.  If iTV is the chosen path, look out!  TVs are very price competitive, and I think few people will be willing to shell out premium dollars for a status symbol that they can't show off in public.

Full disclosure though, I thought the iPad was going to be a non-event (why does anyone with a laptop and a smartphone need a tablet?)...I couldn't have been more wrong on that one.

Kudos to you for making money in the stock...just be careful not to become so enamored with the company that you fail to see the turn.  

Thu, 03/29/2012 - 13:11 | Link to Comment FranSix
FranSix's picture

AAPL is the HM of the contemporary deflation.

Thu, 03/29/2012 - 13:21 | Link to Comment vh070
vh070's picture

Geeze I wish I could spend only $225 per annum on Apple.  But with a family of five who won't tolerate minimum spec, it's probably somewhere around 10X's that.  And I'm still holding back: it's way past the time to update my 13-year old Cinema Screen with a new, bigger screen that will probably cost 1/3 the sticker price (1/4 if I go off-brand).  My bro', who's got a family of six, doesn't spend any less.  Dang but if we didn't create a monster!

Thu, 03/29/2012 - 13:25 | Link to Comment Dingleberry
Dingleberry's picture

I like Apple. I use their stuff a lot. But Apple is like Harley Davidson. It may not be the best, but having one makes you feel like you have a big dick cause it costs the most and makes you looks cooler than your friends.  Same with Apple. Kids use it as a status symbol. Period. End of story.  They can't afford "real" status symbols like Beemers or McMansions, so they judge each other by their having the latest and greatest iPhone.  In other words.....IT'S COOL TO OWN AN IPHONE.  Eventually, Apple will come down to earth. And another company will be "cooler".   But if you can make some money by striking the iron while it's hot, good for you. Just don't load up on this shit for junior's college fund.

Thu, 03/29/2012 - 13:30 | Link to Comment Stubert
Stubert's picture

Why couldn't Boom Bust Blog just write something that is as easily understood as what Obermeyer Asset Management just wrote?

Thu, 03/29/2012 - 14:02 | Link to Comment q99x2
q99x2's picture

( . i . )  Me ipads.

Thu, 03/29/2012 - 14:14 | Link to Comment rosiescenario
rosiescenario's picture

There are a couple of items not discussed that could prove to be black swan events for AAPL: their Chinese supplier is forced to pay workers a living wage thereby halving Apple's margins; the FDA announces that iPads are the major cause of erectile disfunction; employment increases in the U.S. so demand for time wasting toys drops; there is a mega solar flare disrupting the internet for one month and frying solid state devices; Al Quaida decides that iPads could be the letter bomb for this century and begins introducing iBombs through bogus eBay sellers....all programmed to detonate simultaneously at some time in the future; the Feds put a new vice tax on iPads; or, an event no one could possibly have foreseen craters demand for Apple's products....perhaps they spread a dose of H5N1 worldwide?

Thu, 03/29/2012 - 15:00 | Link to Comment Whats that smell
Whats that smell's picture

I recall hearing in 1999 or 2000 that Palm had more value than Boeing.

Thu, 03/29/2012 - 15:13 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

yeah, that handheld address book was so bad ass

Thu, 03/29/2012 - 16:42 | Link to Comment chunkylover42
chunkylover42's picture

Looks like two guys in their 50s completely missed the run in AAPL and can't believe it.

Fri, 03/30/2012 - 04:49 | Link to Comment Bob Bercy
Bob Bercy's picture

Who are these jokers? There are 310m people in the US and 6.7billion in the rest of the world and he does his "analysis" on the base of the US. How charmingly and typically parochial. Get a passport dude...

Tue, 04/03/2012 - 09:37 | Link to Comment Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

$630

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