Author Topic: AAPL - Apple Inc.  (Read 1612219 times)

valueInv

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Re: AAPL - Apple Inc.
« Reply #610 on: November 09, 2012, 09:07:11 AM »
If you want to see an intelligent criticism of what Apple gets wrong, read this:

http://counternotions.com/2012/11/05/sirjony/


jeffmori7

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Re: AAPL - Apple Inc.
« Reply #611 on: November 09, 2012, 09:24:59 AM »
Good point Ross.

I was long Apple, but started to get uncomfortable at 700$, wanted to reduced my position, but unfortunately, I waited a bit too long and I finally didn't sell any. Anyway, I think the valuation is quite more reasonable today than two months ago (obviously..-20%!), even undervalued now. But at 700$, it was becoming a risky stock to get a 20%..I should have sold at least partially, my bad.

Anyway, I wanted to say to valueInv that is becoming very annoying your post about Apple and about other stocks. While I appreciate your insight on Apple and IT in general, you are now showing an irrational bias toward Apple..never fall in love with one stock. On the other hand, what annoyed me most I think is that you dismiss all negative comments that should help you confront your investment thesis about Apple, in the same time you are all over the board pointing any tiny little flaw about any other IT stock. What is true for other investments stay true for Apple, you can not try to demolish anything with arguments about insignificant details except for Apple where you argue against everyone with support from any little details like local newspaper story on one big lineup or stuff like that.

Anyway, it's nothing against you, but please, just keep some respect for the people you argue with, talk about facts, like you prefer, and stay away form personal attack! But don't be insulted by my comments, I just want you to keep posting here about everything, but in a way that we will all benefit from it and from your knowledge.

Ok..back to Apple, valueInv, what could lead you to think you should start to sell Apple instead of buying?

Let me ask you a question. Suppose I posted something the following on this board:

"Prem is losing it. Look at his investments in RIM, Dell, Sandridge. I mean is this guy even a value investor? He's making a lot of macro bets. Value investors don't make macro bets. And Buffet. He's going senile. He paid a crazy price for a capex intensive railroad. Buffet would have never made such a stupid investment in his younger days. His investment returns are going to go down. He can't keep getting lucky forever."

Do you think the criticism would be swift and merciless? Now you can see why I react the way I do.

Would people be biased to attack me? Or does it show how little I know about those companies? Does it show I am talking out of my ass about some very smart people of whom I understand very little?

I react when I see posts that are factually on analytically wrong. Its my pet peeve. I have over 150 blogs in my RSS feed, most of them tech. Do you think I have a good idea of whether the iPad mini got coverage? Or whether Apple is returning money to shareholders? Or Foxconn is lying about deploying a million robots? I live, breathe and eat the tech industry. I doesn't take much for me to tell when someone is talking out of their ___.

Go back an analyze the thread I post in. Count the % of my posts that have some datapoint or link substantiating the claim I am making. Now look at posts of the others. Do they bother to substantiate? Actually go even further, classify my links or data points as subjective or factual (as it relates to the claim I am making). What do you see? Who is likely to be more biased - someone who bothers to backup what they are saying or someone who makes unsubstantiated claims.

I am critical about Apple when they do screw up. When they released Maps, I was the one who called it a "crisis". Others said I was going too for. Well, Steve Jobs' heir apparent got fired over it. Crisis? I've criticized the iPod nano and Apple building its own chips. I was wrong about chips (which I admitted multiple times). I have called Redhat at the company with one of the widest moats in tech. I have also said that Windows Phone and Nokia are doing great work and I would like to see them succeed.

Look, I hold more in AIG, BAC, Berk, FFH, LUK than I do in Apple. I don't comment of those threads because there are people here that know far more than more on those and are way smarter about those stocks. I read what they post, learn and ask questions. I welcome posts that question my analysis, but do the research, educate yourself if you are going to talk crap about Apple, because I will challenge you. Saying Apple can't out innovate competition forever is like saying Buffet can't beat the market forever. It implies that both are getting lucky and shows a complete lack of understanding of how the companies operate.

I have previously posted about the risks/threats to Apple and am happy to do so again. Apple is not without both and yes, I control my sizing to account for the fact that I could be wrong. To answer your question about when will I sell Apple:

When I see a permanent impairment of the business. Like Buffet, my preferred holding period is forever, though its is not likely in the case of Apple. I have always invested in Apple by handicapping products using my industry knowledge. When I see them repeatedly release crappy products, I will sell.

Apple has always been a contrarian investment for me. Its funny when I was in business school, we were doing a valuation case study of Apple. I was in a team with some smart finance guys and they did a DCF to value it at about $65, it was trading around $80. They called it overvalued. Apple had just announced the iPhone but hadn't started selling it. They included 0 smartphone revenues. I asked them why. They said "Apple has no experience in making phones, they make mp3 players. They are not going to be able to compete against Motorola or Nokia". I argued that Apple was the best design/consumer electronics device company and the smartphone was a device. I lost the argument. We went with $65::)

 I have always bought Apple when the world crapped on it, when everyone was talking about how Apple was going to fail "this time". I go back, revisit my analysis and assumptions and buy if I disagree with the market. Now is one of those times. And I am happily adding.

Thanks for your answer! You see, maybe it's sometimes just the way you say something that can annoyed someone, more than what you say. So this time, you took the time to explain your view instead of a laconic answer like you often do. It's not a competition about who know the most!

About facts, I would just point that all facts are not meaningful, so we can not debate just by pointing facts, but we have to support them and use them as arguments.

I'm happy to be on board with you on BAC, AIG and BRK as well as Apple. We do not agree on everything and that's for the best, but we will leave religion behind and get back to investment!

hardincap

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Re: AAPL - Apple Inc.
« Reply #612 on: November 09, 2012, 09:28:41 AM »
Apple is a company that is extremely dependent on management, just like hedge funds or insurance. If Jony leaves, I would be selling my stock.

If you want to see an intelligent criticism of what Apple gets wrong, read this:

http://counternotions.com/2012/11/05/sirjony/

valueInv

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Re: AAPL - Apple Inc.
« Reply #613 on: November 09, 2012, 09:39:39 AM »
Now, in the IT business sometimes you can be smart/lucky and build switching costs or service/software platforms that outlive the device. But all devices end up as toasters. The balance between those two trends is tough to predict, changes happen fast, and end in bipolar outcomes.

Ain't it better to simply say that we don't know?
Many people make the same argument about the stock - the EMTs. They view the stocks are unpredictable and random. But we don't agree, do we? Ben Graham and Phil Fisher used analysis, research and observation to come up with a somewhat rigorous underlying mental model on how to approach investing and get superior returns. That does not mean that you can't go wrong following their principles, just that the probability is lower. We diversify to protect against that possibility.

What I am doing with Apple and the tech industry is no different. I have studied the best thinkers out there, I have studied its history, looked for patterns, dots I can connect and much more. I did this because I need this for my day job. It turns out that I can also use that knowledge for investing in tech. Thats exactly what I do. So it does not appear random to me. I was not surprised by polaroid, by RIMM and I am not likely to be surprised by Google or Apple when the time comes. I could be wrong but I diversify to protect against that.

If you want to learn about the tech industry read Clayton Christenson, Geoffrey Moore, Theodore Leavitt, William Davidow, Alan Cooper, Jef Raskin and many others. Educate yourself by reading the blogs of smart people in tech. Read everything on Apple and look for patterns. Why do they do the things they do? Why do people buy their products? How do people make buying decisions? What is a "good" product? What is each companies' core strategy?

Once you start to piece things together, it will look less unpredictable. You're absolutely right, it is better to say you don't know - if you actually don't. And that is my core problem with many of the posts I respond to - they don't really know or understand.

Palantir

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Re: AAPL - Apple Inc.
« Reply #614 on: November 09, 2012, 12:38:14 PM »
ValueInv - do you have any insight into how Apple will deal with a transition to VDI or do you believe that is not in the cards?
My Portfolio: AMZN, PYPL

gokou3

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Re: AAPL - Apple Inc.
« Reply #615 on: November 09, 2012, 01:29:55 PM »
I know people shouldn't swipe diagonally across their phone screen  ;), but a new problem surfaces for some iphone 5 users:


http://mobilesyrup.com/2012/11/09/iphone-5-owners-complaining-of-horizontal-line-problems/#comment-332254
iPhone 5 owners complaining of screen issues when swiping diagonally

VAL9000

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Re: AAPL - Apple Inc.
« Reply #616 on: November 09, 2012, 02:48:23 PM »
I have over 150 blogs in my RSS feed, most of them tech.

Well now you've answered the question of how you're able to constantly spam all of the tech threads on this board with positive news about Apple and negative news about their competitors.  Someone mentioned laconic earlier and I think it is a fitting description of at least half of your posts.  I have consistently urged you to provide more substance when you post.

Obviously you don't have to listen to me, but if you are looking to contribute, influence, or promote a healthy debate, then I will reiterate that your posts should be more verbose and contain more analysis and thinking.  Your approach of "paste a link, jot a pithy comment" is so low value. I did it once to make fun, but I don't think the message hit home.  If you think it is a challenge to do that, I will go you one for one on a thread dedicated to one liners (after I get back from vacation).

Before I sign off, I want to point out that the reason I spend time here is for analysis and insights.  It is very rare that I come across individual news articles that I haven't already read or wouldn't read shortly.  What interests me is the business analysis of any given piece of news. How does it impact the business model, probability of success, chances for fortune, etc?  Think of it as the comment section for blogs/news but filtered by investment related comments only.  This to me is the core advantage to working on a message board - collaboration, confrontation with a common goal.  I believe that because you offer so little analysis with each post, you appear significantly more biased than you may actually be.  But I can't tell because you don't show us otherwise.  All I see is that you love Apple and dismiss not Apple.  And that gets annoying and makes it difficult to take you seriously.  My personal opinion though. Maybe others disagree with me - but at least I stuck with my principles and offered analysis with that opinion :)

valueInv

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Re: AAPL - Apple Inc.
« Reply #617 on: November 09, 2012, 03:59:48 PM »
I have over 150 blogs in my RSS feed, most of them tech.

Well now you've answered the question of how you're able to constantly spam all of the tech threads on this board with positive news about Apple and negative news about their competitors.  Someone mentioned laconic earlier and I think it is a fitting description of at least half of your posts.  I have consistently urged you to provide more substance when you post.

Obviously you don't have to listen to me, but if you are looking to contribute, influence, or promote a healthy debate, then I will reiterate that your posts should be more verbose and contain more analysis and thinking.  Your approach of "paste a link, jot a pithy comment" is so low value. I did it once to make fun, but I don't think the message hit home.  If you think it is a challenge to do that, I will go you one for one on a thread dedicated to one liners (after I get back from vacation).

Before I sign off, I want to point out that the reason I spend time here is for analysis and insights.  It is very rare that I come across individual news articles that I haven't already read or wouldn't read shortly.  What interests me is the business analysis of any given piece of news. How does it impact the business model, probability of success, chances for fortune, etc?  Think of it as the comment section for blogs/news but filtered by investment related comments only.  This to me is the core advantage to working on a message board - collaboration, confrontation with a common goal.  I believe that because you offer so little analysis with each post, you appear significantly more biased than you may actually be.  But I can't tell because you don't show us otherwise.  All I see is that you love Apple and dismiss not Apple.  And that gets annoying and makes it difficult to take you seriously.  My personal opinion though. Maybe others disagree with me - but at least I stuck with my principles and offered analysis with that opinion :)

Analysis needs to start with facts or assumptions and use induction or deduction to reach a conclusion. It implies a level of rigor. If you are using assumptions, you need to state what they are and the likelihood that they will come true. If you use facts, point to them so that other people can verify your analysis.

I consider very little of what is posted by the usual suspects as "analysis". They are usually claims or assumptions being passed off as conclusions. I have deconstructed some posts previously to show this.

I post links to make what I say verifiable and to also keep my biases in check. I feel the burden of proof for every claim I make. I don't reach a conclusion in a vacuum, it is based on a piece of information - that is what I post. So if I say Foxconn is not revolting against Apple,
then I should have some basis of saying that - that is what I post. A good rule of thumb of thumb for a bias is when you can't substantiate what you are claiming. When you expose the information you base your decision on, you expose yourself to being proven wrong and that will decrease the likelihood of bias. Not the other way round. I have pushed for analysis on the Dell thread and you can see people being evasive.   

BTW, I have posted analysis of both Apple and Google. And as what the analysis predicted came true, I post the links to show it. A while back I called Motorola a mistake for Google. Check the Google thread for data points that verify that claim.

That is why I started using #facts, to point out that a particular claim does not rely on or agree with the facts. Go back and read this thread, read RIMM, read FTP. Did what the consensus say come true? If not, why not? Where did people go wrong?

valueInv

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Re: AAPL - Apple Inc.
« Reply #618 on: November 09, 2012, 04:00:30 PM »
Apple is a company that is extremely dependent on management, just like hedge funds or insurance. If Jony leaves, I would be selling my stock.

If you want to see an intelligent criticism of what Apple gets wrong, read this:

http://counternotions.com/2012/11/05/sirjony/

I would probably sell too.

ItsAValueTrap

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Re: AAPL - Apple Inc.
« Reply #619 on: November 09, 2012, 04:12:25 PM »
Here's how I see it:

You have to predict the future market share in smartphones and tablets, which is Apple's bread and butter now.  Tech often gravitates towards one or two companies dominating market share.  If Android dominates the market and takes away Apple's market share, then it would be really bad for Apple.  Because I am not confident that this will not happen, I am no longer long Apple (though I'd still rather be long Apple than short it... no question about that).

I see the software ecosystems being the moat of all the smartphone companies.  Whoever has the best software ecosystem will make the most money.  I don't think that the hardware vendors will make that much money and I don't think vertical integration matters.  Some of the SoC companies like Qualcomm, Intel, or TSMC may also make good profits.

I see Android as being the best software ecosystem a few years from now... I could definitely be wrong though!  It was only several years ago when Blackberry was the leader in smartphones.
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