Apple Passes PetroChina to Become World's Second Largest Stock(bloomberg.com)
bloomberg.com
Apple Passes PetroChina to Become World's Second Largest Stock
http://www.bloomberg.com/news/2010-09-23/apple-passes-petrochina-to-become-world-s-second-largest-stock.html
3 comments
They "updated" it since I first posted. I agree with how terrible financial journalism can be, but sometimes it comes down to the writer having to pump something out and this is the only person to actually call back. It's unfortunate that that's OK with pubs and news orgs.
I don't think this is only unique to financial journalism but also common in mainstream journalism/blogging.
I'm not sure I get what the conflict of interest is... They got a quote from an analyst who works at a fund that is heavily invested in Apple stock. They properly cite that this person has a vested interest. Why is that bad journalism?
The quote was completely vapid, from some random analyst with an obvious c.o.i., and totally unnecessary for the story. Why include it at all? Maybe I'm just cynical, but I read the disclosure of her position as ad copy as much as minimally responsible journalism.
The whole story was pretty light reporting. You're right about that. I just didn't get why that one quote in particular struck you as being representative of bad journalism.
These stories come out all the time in the financial press: Apple hit some arbitrary milestone… lets try to get a one page story out of it. As long as they're disclosing interests, I'm ok with it.
These stories come out all the time in the financial press: Apple hit some arbitrary milestone… lets try to get a one page story out of it. As long as they're disclosing interests, I'm ok with it.
At the time I made the comment, the article was two paragraphs long, the first being the actual news about Apple and the second being what I quoted. It doesn't stick out from the most recent revision as much, I agree, but I still think it's a pretty bad story.
These stories come out all the time in the financial press
Which is a big reason I dislike the financial press so much. "Event + chatter from random analysts with vested interests" is a terrible template. It's lazy, boring, and uninformative, and to me counts as bad journalism even if it doesn't cross ethical lines.
These stories come out all the time in the financial press
Which is a big reason I dislike the financial press so much. "Event + chatter from random analysts with vested interests" is a terrible template. It's lazy, boring, and uninformative, and to me counts as bad journalism even if it doesn't cross ethical lines.
This is really a case where you can get all the information out the headline itself (and maybe a couple numbers).
How can a company that makes gadgets be passing in market cap companies that produce oil, which is a necessity for our modern way of life?
Sure, tech gadgets are great and super-useful when things are going well (and I have lots of them, and quite a few from Apple) but when all is said and done, oil powers our society. People need to drive to work no matter how bad the economy gets. I would assume that tech gadgets are the first to go from someone's wish list when the shit hits the fan.
So, even if a tech company has great revenue today, having the sort of P/E ratio Apple has means that it is expected to have that sort of revenue (and revenue growth) for the next couple of decades. While these sorts of P/E ratios maybe make sense for large industrial companies that stick around for half a century or more, do they make sense for tech companies?
1) Their products are usually in the nice-to-have or semi-luxury category, so they don't have as much staying power through downturns*
2) Tech companies are usually outpaced by newer arrivals, so expecting their run to last for decades is a bit optimistic.
* I will agree, however, that Apple has done well during the current downturn we are facing, but that's because it has produced some game-changing devices, like the iPhone, and how often can any company be able to produce game-changing devices?
Sure, tech gadgets are great and super-useful when things are going well (and I have lots of them, and quite a few from Apple) but when all is said and done, oil powers our society. People need to drive to work no matter how bad the economy gets. I would assume that tech gadgets are the first to go from someone's wish list when the shit hits the fan.
So, even if a tech company has great revenue today, having the sort of P/E ratio Apple has means that it is expected to have that sort of revenue (and revenue growth) for the next couple of decades. While these sorts of P/E ratios maybe make sense for large industrial companies that stick around for half a century or more, do they make sense for tech companies?
1) Their products are usually in the nice-to-have or semi-luxury category, so they don't have as much staying power through downturns*
2) Tech companies are usually outpaced by newer arrivals, so expecting their run to last for decades is a bit optimistic.
* I will agree, however, that Apple has done well during the current downturn we are facing, but that's because it has produced some game-changing devices, like the iPhone, and how often can any company be able to produce game-changing devices?
"How often can any company be able to produce game-changing devices?"
It seems Apple has a consistent track record for doing just that:
Intel / Bootcamp, Mac Mini, Newton, iLife, PowerBooks, The Macintosh GUI (okay, Xerox had it first), iMacs, OSX (Unix for the masses), iPod (Shuffle, Nano, iTouch, iPad, iPhone), iTunes store, Apple II, and so on....
You actually feel they have nothing left up their sleeve? With a record like that I don't think I'd bet against them.
It seems Apple has a consistent track record for doing just that:
Intel / Bootcamp, Mac Mini, Newton, iLife, PowerBooks, The Macintosh GUI (okay, Xerox had it first), iMacs, OSX (Unix for the masses), iPod (Shuffle, Nano, iTouch, iPad, iPhone), iTunes store, Apple II, and so on....
You actually feel they have nothing left up their sleeve? With a record like that I don't think I'd bet against them.
Stocks are (usually) bought based on future earnings potential. So for an oil company, whilst oil is needed, it is unlikely to suddenly make a huge profit over the other oil companies and instead will provide relatively safe long term returns.
So its price reflects this both good and bad stability.
On the other hand Apple has a track record of coming up with almost totally new markets which it can dominate and take the lions share of the profit, or find a niche to exploit in an existing market - ala iPhone. So it's price is speculating that they can keep finding these huge new profits in addition to the huge profits they already make.
tl;dr Apple is like a giant profit finding machine.
So its price reflects this both good and bad stability.
On the other hand Apple has a track record of coming up with almost totally new markets which it can dominate and take the lions share of the profit, or find a niche to exploit in an existing market - ala iPhone. So it's price is speculating that they can keep finding these huge new profits in addition to the huge profits they already make.
tl;dr Apple is like a giant profit finding machine.
Adding to the other answers: Please have a look at how much debt the companies have taken on.
Trefis thinks the stock is worth 361 [1][3], market price is 288 [2], the article says it reached 292, Trefis community average is at 410 [1].
There are 913.56M shares outstanding. Putting it's valuation at 263B. [2]
Which is around Microsoft+Adobe+Nokia or Intel+Google or IBM+HP
I´d short it if i knew how, i love mac, but this is just unsustainable.
Sources: [1] https://www.trefis.com/company?ovd_urlid=26389&hm=AAPL.t... [2] http://www.google.com/finance?q=NASDAQ:AAPL [3] All figures are US Dollars except when specified.
There are 913.56M shares outstanding. Putting it's valuation at 263B. [2]
Which is around Microsoft+Adobe+Nokia or Intel+Google or IBM+HP
I´d short it if i knew how, i love mac, but this is just unsustainable.
Sources: [1] https://www.trefis.com/company?ovd_urlid=26389&hm=AAPL.t... [2] http://www.google.com/finance?q=NASDAQ:AAPL [3] All figures are US Dollars except when specified.
Ask a broker, but be careful.
AAPL is among a lot of stocks that have a long way to fall before their prices can be called reasonable, but it's difficult to know when they will do it.
AAPL is among a lot of stocks that have a long way to fall before their prices can be called reasonable, but it's difficult to know when they will do it.
sharebuilder will let you buy put options, which are probably a better idea than a naked short for most people.
Personally, I agree that Apple is way overvalued... but it is tricky to time these things. It could go up a lot before it comes down. I remember a quote "The market can remain irrational for longer than you can remain solvent" - I don't remember who said it, but it's good advice.
Personally, I agree that Apple is way overvalued... but it is tricky to time these things. It could go up a lot before it comes down. I remember a quote "The market can remain irrational for longer than you can remain solvent" - I don't remember who said it, but it's good advice.
Keynes said it: http://en.wikiquote.org/wiki/John_Maynard_Keynes
The sentiment is quite similar to his other famous quote, "in the long run we're all dead".
The sentiment is quite similar to his other famous quote, "in the long run we're all dead".
Holy Conflict of Interest, Batman. This is the kind of crap that makes financial 'journalism' so awful.