What's Wrong With Apple (stock)?

[GGGG]

I don't think Apple has ever "invested in new technologies" or "buy out successful companies."  Apple's DNA is all about creating new products - Mac, iPod, iTunes, iPhone, iPad, etc.  Products that use technology to innovate.  The watch was a failure.  Where is that next product?

[Herman Cain]

My basis in AAPL is about $1 , my view is to keep holding it for the long term.  I bought as a value stock when it traded for cash and then I got lucky.

I think you can trade it from time to time as well.

I think the company will have some solid new products over the next 5-7 years.

[Tugg Speedman]

This I would agree with, but a company with that much capital is going to do big things again. 

If you got in 2010, you did 171%.   Along the way, the stock split, the dividends rolled and the value per share exploded.  Timing is everything.  Yes, it's taken a hit the last two weeks, I know I'm not bailing.  Tons of money, buying back stocks, increasing the dividend 10%, they will invest in new technologies and\or buy out successful companies if need be.

Apple's hope was China ...

http://www.cnbc.com/2016/04/29/why-apples-china-problem-is-likely-to-get-much-much-worse.html

Blame 26% decline in China's sales for lion's share of Apple's loss

Earlier this month, China shut down iTunes Movies and iBooks just six months after Apple introduced the services there. Billionaire investor Carl Icahn told CNBC on Thursday that he sold his Apple shares because "you worry a little bit — and maybe more than a little — about China's attitude."

Decline in iPhone sales leads to first revenue decline in 13 years for Apple
Much of the falloff is attributable to the stuggling Chinese economy, still the second-largest market in the world for Apple products behind the US

Wednesday 27 April 2016 02.28 EDT

https://www.theguardian.com/technology/2016/apr/26/apple-iphone-first-revenue-decline-13-years

A year ago Apple sold $58bn of gadgets – or nearly $650m a day – in the first three months of the year. Two-thirds of that revenue came from iPhones and sales were powered by the new iPhone 6.

Tuesday afternoon after the company reported a nearly 13% fall in quarterly sales, the first time revenue at the world’s most valuable publicly traded company has declined in 13 years.

iPhone sales in China – a crucial market for Apple to continue growing – have plunged 26% as its economy stalls, with some reports indicating the Apple brand is losing prestige there. In the US, customers are upgrading their phones more slowly as the differences between generations, like the iPhone 6 to 6s, become more incremental.

[Tugg Speedman]

I don't think Apple has ever "invested in new technologies" or "buy out successful companies."  Apple's DNA is all about creating new products - Mac, iPod, iTunes, iPhone, iPad, etc.  Products that use technology to innovate.  The watch was a failure. Where is that next product?

Initially many hoped something called "iTV" was coming and that would revolutionize the TV industry.  never happened and is not happening.  (Note this is not the same thing as the "me too" Apple TV which competes with Roku, Tivo, Sling, etc.)

Now the hope is "iCar" is coming ... they will wow the world with an electric car, probably self-driving.

If they do this, $250 stock.  If not, $75. 

[ChicosBailBonds]

I don't think Apple has ever "invested in new technologies" or "buy out successful companies."  Apple's DNA is all about creating new products - Mac, iPod, iTunes, iPhone, iPad, etc.  Products that use technology to innovate.  The watch was a failure.  Where is that next product?

With all due respect, they have probably acquired 50 to 100 companies over the years.  I worked with these guys extensively last two years while in the OTT space.

Whether it was Siri (which they bought), or Beats, or mapsense, or recently Flyby....the list is really long.  Next computing way back in the day.

At&t does the same thing as do many others.  Buy smaller firms tech, put it into your own and claim it as yours...cuz they can...they bought the tech.

[GGGG]

With all due respect, they have probably acquired 50 to 100 companies over the years.  I worked with these guys extensively last two years while in the OTT space.

OF COURSE YOU HAVE!!!!

[ChicosBailBonds]

Ancient history as that all stop in 2012.  They have done nothing since.  No new products (save the bust of the watch and music) and only wishful thinking that they have something coming.

Need to show Tim Cook the door.  He is the male version of Marissa Meyer (Yahoo CEO).

You might be right about Cook....some political baggage will come with that of course.  As far as Mayer goes, I've got a few friends at Yahoo and some that have left.  I think they were sunk regardless of who took over, but they will be bought soon. 

[ChicosBailBonds]

OF COURSE YOU HAVE!!!!

Yup.  Mostly on trying to get them off their ridiculous 30% Apple tax....bastards.   But we released a number of apps on the iOS platform and AppleTV, mostly working with their biz dev teams to do some deals around the Apple Store.  Last year or so around placement within their products, but that is an amazingly difficult thing to do without writing a massive check that isn't worth it in my opinion.

[ChicosBailBonds]

Initially many hoped something called "iTV" was coming and that would revolutionize the TV industry.  never happened and is not happening.  (Note this is not the same thing as the "me too" Apple TV which competes with Roku, Tivo, Sling, etc.)

Now the hope is "iCar" is coming ... they will wow the world with an electric car, probably self-driving.

If they do this, $250 stock.  If not, $75.

Told you guys what, 4 or 5 years ago that iTV was never going to happen.  The programming conglomerates (Disney, Viacom, 20th Century, CBS, etc) are a powerful bunch and they aren't just going to roll over.  Apple kept thinking they would, and of course they found out the hard way they wouldn't. 

[ChicosBailBonds]

Apple mergers and acquisitions.....yup, I was write.  Between 50 and 100.  Closer to 100.

78 thus far

https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Apple

It's what they do....then slap an Apple logo on it.  Don't get me wrong, they do a lot of R&D internally and have churned out great products.  End of the day, however, it is often cheaper to buy someone else's tech and that's typically what we do on the tech side.  It's what we did at DIRECTV.  It's what we did at Disney.  It's what others have done for many years.  Let someone else make the mistakes, see who survives, then buy them.

[MU82]

And what post would that be?

http://www.muscoop.com/index.php?topic=48239.0

Among numerous "Disney is doomed" posts within that thread, you said on Feb. 9:

Disney reported record earnings and profits largely because of the monster money made off Star Wars.  Disney profits topped $1 billion in Q4 2015 for the first time ever.  Disney profits blew away analyst forecasts.

So what is the stock doing?  It is getting crushed!  Down 6% or $5 and under $87 for the first time since late 2014.  It is down more than 25% since November 20th.  Why?  The death star pull of ESPN is so great that not even a billion dollar quarter can stop it from crushing Disney.


You also quoted your hedge fund boyfriend Kass saying this on Feb. 10:

I remain short Disney despite its recent fall to $89 a share, but I am down to tag ends.

Given that DIS has gone up 18% in the 10 weeks since, I hope Kass' minions, clients and butt-kissers have enjoyed that short.

[Tugg Speedman]

http://www.muscoop.com/index.php?topic=48239.0

Among numerous "Disney is doomed" posts within that thread, you said on Feb. 9:

Disney reported record earnings and profits largely because of the monster money made off Star Wars.  Disney profits topped $1 billion in Q4 2015 for the first time ever.  Disney profits blew away analyst forecasts.

So what is the stock doing?  It is getting crushed!  Down 6% or $5 and under $87 for the first time since late 2014.  It is down more than 25% since November 20th.  Why?  The death star pull of ESPN is so great that not even a billion dollar quarter can stop it from crushing Disney.


You also quoted your hedge fund boyfriend Kass saying this on Feb. 10:

I remain short Disney despite its recent fall to $89 a share, but I am down to tag ends.

Given that DIS has gone up 18% in the 10 weeks since, I hope Kass' minions, clients and butt-kissers have enjoyed that short.

You neglected all the posts from November when it was $120 that said the same thing.

http://www.muscoop.com/index.php?topic=48239.msg778507#msg778507

And from August when the stock was coming off $122 when this thread was started

http://www.muscoop.com/index.php?topic=48239.msg747514#msg747514

[MU82]

You neglected all the posts from November when it was $120 that said the same thing.

http://www.muscoop.com/index.php?topic=48239.msg778507#msg778507

And from August when the stock was coming off $122 when this thread was started

http://www.muscoop.com/index.php?topic=48239.msg747514#msg747514

OK. But did or did not your man Kass say it was a great short at $89? And by trumpeting that article, were you or were you not endorsing that view?

You also called it dead money - when it was in the $80s.

I sure wish I had a bunch of dead-money investments that gained 15-20% in 10 weeks' time!

Don't worry, Heisy, you don't have to say it. We all know you have trouble admitting you were wrong.

Anyway, this post wasn't about DIS, it's about AAPL. All I said was that if this AAPL call is as correct as the DIS call was when it was priced in the $80s, maybe this bearish AAPL call is a buy signal.

Of course, none of us really can know if AAPL will go up or down, either short-term or long-term. Just as none of us really knew that about DIS.

What some of us CAN do is pretend to know ... about this and pretty much everything else.

[Tugg Speedman]

OK. But did or did not your man Kass say it was a great short at $89? And by trumpeting that article, were you or were you not endorsing that view?

You also called it dead money - when it was in the $80s.

I sure wish I had a bunch of dead-money investments that gained 15-20% in 10 weeks' time!

Don't worry, Heisy, you don't have to say it. We all know you have trouble admitting you were wrong.

Anyway, this post wasn't about DIS, it's about AAPL. All I said was that if this AAPL call is as correct as the DIS call was when it was priced in the $80s, maybe this bearish AAPL call is a buy signal.

Of course, none of us really can know if AAPL will go up or down, either short-term or long-term. Just as none of us really knew that about DIS.

What some of us CAN do is pretend to know ... about this and pretty much everything else.

All investments are relative.  If one calls something dead money for years, that means a majority of other options will be better.  Not whether it will be above or below the price on that date.  The relative metric everyone uses is the S&P 500 and its that company's industry sector, for Disney that is consumer discretionary (con des).

On August 4 Disney announced huge subscriber losses at ESPN.  It annihilated it's stock (which was at $122).  To be clear, this is not an arbitrary date.  This is the date that Disney let it be known that ESPN is hemorrhaging subscribers, a significant event.  ESPN is 40% of Disney's revenues.

August 4, 2015 to February 9, 2016
(total return, including dividends)

Disney Stock  = -23.65%
S&P 500         = -10.48%
Con Des Index= -13.75%%

So relative to the S&P 500, Disney was crushed.  This includes the release of Star Wars, the highest grossing movie ever.  It did nothing to stop the bleeding ... Because Disney should change it's ticker symbol from DIS to ESPN so everyone understands what matters.

You are correct that I called it dead money for years on February 10, in addition to saying other bearish things about it for months before.  So what happened after that statement (using the day before close)

Feb 9, 2016 to April 29
(total return, including dividends)

Disney Stock   = +11.85%
S&P 500          = +12.03%
Con Des Index= +15.93%


So yes Disney rebounded since February 10.  But so has the overall market.  And yet Disney could not keep up with the overall market.  This is the very definition of dead money.  First it tears you a new one.  Then it cannot outperform the overall market on a rebound.

Next up for Disney, May 10 ... its release date for Q2 earnings.  Ignore all the stuff about movies and theme parks, how many people canceled ESPN is all that matters.

[Tugg Speedman]

Apple mergers and acquisitions.....yup, I was write.  Between 50 and 100.  Closer to 100.

78 thus far

https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Apple

It's what they do....then slap an Apple logo on it.  Don't get me wrong, they do a lot of R&D internally and have churned out great products.  End of the day, however, it is often cheaper to buy someone else's tech and that's typically what we do on the tech side.  It's what we did at DIRECTV.  It's what we did at Disney.  It's what others have done for many years.  Let someone else make the mistakes, see who survives, then buy them.

But the market is telling us that all this R&D is a waste of time and resources.  That is why is has been a terrible investment since the last Jobs influenced product was released (iPhone5).

Restated, Tim Cook and Jony Ive (Chief Design Officer) are not earning their pay because they have done nothing but create a failed music service, a failed watch and merely upgraded existing products.

[ChicosBailBonds]

But the market is telling us that all this R&D is a waste of time and resources.  That is why is has been a terrible investment since the last Jobs influenced product was released (iPhone5).

Restated, Tim Cook and Jony Ive (Chief Design Officer) are not earning their pay because they have done nothing but create a failed music service, a failed watch and merely upgraded existing products.

Again, your last sentence may be dead on correct.  What I'm saying, however, is that with the capital they are sitting on, they can make some very big noise and do fine, even if it means through an acquisition or some pivot.  Maybe a better way to say it, the lump of cash they are sitting on gives them a huge margin for error currently and in the future to buy their way out.

Smart phones are commoditized now to a large extent now.  The leaps and bounds they take are smaller and smaller, so they will have to come up with something new, no question about it.  But much like Disney, I'm not bailing on this stock anytime soon. 

[GGGG]

You can both be correct.  Chicos sounds like a long-term value holder, while Heisey approaches it like a short-term growth stock.

[MU82]

All investments are relative.  If one calls something dead money for years, that means a majority of other options will be better.  Not whether it will be above or below the price on that date.  The relative metric everyone uses is the S&P 500 and its that company's industry sector, for Disney that is consumer discretionary (con des).

On August 4 Disney announced huge subscriber losses at ESPN.  It annihilated it's stock (which was at $122).  To be clear, this is not an arbitrary date.  This is the date that Disney let it be known that ESPN is hemorrhaging subscribers, a significant event.  ESPN is 40% of Disney's revenues.

August 4, 2015 to February 9, 2016
(total return, including dividends)

Disney Stock  = -23.65%
S&P 500         = -10.48%
Con Des Index= -13.75%%

So relative to the S&P 500, Disney was crushed.  This includes the release of Star Wars, the highest grossing movie ever.  It did nothing to stop the bleeding ... Because Disney should change it's ticker symbol from DIS to ESPN so everyone understands what matters.

You are correct that I called it dead money for years on February 10, in addition to saying other bearish things about it for months before.  So what happened after that statement (using the day before close)

Feb 9, 2016 to April 29
(total return, including dividends)

Disney Stock   = +11.85%
S&P 500          = +12.03%
Con Des Index= +15.93%


So yes Disney rebounded since February 10.  But so has the overall market.  And yet Disney could not keep up with the overall market.  This is the very definition of dead money.  First it tears you a new one.  Then it cannot outperform the overall market on a rebound.

Next up for Disney, May 10 ... its release date for Q2 earnings.  Ignore all the stuff about movies and theme parks, how many people canceled ESPN is all that matters.

You're a peach.

BTW, I don't own DIS. All I know is that you made it sound like it was doomed when it was in the 80s and it's up 15-20% since then.

Now, it might be doomed long-term. We'll see. But none of us KNOW. Except you, of course.

[Chicos' Buzz Scandal Countdown]

I'll just leave this right here:

https://en.m.wikipedia.org/wiki/Efficient-market_hypothesis

[Tugg Speedman]

I'll just leave this right here:

https://en.m.wikipedia.org/wiki/Efficient-market_hypothesis

I think the weak form might work.  Not semi-strong or Strong.

[ChicosBailBonds]

Next up for Disney, May 10 ... its release date for Q2 earnings.  Ignore all the stuff about movies and theme parks, how many people canceled ESPN is all that matters.

Such short term thinking.

Hulu announced on Friday that ESPN will now be part of their services.  AT&T is launching OTT services later this year with ESPN a major part of it.  As I told you months ago, they will be picking up subscribers in other areas.

[MU82]

Such short term thinking.

Hulu announced on Friday that ESPN will now be part of their services.  AT&T is launching OTT services later this year with ESPN a major part of it.  As I told you months ago, they will be picking up subscribers in other areas.

I am extremely interested to see how the ESPN thing plays out with Hulu.

[ChicosBailBonds]

I am extremely interested to see how the ESPN thing plays out with Hulu.

It will likely be a skinny (industry term) that will require a$35 to $45 per month service with limited concurrent streams...which for you would be fine. Family of 3+, not so much.

We had some meetings with Hulu last week, they said they were working on some new things so this is likely it.

One thing I think Disney will demand are tighter piracy controls, but we shall see.

[MU82]

It will likely be a skinny (industry term) that will require a$35 to $45 per month service with limited concurrent streams...which for you would be fine. Family of 3+, not so much.

We had some meetings with Hulu last week, they said they were working on some new things so this is likely it.

One thing I think Disney will demand are tighter piracy controls, but we shall see.

Do you know what timing would be? My DirecTV 2 years are up on Aug. 31. I would love to at least be able to consider pulling the plug.

If I could watch ESPN, Show, HBO and a few other networks, the only thing I'd be missing would be FS1 - and I guess that would give me an excuse to meet my fellow Marquetters at bars more, which isn't necessarily a bad thing.

[Coleman]

Just catching up on this thread. I think its a little early to be calling the Apple Watch a bust. I don't own one, nor do I plan to, but I think it will become a decent niche product for them (in the same realm as the Apple TV). Look at adoption rates for the iPad and iPhone. Neither sold that many units in its first year, relative to their peak volume several years later. The Apple Watch will get there.