I would like to hear more of a reasoned explanation why DragonFly thinks what he does, and what position he will take to capitalize on his opinion.
First off, I am making a prediction. I'm not saying what should happen or what will happen, but what I expect will happen. I've been pretty right in the past. Secondly, I have no money either way on this prediction. It is a "paper trade" to test my perceptions of the market. If its wrong, I'll adjust my perceptions. The first prediction on Apple was when the stock was at $13 and I predicted it would double within the next couple of months. (It tripled)
The reason I see this happening are as follows:
1) There is still far too much ill will and under appreciation of Apple out there in the market. The people who like Apple (as a company) are not a major portion of its holders (as a stock.) So, Apple is percieved as having a small growth for a Tech company (10% a year) which is why its P/E is where it is.
2) Apple has done this before. Each WWDC or Macworld where people expect hot products sees a rise in the stock around it. Usually in the weeks before but sometimes in the following weeks. It seems to always be a short term effect and even when the products are great, the stock goes back down until the results from sales of those new products are in.
3) Earnings are what really set the value of a company and earnings growth set the price multiple. Apple is still in the stage of proving it can be profitable. It has not yet proven that it will grow very fast.
I will get into Apple when I see it starting to look like a "Rule Maker" (in motley fool terms, probably incorrectly used) -- which is the mode it, as a company, has to be. It will never be a successful commodity company, it has to be a Coke or a Sony rather than an Intel, Cisco or Microsoft.
I think Jobs realizes this, but the tide hasn't turned yet.
Does this help?
Dragonfly |
