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AppleSoft: Is It Different This Time?

Tyler Durden's picture




 

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...

 

Charts: Bloomberg

 

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Mon, 08/20/2012 - 13:51 | 2721055 ZippyBananaPants
ZippyBananaPants's picture

Oh Boy, let him speak freely and he puts his foot in his mouth big time.  

When you run for president your life should be an open book.  oopsie, uh, uh, on some things, uh, uh,

What an asshat!! 

 

Mon, 08/20/2012 - 13:55 | 2721065 alien-IQ
alien-IQ's picture

When there is a company that threatens AAPL as much as AAPL threatened MSFT, then (and only then) will this chart be applicable.

PS: and NO Reggie...GOOG ain't that company.

Mon, 08/20/2012 - 14:16 | 2721120 Dr. Engali
Dr. Engali's picture

Apple was not a threat to Microsoft at that point in time. And you might want to take a look at Android's climbing market share. If you want to dismiss that then you are ignoring reality.

Mon, 08/20/2012 - 14:22 | 2721164 alien-IQ
alien-IQ's picture

You can't seriously be claiming that AAPL did not take a big slice of the market share from MSFT can you?

Remember...AAPL was, first and foremost (and to anyone that is not a 16 year old girl), a computer company.

Mon, 08/20/2012 - 14:30 | 2721194 Spitzer
Spitzer's picture

Microsoft's growth stage ended, and the tech bubble burst. Had nothing to do with Apple.

Apples growth stage will end and it will go into utility mode like Sony, Toshiba et al

Mon, 08/20/2012 - 14:44 | 2721241 Vegamma
Vegamma's picture

While I enjoy poking fun at AAPL stock zealots, there is a meaingfull difference here. MSFT was trading at a huge P/E (around 40?) with 10UST at 6%. Investors had priced in huge earnings growth. AAPL's P/E is 16 with a sub 2% UST10.

Mon, 08/20/2012 - 16:19 | 2721535 Spitzer
Spitzer's picture

I'm not sure what a random bond market bubble has to do with it ...

Do you have the corresponding price of Florida condos for the said times too ???

Mon, 08/20/2012 - 17:10 | 2721717 Vegamma
Vegamma's picture

The bond market bubble means you can't earn 6% buying UST10s today. Need me to slow it down even more?

Mon, 08/20/2012 - 14:37 | 2721212 Dr. Engali
Dr. Engali's picture

In 1999 Apple was barely even a blip on the screen. You might want to revisit your history and time frames. It wasn't until after the tech crash and into 03 when apple started to gain serious attention. Before then they were always a company on the cusp.

Mon, 08/20/2012 - 14:39 | 2721221 mr1963
mr1963's picture

Global government antitrust lawsuits were a contributing factor in MSFT decline. Anyone still using "netscape?"

Mon, 08/20/2012 - 14:47 | 2721250 CommunityStandard
CommunityStandard's picture

Anyone still using Internet Explorer?  Nobody would have cared about their monopoly if their product was the best and most secure.

Mon, 08/20/2012 - 15:19 | 2721350 mpman001
mpman001's picture

Anyone still using "netscape?"

 

Yup...it's called Firefox (Mozilla) ;)

Mon, 08/20/2012 - 14:59 | 2721283 alien-IQ
alien-IQ's picture

They may not have been a blip on the screen in your world but where I was working in those years, entertainment and film production, they were far more than a blip. We saw what was coming and many many people I know bought stock in those early years...and yes...they are all quite quite happy with their choice.

Mon, 08/20/2012 - 14:59 | 2721285 I am a Man I am...
I am a Man I am Forty's picture

To everybody:

Unless you've owned a shit ton of Apple stock and have made a ton of money you might as well shut the fuck up.  Because all of you douche bags that weren't smart enought to own it all of these years are now smart enough to call its demise.  It's pathetic and if it wasn't so sad it would be hilarious.

Junk away idiots.  You've looked like fools for years now but carry on.

Mon, 08/20/2012 - 15:06 | 2721308 chistletoe
chistletoe's picture

yeah.  dumb me.  did not buy apple.  bought gold and oil instead.  how silly.

Mon, 08/20/2012 - 15:17 | 2721343 alien-IQ
alien-IQ's picture

Yeah...because AAPL stock hasn't risen at all in the last 15 years.

Mon, 08/20/2012 - 16:07 | 2721503 Dr. Engali
Dr. Engali's picture

Some of us made a ton of fiat on Apple and still believe it will meet the same fate as many of it's predeccesors.

Mon, 08/20/2012 - 16:32 | 2721573 resurger
resurger's picture

i didnt junk, i had enuff trolls with you over AAPL.

So when is AAPL going to top since you are an AAPL expert?

Mon, 08/20/2012 - 14:26 | 2721180 The trend is yo...
The trend is your friend's picture

I have taken away the ipads and iphone's from my kids...I just didnt like they way it was going.  They complained for a few weeks but now are reading actual physical books to keep themselves entertained as well as playing outside where they can get some actual excersize, not just excersizing their fingers and thumbs. 

Mon, 08/20/2012 - 14:38 | 2721215 FubarNation
FubarNation's picture

I have begun to unplug.  First started when my iphone 4 went for a swim.  Switched to an old motorol F3.  Brought much more peace into my life.  Laptop stays at work now as well.  Life is better.

It sneaks up on you but the more techology I added to my life the more the quality of my life went down the shitter.

 

This most likely won't be a massive trend for the masses but If so watch out APPL.

 

Mon, 08/20/2012 - 14:42 | 2721233 Dr. Richard Head
Dr. Richard Head's picture

AAPL has allowed for this poo throwing monkey to make music again.  Not good music, but music nonetheless.  My 3 year old is learning math and the alphabet on it.  Polus, I get to read ZH on my huge Samsun through AppleTV, as well as catch up on all of my YouTube subscription news. 

These products are tools.  Tools for learning and productivity or tools of entertainment and zombie making.  The choice is those who control the gadget.

Not that any of this will amtter to stock price, as we all know fundamentals are no longer reflecting reality anyway.

Mon, 08/20/2012 - 16:19 | 2721534 alien-IQ
alien-IQ's picture

A tool is only as good as it's user.

The problem isn't the i-phone or i-pad.

sorry.

Mon, 08/20/2012 - 14:12 | 2721141 vast-dom
vast-dom's picture

double trouble double bubble.

Mon, 08/20/2012 - 14:19 | 2721157 alien-IQ
alien-IQ's picture

That could very well be the most brutally butchered Shakespeare quote I've ever seen.

Mon, 08/20/2012 - 14:33 | 2721177 vast-dom
vast-dom's picture

wanton boys torture god flies in two-backed beasts of seem

 

Mon, 08/20/2012 - 19:47 | 2722117 Withdrawn Sanction
Withdrawn Sanction's picture

When there is a company that threatens AAPL...

That's one way for the chart to reverse.  Another is simply running out of growth space.  After all, how many iPads, iPhones, and other gadgets does a household need?  Saturation eventually sets in and w/o Steve Jobs around, Apple does not seem to innovate as well and stay as sharply focused (see the mid 90s for proof).

Does that mean I'd short it?  Nope...at least not until the momentum slows.

Mon, 08/20/2012 - 13:54 | 2721067 Dr. Engali
Dr. Engali's picture

Yes but Apple has a ton of cash, and they are cool ,and they had Steve Jobs...now they have what's his name......nevermind. At least Steve Jobs didn't hang around and become a Bill Gates.

Mon, 08/20/2012 - 14:28 | 2721186 bank guy in Brussels
bank guy in Brussels's picture

Plus so many hot chicks like Apple computers ... the 'babe' factor is still holding

Bill Gates is the son of a lawyer in the American political-legal mafia, Bogle Gates law firm ... as with so many American wealthy people, there are roots in the US political crook class that was a key part of his path to 'success'.

Apple's Steve Jobs started life as an abandoned child. The father of Steve Jobs is a Muslim from Syria, Abdulfattah Jandali, born in 1931 and still alive in America today. When Steve was born out of wedlock, the parents of Steve's German-American mother, Joanne Schieble, was not allowed by her parents to marry a Muslim, and Joanne was pushed to give up the baby Steve for adoption, to the couple Paul and Clara Jobs.

Some time after the adoption, Steve's biological parents did marry, and had another child, Steve Jobs' sister, the novelist Mona Simpson (née Jandali).

Though it seems they recently came to know of each other, it appears Steve Jobs and his father never met, Steve feeling abandoned, and Mr Jandali not going to the side of his dying son, or meeting his grandchildren fathered by Steve, because the father was afraid of looking like he was chasing Steve's money.

Article 'iSad in Damascus: Syria reclaims Jobs',
By Sami Moubayed in Asia Times Online yesterday:

http://atimes.com/atimes/Middle_East/MJ08Ak01.html

Mon, 08/20/2012 - 15:08 | 2721314 flattrader
flattrader's picture

Steve was the snake oil man.  Woz was the Wiz.

Jobs was nothing more than that...ever.

Mon, 08/20/2012 - 15:48 | 2721458 ToddGak
ToddGak's picture

Sorry, that's just flat ridiculous.  Before Jobs came back to Apple, I believe it was trading in the single digits.  It takes a lot more than snake oil to bring a company from the verge of bankruptcy to the largest market cap company in the world.

Sure, Woz may have been the technical wiz but he receded from the Apple scene a long, long time ago.

Mon, 08/20/2012 - 14:35 | 2721210 Tango in the Blight
Tango in the Blight's picture

Bill Gates didn't die.

Mon, 08/20/2012 - 14:38 | 2721216 Dr. Engali
Dr. Engali's picture

Yes but he hung around to be a money grubbing population reduction asshole.

Mon, 08/20/2012 - 15:12 | 2721323 Row Well Number 41
Row Well Number 41's picture

Population reduction is inevitable, you can try to do it early now or you can watch them starve.  Check out the chart, and consider what always happens at the end of a curve like this.

http://en.wikipedia.org/wiki/File:Population_curve.svg

#41

Mon, 08/20/2012 - 15:24 | 2721361 Dr. Engali
Dr. Engali's picture

I'm very familiar with that chart. However I prefer to let nature run its course instead of some rich arrogant pricks determining mankind's future.

Mon, 08/20/2012 - 15:47 | 2721450 Row Well Number 41
Row Well Number 41's picture

If we breed and act like rats we will die like rats. I personally would like to avoid the fate of dumb animals consuming everything in their path, while breeding until there is nothing left to eat except each other. Given a lack of real predators for humans this is our fate unless we act. I would like to avoid the worst of a Soylent world.

#41

Mon, 08/20/2012 - 15:52 | 2721471 Dr. Engali
Dr. Engali's picture

Nature always restores the balance on way or onther. There is a long history of mass extinctions over the course of time.

Mon, 08/20/2012 - 16:36 | 2721583 Row Well Number 41
Row Well Number 41's picture

I understand that Bill Gates is a money grubbing asshole trying to change his image before he dies. That said, the truth is short of guns and forced sterilization almost anything that reduces population growth, will be better then what is coming on the other side of that curve.

I don't like to see even stupid animals suffer unnecessarily.

#41

Mon, 08/20/2012 - 19:50 | 2722123 Withdrawn Sanction
Withdrawn Sanction's picture

Population reduction is inevitable,

Are you volunteering?

Mon, 08/20/2012 - 16:05 | 2721493 monad
monad's picture

His name is Tim Cook and he's been running Apple for years. What great things have you done, that you imagine you can insult Bill Gates and not be regarded an uptight, insecure, bitter loser, Dr. Suess?

Mon, 08/20/2012 - 17:02 | 2721654 Dr. Engali
Dr. Engali's picture

I guess if you define uptight bitter loser as a happily married father of three middle class man who holds personal integrity and human dignity in high regards you would be right. However if you think that I am envious of a person that made billions by stealing and marketing another person's product, and who now looks for ways to reduce population under the guise of "helping humanity" then you are sorely mistaken. That my arrogant friend is not great in my eyes. You may admire that and think it's great but I don't.

Mon, 08/20/2012 - 20:30 | 2722212 monad
monad's picture

I'm arrogant? You're ungrateful. Gates, Ballmer, Woz, Cook, and all the rest who contributed the entrepreneurial and technical genius that frees up your precious time, which you actually waste using their technology to insult them here, behind their backs. You said it yourself: you made loads of fiat off AAPL. Do you think Jobs really needed your 2 bucks? Do you think AAPLs grow on trees? Any success you gleaned off their work is predicated on their work and their success; you wouldn't have invested with the real cronies, and you know it. These very successful men that you insult specifically because they are successful, are the symbols of civilized people working and living together. Life isn't fair, and they aren't responsible for this inconvenience. Surely you aren't counting on the government to save you? Or Jesus? I respect these men, who have given me so much opportunity and charged me so little.

Bill Gates doesn't need to help anyone, but he does. If you think this is a pose you have to explain it. If you think he's doing it wrong, write to him. I'm sure he's open to self improvement. If you can do better, do it. Otherwise your derogatory remarks about him and other independents spending their own money, based on second hand rumors from his adversaries and even less credible sources, reflect only yourself, and what you present is self centered & somewhat negative.

Mon, 08/20/2012 - 22:49 | 2722479 Dr. Engali
Dr. Engali's picture

I don't insult them because they are successful. I applaud innovative entrepreneurs( which Bill Gates isn't. He's little more than a high tech thief ) and I am happy for the creative products that came from Apple. I never had anything bad to say about Steve Jobs or any of Apple's team.And if they make billions I'm glad they can do that too.That's the beauty of real capitalism. What I don't like is some arrogant prick pretending like they are trying to help mankind when their actions speak differently. Maybe you just overlook the fact that Bill Gates himself said we could lower the population by about 10 to 15 percent through vaccines, healthcare, and reproductive services. Or maybe you're okay with it since it seems you worship the ground upon which he walks. I for one do not. I don't wait for government and I don't wait for the likes of him to take care of me.

“The world today has 6.8 billion people”, said Gates, “that’s headed up to about 9 billion. Now if we do a really great job on new vaccines, health care, reproductive health services, we could lower that by perhaps 10 or 15 percent.”
~Bill Gates~ Davos 2010

Mon, 08/20/2012 - 23:57 | 2722599 monad
monad's picture

I suppose you think lowering the population by Global Thermonuclear War is a better solution? What do you think is going to happen when TSHF? He has children too. Maybe he wants them to have a better life.

If you had been following this you would know that BG has been studying poverty and overpopulation for over a decade. Other than the 3rd world is a tragedy, he found an inverse corelation between standard of living and birthrates: people who have living wage jobs & support their own children only have as many children as they can afford, whereas regions having high deathrates have equally high birth rates and the misery index is supernova. You could say, TV + couch = birth control + anesthesia. You could also say the motherfucking political church scams feed people who are on the edge of starvation if they don't use birth control, to increase the head count and make more hell on earth.

Do you really think introducing Planned Parenthood with standard of living incentives is a bad thing? Its sure better than what these children are facing now. Currently there are about 24 million SLAVES in the worlds. Thats right, 24 MILLION SLAVES. Plus child prostitutes, servants, laborers and whats for dinner, honey?

Bill Gates is a very decent man. I repeat: he doesn't have to do anything for anyone. Look how many who could, don't. Need is never a legitimate claim to demand the fruits of labor, to tax, which is to to enslave another person. Ever. I respect Bill Gates. When I think of arrogant pricks pretending they are trying to help mankind, I think of the Pope, City of London, Israel, Al Gore, Bushs, Clintons, Joe Biden and the legion of 'public servants' who have become incredibly wealthy while ruining my country and never having actually produced anything of value. When I think of Bill Gates, I think of all the business machines running Microsoft operating systems and all the desktops running Office, connected to the internet, which I regard as a target rich opportunity to make money and add value. I think of the abuse he and Microsoft sustained at the hands of the SEC and the rest of the parasites; you can viddy it all again on yt.

I strongly encourage you to check your sources. Mr. Bill has pissed off alot of powerful assholes and they are as good as Rupert Psyop Murdoch at spinning eyeballs and producing fiction for court. If you weren't there, you don't know what happened. Trust noone. DYOH

 

Mon, 08/20/2012 - 13:54 | 2721068 no taste
no taste's picture

Free Jon Corzine!  http://howstupidare.blogspot.com/

Mon, 08/20/2012 - 13:54 | 2721069 TheDarkKnight
TheDarkKnight's picture

Matterhorn!

Mon, 08/20/2012 - 13:55 | 2721070 malikai
malikai's picture

Blow-off top. Coming to a theatre near you!

Mon, 08/20/2012 - 13:59 | 2721085 Matt
Matt's picture

So, what this article is saying is, there is at least 20 percent more to the upside?

Mon, 08/20/2012 - 14:24 | 2721174 aint no fortuna...
aint no fortunate son's picture

But we have to remember that Bennie & the Algos hadn't taken over the markets in 2000 when softie was peaking, or that the world's central planners have now banned down days in the markets in perpetuity. THIS TIME IS DIFFERENT - we live in a new golden age!

Mon, 08/20/2012 - 15:15 | 2721338 flattrader
flattrader's picture

Greenspan was pumping money into the system ahead of a potential y2k meltdown the way a sailor on cinderalla liberty pumps a $200 hooker...(or whatever the going rate is...)

He was flooding the market with liquidity just in case.  I remember it well.

Look at the NAZ run up in the late, late part of the year...and it commenced crashing back to earth in January 2000.

That explains MSFT $120.

Mon, 08/20/2012 - 16:28 | 2721558 Dave
Dave's picture

Depending on the port of call, the going rate varies between $25 and $500. More or less...

Mon, 08/20/2012 - 13:57 | 2721078 slaughterer
slaughterer's picture

Tyler, we are thinking similar thoughts about AAPL. AAPL short will be the ultimate pain trade of 2012.  I am sure somef of the 250 HFs long AAPL are devising this trade behind their KoolAid smiles. 

Mon, 08/20/2012 - 14:24 | 2721173 Antifaschistische
Antifaschistische's picture

The HF's are engaged in a coordinated PONZI Scheme on AAPL.  As long as they collectively keep the marginal price in the ionosphere, then they all get to have a cigar at the end of each quarter.   Don't underestimate the length of time they're able to keep this levitation act going.  It will last for years, because it has to...and all the participants in the game can afford to chip in to keep the marginal price high.     

Mon, 08/20/2012 - 19:56 | 2722137 Withdrawn Sanction
Withdrawn Sanction's picture

Don't underestimate the length of time they're able to keep this levitation act going. It will last for years, because it has to

Game Theory much?  Ask yourself, how do you realize gains?  Then, who captures the most gains?

Mon, 08/20/2012 - 13:59 | 2721088 BlackSunshine
BlackSunshine's picture

Yup it is different, Apple is going to be the first Trillion dollar public company.

You heard me right.

When they get into the cable set top box arena (and thank goodness they will) Apple is as good as a monopoly at that point.

Cable companies can't make a piece of decent software to save a life, the software is arcane and an embarassment, and it shows that cable is run by people that don't know a thing about technology. When apple cracks that nut, they'll figure out how make serious cash with the cable companies.

Trillion dollars bitchez.

 

Mon, 08/20/2012 - 14:05 | 2721113 Meesohaawnee
Meesohaawnee's picture

wasnt CSCO going to do set top boxes back the day? and how that work out.. yup we have a contrarian indicator here folks.

Mon, 08/20/2012 - 14:24 | 2721138 scatterbrains
scatterbrains's picture

isn't a "set top box" a technology oxymoron ?  So let's see. Stick a box on top of a box, then plug all these different wires in the back of one and into the other.  Connect a few more cables and wires and then when you turn it on you should be able to get a signal in the second box.  Now you can relax and watch TeeVee... CNBC will never look better, trust us.

Mon, 08/20/2012 - 14:27 | 2721183 Antifaschistische
Antifaschistische's picture

SCATTERBRAINS!!

What an excellent point on "technology"!   I'm old enough to remember the old "technology".   It was wireless.  And when you brought home your new TV...you just plugged it in...and it worked...and you didn't have to hook up ANYTHING!!

 

Mon, 08/20/2012 - 15:13 | 2721329 scatterbrains
scatterbrains's picture

If you had any of those laying around in your attic (the old wireless one plug joints) I'd buy one from you if it's the kind that lets you block out bankster controlled spin/media.  Do you have one of those by chance ?

Mon, 08/20/2012 - 14:34 | 2721202 Cognitive Dissonance
Cognitive Dissonance's picture

There is a fifth dimension beyond that which is known to man. It is a dimension as vast as space and timeless as infinity.

It is the middle ground between light and shadow, between science and superstition, and it lies between the pit of man's fears and the summit of his knowledge.

This is the dimension of imagination.

It is an area which we call . . . the Twilight Apple Zone.

http://en.wikipedia.org/wiki/The_Twilight_Zone

Mon, 08/20/2012 - 14:17 | 2721151 adr
adr's picture

Remember CableCard that was going to remove the need for set top boxes altogether. Just plug it into the back of your TV or computer and enjoy.

The cable companies killed that idea off along with A La Carte pricing.

If you choose to use Apple TV as your set top box, you'll be paying extra. Just like using a XBOX 360 for Uverse TV. If you have a 360 you can use it as a reciever, but you have to pay $100 for a disc that enables it, and still pay a $10 per month reciever fee on top of that.

The only thing Apple can offer is a cloud storage DVR. Someting that is still way to impractical with our current internet speeds and bandwidth caps.

Mon, 08/20/2012 - 15:28 | 2721377 flattrader
flattrader's picture

>>>If you choose to use Apple TV as your set top box, you'll be paying extra. Just like using a XBOX 360 for Uverse TV. If you have a 360 you can use it as a reciever, but you have to pay $100 for a disc that enables it, and still pay a $10 per month reciever fee on top of that.<<<

Yes.  How Apple charges for this and how much will determine if it is yet another failure in this area.  If it blows out your broadband caps and limits people will shit can it.

People do not want to pay to view anymore because they can't afford to.

Mon, 08/20/2012 - 14:22 | 2721166 poor fella
poor fella's picture

RE: "Trillion dollars bitchez"

"AND 12 dollars per gallon gas!! WHOOHOOOOO!!" 

Mon, 08/20/2012 - 14:00 | 2721089 Zola
Zola's picture

I think they can thank Bernanke and Draghi the ultimate criminals for the run in their stock through the QE effects. There is no worse crime than destroying the future and these two men are guilty. 

Mon, 08/20/2012 - 14:01 | 2721094 Cult_of_Reason
Cult_of_Reason's picture

It certainly feels like 1999 all over again.

Mon, 08/20/2012 - 14:22 | 2721167 Mineshaft
Mineshaft's picture

This feels nothing like 1999. In 1999 there were few doubters and lots of widows and orphans buying into the craze. Today everyone is a doubter. If you think this feels the same you clearly were not trading back then

Mon, 08/20/2012 - 18:17 | 2721901 BlackSunshine
BlackSunshine's picture

I totally agree with Mineshaft, this is nothing like 1999. Everyone was in love with the stock market in 1999, the hairsylist, the cook, the bartender, all on TV telling the media that they bought this and that stock and expect to retire next year. It was insanity. I'm so glad I saw it up close, and lived through a bubble like that.

NFLX was trading at a 120 PE before it was "corrected". Apple is trading at a 20 PE. I think there is room to run to maybe 40 or so.

For those who think Apple is in a bubble, please learn how to read financial statements before your ignorance gets you in trouble. In 1999, there were companies, LOTS OF COMPANIES, trading at 100x PE, if they even had any 'earnings' in that PE equation. Apple makes money hand over fist, the corrections will happen when margins get squeezed, but the downside seems capped by the low PE.

Blah blah blah.......

Mon, 08/20/2012 - 18:17 | 2721902 BlackSunshine
BlackSunshine's picture

I totally agree with Mineshaft, this is nothing like 1999. Everyone was in love with the stock market in 1999, the hairsylist, the cook, the bartender, all on TV telling the media that they bought this and that stock and expect to retire next year. It was insanity. I'm so glad I saw it up close, and lived through a bubble like that.

NFLX was trading at a 120 PE before it was "corrected". Apple is trading at a 20 PE. I think there is room to run to maybe 40 or so.

For those who think Apple is in a bubble, please learn how to read financial statements before your ignorance gets you in trouble. In 1999, there were companies, LOTS OF COMPANIES, trading at 100x PE, if they even had any 'earnings' in that PE equation. Apple makes money hand over fist, the corrections will happen when margins get squeezed, but the downside seems capped by the low PE.

Blah blah blah.......

Mon, 08/20/2012 - 18:17 | 2721904 BlackSunshine
BlackSunshine's picture

I totally agree with Mineshaft, this is nothing like 1999. Everyone was in love with the stock market in 1999, the hairsylist, the cook, the bartender, all on TV telling the media that they bought this and that stock and expect to retire next year. It was insanity. I'm so glad I saw it up close, and lived through a bubble like that.

NFLX was trading at a 120 PE before it was "corrected". Apple is trading at a 20 PE. I think there is room to run to maybe 40 or so.

For those who think Apple is in a bubble, please learn how to read financial statements before your ignorance gets you in trouble. In 1999, there were companies, LOTS OF COMPANIES, trading at 100x PE, if they even had any 'earnings' in that PE equation. Apple makes money hand over fist, the corrections will happen when margins get squeezed, but the downside seems capped by the low PE.

Blah blah blah.......

Mon, 08/20/2012 - 14:01 | 2721095 slaughterer
slaughterer's picture

Has everybody seen the leaked photos of iPhone 5? The design is not enough to justify this run-up. Plus AppleTV makes AAPL merely a hipster NFLX.  Have funs with the studio licensing AAPL.  "It is your game to lose" 

Mon, 08/20/2012 - 14:19 | 2721153 Totentänzerlied
Totentänzerlied's picture

A free BJ, cold beer, and "I Voted" pin with every iPhone is not enough to justify this bullshit run-up.

Mon, 08/20/2012 - 14:23 | 2721168 adr
adr's picture

When Apple loses on design it is game over.

The legal fight with Samsung isn't smart either. Apple can't afford to lose Samsung as a supplier for parts. If I was running Samsung I would tell Tim Cook to go fuck himself, and stop all shipments to Apple. Let's see how well Apple can sell product that can't be made.

Apple thinks they stacked the deck because they own the US patent office. Kind of hard to win if the other guy holds all the chips and refuses to put down a bet.

Mon, 08/20/2012 - 18:02 | 2721877 AustriAnnie
AustriAnnie's picture

Yet, Apple could still lead in design, come out of legal/patent disputes unscathed, have a monopoly on suppliers, and STILL collapse as a company.

I hate that the argument over Apple's future seems to always revert to Apple's products.  Everyone can love and buy Apple products, everyone can continue to replace Apple products every year, to eternity.  But none of that justifies exponential increases in stock price.

Then you add those challenges mentioned above by adr, and it really starts to look ridiculous.

Mon, 08/20/2012 - 14:05 | 2721115 slaughterer
slaughterer's picture

Today's HF manager of the day is David Einhorn: congratulations on the CVH buyout.  Now wait for the knock on the door.  

Mon, 08/20/2012 - 14:06 | 2721119 centerline
centerline's picture

Makes Tim Knight's price prediction look about spot on.  A "hope" rally right up to the next device release - then a swan dive and fade.

Mon, 08/20/2012 - 14:07 | 2721121 diogeneslaertius
diogeneslaertius's picture

I am Santayana's ghost (in the machine)

Mon, 08/20/2012 - 14:06 | 2721122 adr
adr's picture

Following the chart still puts Apple at $300 a share after a major dropoff. $300 a share is still well within the bubble.

Putting a $700 billion value on a cell phone marketing company is insane. Remember Apple doesn't actually produce anything.

The biggest threat to Apple is Google. The Nexus line is one product away from taking a large bite out of Apple's share. $299 for a 10" Nexus tablet will have a lot of people thinking twice about a new iPad. The $199 7" Nexus tablet is selling like crazy.

Asus is really getting there in terms of design. Remember when everyone wrote off Hyundai and Kia. Then the new Sonata hit and kicked everyone ass. The next round of Asus supplied Nexus products could be world beaters.

If so Apple will be in trouble. $700 a share requires massive increases in market share. If market share drops, so wil the share price.

Mon, 08/20/2012 - 14:11 | 2721135 alien-IQ
alien-IQ's picture

"a cell phone marketing company"?

"Apple doesn't actually produce anything"?

WTF??????

You are joking right?

Mon, 08/20/2012 - 14:21 | 2721159 malikai
malikai's picture

Apple produces software, designs, and manufacturing and QA processes, not hard products.

Mon, 08/20/2012 - 14:31 | 2721198 adr
adr's picture

Apple's major revenue sources:

iPhone - manufactures by outside vendors

iPad - manufactured by outside vendors

iTunes - content supplied by artists and studios not owned by Apple.

Apple does program software, but it can only run on products made by sourcces other than Apple itself. Outside quicktime and iTunes, nothing that generates income is available for non-Apple products.

So yes Apple producing nothing itself. They are in fact a company that markets other corporation's products with their logo. It is more accurate to call it a Foxconn iPhone than an Apple iPhone.

Mon, 08/20/2012 - 14:51 | 2721261 alien-IQ
alien-IQ's picture

Yes...how dare they subcontract. Obvious proof of evil intent.

Why am I even bothering with a reply...I surrender.

Apple is the root of all evil. They must be killed. They caused 9/11. They caused the great depression. They sank the Titanic. They shot Kennedy. They bombed Pearl Harbor.

Happy now?

Mon, 08/20/2012 - 15:48 | 2721456 flattrader
flattrader's picture

I ain't gonna work on steve job's farm no more a long time ago.

I had the Sony device that was a precusor the the Apple ipod.  Worked just fine and I didn't need a bunch of fucking overpriced apple icrap to listen to music.

Those were the days.

 

Mon, 08/20/2012 - 14:06 | 2721123 Meesohaawnee
Meesohaawnee's picture

and yes. btw. get back to me when you AAPL lovers see how things work out if or when ben ever takes the punch bowl away. You have been the beneficiary of the most levitated propped market in the history of man. dont get too cocky crapple lovers.

Mon, 08/20/2012 - 14:08 | 2721129 Racer
Racer's picture

This time it's different

/sarc

Mon, 08/20/2012 - 14:14 | 2721132 NeedleDickTheBu...
NeedleDickTheBugFucker's picture

The potential of a long-term AAPL short is intriguing given the loss of Steve Jobs.  The departure of the "iconic CEO" has often lead to great short opportunities in the past

MSFT - Bill Gates

GE - Jack Welch

C - Sandy Weil

HON (Allied-Signal) - Larry Bossidy

These CEOs were wildly successful by pushing their respective companies to the limit and so there was nothing left in the proverbial cookie jar for their respective successors.

Mon, 08/20/2012 - 14:18 | 2721139 poor fella
poor fella's picture

Every time a new version comes out, Apple should just BRICK the older units and force people to buy the new overpriced barely-better iteration of iStuff.

People will do it since all their iCrap will be in the iCLOUD and held for ransom.

I am actually SUPER bullish on Apple. Since it doesn't matter that everything is made by foreigner slaves, and is now such a huge part of our economy, er, I mean 'The Market', I expect our government will go all in and update every new workstation and handset to iMacPhonePad. Corporations also will move to the iOS platform (after using their cash reserves to buy Apple calls) and it's going to be hard for Apple to keep up with demand.

*disclosure* Although bullish Apple, I wouldn't touch that piece of shit stock with money set aside for the jubiliee bonfire!

Mon, 08/20/2012 - 14:13 | 2721143 slaughterer
slaughterer's picture

Correct.  Have we seen much in terms of revolutionary innovation in AAPL since SJ is gone?  NOPE.  NOT AT ALL.  

Mon, 08/20/2012 - 14:25 | 2721175 Wakanda
Wakanda's picture

Steve spent his last months on the iPhone 5 that will be released in a few weeks.  After that, the magic may be gone...

Mon, 08/20/2012 - 14:29 | 2721189 alien-IQ
alien-IQ's picture

The guy has been dead for less than a year for fuck sake.

Mon, 08/20/2012 - 14:43 | 2721236 CvlDobd
CvlDobd's picture

I don't know man. iPhone update 5.1.1 was pretty badass.

Mon, 08/20/2012 - 14:14 | 2721149 Remington IV
Remington IV's picture

Yes .... No ... Yes

 

 

Mon, 08/20/2012 - 14:23 | 2721169 vbone
vbone's picture

nothing can stop aaple bros! its like that train in unstoppable!  we need denzel!

Mon, 08/20/2012 - 14:30 | 2721192 Hohum
Hohum's picture

Apple demonstrates that "investors" really don't want to invest in the needed technologies of tomorrow: nanotechnology, electric cars, nuclear fusion.  Apple products are neat toys.  Build a better toy if you want to make a lot of money.

Mon, 08/20/2012 - 15:21 | 2721354 alien-IQ
alien-IQ's picture

Yeah they should have bought AONE and FSLR instead.

(WTF???)

Mon, 08/20/2012 - 14:34 | 2721207 The Axe
The Axe's picture

No No  stop it Jim Cramer  says your disbelief is the right ingredient for more gains......come on guys...buy buy buy     sarc!

Mon, 08/20/2012 - 14:40 | 2721209 ar01
ar01's picture

I struggle to understand why ZH seems to hate AAPL with such vigor. It's a company that's actually producing profitable products -- compared to law firms, managing consulting firms, and banks, I don't understand the disproportionate amount of hate AAPL gets.

Is it a $700bn company? Probably not. Is it a good company? Absolutely. An inflated valuation isn't AAPL's fault.

Mon, 08/20/2012 - 14:44 | 2721240 alien-IQ
alien-IQ's picture

Agreed. It makes no sense at all.

Mon, 08/20/2012 - 15:16 | 2721341 geoffr
geoffr's picture

Give their cash and levels of profitability, I don't see the overvaluation.

I think for many it's cool to hate on Apple, just to be a contrarion or because a lot of people love the company.

Mon, 08/20/2012 - 14:39 | 2721220 buzzsaw99
buzzsaw99's picture

insiders are selling as fast as they can but not to me bitchez

Mon, 08/20/2012 - 14:42 | 2721226 alien-IQ
alien-IQ's picture

It really is astounding to see such an irrational degree of hatred directed at a company by so many here.

This is not a hedge fund that wiped out it's clients and "vaporized" everybody's money.

This is not a TBTF Bank that took billions in bailout money and provided it's top people undeserved bonuses. This is not a military contractor profiting on murder.

This is not some stock fraud scheme.

This hatred strikes me as wildly irrational and a dangerous sign of something much darker and deeper.

It's a fucking computer company with no debt from who's stock many many people have made a fortune.

Take a fuckin chill pill people. If you don't like the stock don't fucking trade it. If you like it, trade it. But get a fucking grip folks.

Mon, 08/20/2012 - 23:24 | 2722631 Bear
Bear's picture

Wow ... "a dangerous sign of something much darker and deeper". What would expressing the opinion that the price of a company's stock has gone too far, too fast make for a "dangerous" sign. The person that bought the last tulip in Holland thought that he would make money and was happy to buy it. Apple was $380 last Christmas and now is the largest company ever on the face of the earth. That doesn't cause you to think that $665 may be a tad too large. I remember when MSFT hit $120 ... everyone thought it would go up forever

Mon, 08/20/2012 - 14:42 | 2721232 Panafrican Funk...
Panafrican Funktron Robot's picture

It doesn't really matter what Apple does as a company.  It's stock is just a trading vehicle.  If you're still tying it to fundamental analysis, you obviously haven't comprehended most of the information on this site.

Mon, 08/20/2012 - 14:47 | 2721243 devo
devo's picture

Apple's forward earnings/PE is really low. It's actually a value at this price. I think they need to split the stock for people to see that. Earnings should be incredible through December if they time product launches correctly.

Now, I'm no Apple fanboy. Actually, I loathe their products (other than the Ipod), but this article is just skewed and should be called out. Comparing it to Microsoft is like comparing the 1980 gold price spike to the spike over the past few years. It is different this time because the fundamentals and backdrop are much different. Same with Apple...MS didn't have the same prospects and had anti-trust issues, etc. Apple is one of the safer stocks through December. At that point, reassess. If you don't call it like it is, people will stop reading the site. You're giving the Apple haters what they want, but it is not reality. Just saying.

Mon, 08/20/2012 - 15:12 | 2721325 geoffr
geoffr's picture

Agreed. It's the difference between being a cynical jerk and a skeptic.

It feels like they are only against Apple because it has done really well not because of something intrinsic to the company itself.

Now, if they want to argue the entire world is going to blow up, that's a different story.

Mon, 08/20/2012 - 15:30 | 2721346 devo
devo's picture

Apple does have some intrinsic problems (e.g. iterations of the same products, margins will shrink, competition heating up, etc). But those won't be a problem until next year and beyond. From now until Dec this is a great trade...the Iphone 5 has huge pent up demand, and earnings will explode. So why not buy it now and reassess in Dec?

Disclosure: Purchased at $330 last year, sold. Bit the bullet and purchased again at $610.

Also, there are companies with terrible fundamentals: Apollo Group, CMG, PCLN, LinkDN, etc. They deserve to the bashing much more than Apple (for all the complaints about govt debt, why not show some love for a company that actually carries the cleanest balance sheet in business? Seems hypocritical...hating on the stock because it's going up and hating on the company because they're successful). I get why, but it's inaccurate and putting readers on the wrong side of this trade (at least short-term).

signed,

devo (aka "it's okay to own apple and gold, and to trade paper gains for gold")

Mon, 08/20/2012 - 14:52 | 2721268 ATM
ATM's picture

The history of stock performance of the largest market cap companies is not very good.

Once you are the biggest company your stock performance starts to lag.

I will stay away.

Mon, 08/20/2012 - 14:54 | 2721275 Batman11
Batman11's picture

There is no real comaprison between Microsoft and Apple.

Microsoft's main products, Office and Windows, did everything they needed to do some time ago and gradually everyone realised  there was no need to keep upgrading anymore.

I still have a (circa. 1994) copy of Word on four floppy discs (less than 8 MBytes) that probably has 95% of the useful functionality of the current Word (no bouncing paper clip of course). This was in the days when only obscure tech. firms bothered with the internet using geek friendly browsers like Mosaic.

Considering Microsoft have had a good run with these products. Microsoft was always better at business than it was as a technical innovator. As far as i know all their products are copies of someone elses ideas and they just got very lucky when IBM got them to develop DOS for their PCs.

 

 

 

 

Tue, 08/21/2012 - 01:15 | 2722856 r3phl0x
r3phl0x's picture

The iPhone 4 does 95%+ of what an iPhone 5 will do. The iPad 2 does 95% of what an iPad 3 will do. Consumers are idiots but they're not idiots forever; sooner or later they will stop buying barely-improved iToys. Whether that takes 3 months or 3 years is anybody's guess. But when the fall-from-grace happens, it will be fast.

Mon, 08/20/2012 - 15:02 | 2721291 mirac
mirac's picture

Parabolic advances ususually end very badly...this one will be no different

Mon, 08/20/2012 - 15:06 | 2721306 Doublescythe
Doublescythe's picture

SOFTWARE BITCHEZ - THAT'S WHY APPLE WINS.

 

Mon, 08/20/2012 - 15:07 | 2721310 vertexa
vertexa's picture

From 2004-2007 the Dow kept hitting new highs, yet there was this brewing shit storm in the background (housing bubble). Now the Dow is approaching the same highs but the shit storm this time is the EU. It will burst and spill shit on all of us. The CNBC jargon is the same now as it was then. They report how good the markets are doing world wide and then say but wait EU is going to explode.

Mon, 08/20/2012 - 15:08 | 2721316 geoffr
geoffr's picture

There's a few differences.

Microsoft's stock price was participating in the .com bubble and it suffered from the collapse of that bubble. In other words, there's a general trend that affected Microsoft.

Microsoft, while still very profitable, stopped being a growth company. Steve Ballmer has wasted untold billions trying to expand into new markets. Some successful. Very little to give a good ROI.

Apple is very profitable. Even for a growth company. Their P/E is very low. It was incredibly low last December before the recent runup. If you back out their $110 billion or so in cash, I would consider them still underpriced.

This stock has made me good money so far. I'm going to keep buying. And when facts change what I think of the fundamentals, I'll sell and take my money with me and buy some gold with that.

Mon, 08/20/2012 - 18:26 | 2721923 houserich
houserich's picture

Noke. Microsoft was a late-commer to business models tied to the Internet and wasn't significantly affected by the burst of the bubble. Windows 98, Windows ME, Windows 2000 and Office sold extremely well during that time. ("too well" according to the government.)

Mon, 08/20/2012 - 15:08 | 2721317 ebworthen
ebworthen's picture

We'll need to call it the "Steve Jobs Top".

Mon, 08/20/2012 - 15:12 | 2721326 mirac
mirac's picture

or the Steve No Jobs Top...just that everyone is unemployed but own a smart phone   lol

Mon, 08/20/2012 - 15:19 | 2721349 magpie
magpie's picture

Like that classic 1990s joke about Germany having no "Jobs and Wonder".

Mon, 08/20/2012 - 16:40 | 2721579 falak pema
falak pema's picture

they named a brandy after NApoleon, will they name a cheese or a wine after Steve Jobs? 

I don't see him as a hamburger, a beer or a pretzel. Maybe a new cola.

Mon, 08/20/2012 - 17:25 | 2721767 machineh
machineh's picture

Maybe a new strain of kind bud -- 'Reality Distortion Field'

Mon, 08/20/2012 - 15:27 | 2721374 monopoly
monopoly's picture

It is interesting how one stock draws so many comments from us here. Does that portend a top? I don't think so. No matter how we love it or hate it, Apple is one of the most successful and profitable companies on the planet. At some point they will stumble, they all do, but that does not take away from what Apple has accomplished.

Like what MSFT did for us in the 90s, changed the world we live in...so has Apple.

 

Mon, 08/20/2012 - 15:36 | 2721400 Arnold Ziffel
Arnold Ziffel's picture

I'll see you guys later. I am heading out to buy another iPad, this time for my Dog ....he already has a Flat Screen & Roku but no iPad....how stupid of me!

 

He's still hoping someone comes out with a "SmartBone" to match the "Smartphone."

Mon, 08/20/2012 - 15:37 | 2721405 jmc8888
jmc8888's picture

People forget that 'office' software originally wasn't MS, it was Applesoft.

Everyone talking about Applesoft...Applesoft....Applesoft.  Hell at 5 I KNEW about Applesoft and how it was going to change the world in the early 80's.

Then came MS with some IBM developed things like DOS and Windows.  Of course later their 'Office' software became the standard.

Funny people think of Apple can't challenge MS in this space, when originally the opposite was said.

Glass-Steagall

Mon, 08/20/2012 - 18:21 | 2721916 UnpatrioticHoarder
UnpatrioticHoarder's picture

When I saw the ZH headline I thought it might be about AppleSoft Basic :(

Mon, 08/20/2012 - 15:36 | 2721407 debtor of last ...
debtor of last resort's picture

Fruit flys bitches.

Mon, 08/20/2012 - 16:55 | 2721669 oldschoolnewschool
oldschoolnewschool's picture

Haha I cannot believe that this comparison was done without taking account the drastic difference in earnings multiples between Microsfot then and Apple now...if Apple were valued as Microsoft was in 1999 its stock price would be over 2000$

Mon, 08/20/2012 - 18:19 | 2721898 TWSceptic
TWSceptic's picture

Comparing Microsoft at that time with Apple today, is like comparing a decaying orange with a delicious apple. It makes absolutely no fucking sense. Apple has a bright future for many years to come. When the stock market crashes again, I will buy the dip with my appreciated gold.

 

Regarding Android, more likely it will replace Microsoft as Apple's biggest competitor.

Mon, 08/20/2012 - 18:19 | 2721910 houserich
houserich's picture

The collapse of MSFT was because of Janet Reno and the DOJ. A bunch of the engineers that drove the profit center of the company had made their millions and simply quit. Regulation caused MSFT to become less innovative.

BTW, it's good time to short MSFT. Further decline is on the horizon.

Mon, 08/20/2012 - 18:57 | 2722005 YHC-FTSE
YHC-FTSE's picture

AAPL's share price and its revenues are concurrent proof that lies have their own momentum, stronger than fact or logic. Everyone knows that lying by repetition and association is beloved by the political classes and used almost effortlessly in the msm - corporations are no different. 

Apple's reputation of leading innovation, invention, and design have been complete fiction since it ripped off Xerox's GUI 30yrs ago, yet ask the average Apple customer, and they will tell you the exact opposite. Even Apple's biggest sellers, the i-somethings are poor copies of Sony's mobile phone and MS tablet pc, yet it is Apple who does most of the suing in the courts over their ripped-off generic designs. (see link)

The revenues generated by technology dunces who over-pay for their shiny new paperweights, in turn generate the market cap for AAPL, which in turn generate interest from the talking heads, and so on. If the art world is an example of the value created by desire and interest, you really can make money from selling shit. The value of anything in the world is proportional to human desire, and human desire is one of the most easily manipulated traits. 

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