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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: David Semoreson who wrote (15397)	7/14/1998 3:38:00 PM
From: soup	Read Replies (1) \| Respond to of 213182

Which Third Are You? A saying goes: "You can categorize investors by which third they want." In the 1st third (Deep Value) of a stock's upward move, it is drastically undervalued -- selling below liquidation value -- with no visible catalyst to turn things around. Things smell so bad, analysts recommend outright issue "sells" (about 1% of all.) [At parties, you don't even mention you own the stock because you don't want to embarrass yourself.] The Deep Value guys are in deep but kick themselves for being 9 months early -- during which period they continue to average down. In the 2nd Third (Fair Value), things are showing improvement. Management has cut costs and have begun to implement reforms, new product lines, etc. The numbers aren't there but for those that understand the product/service, they can project what the future will hold. [Your friends are skeptical, but you've always been the odd one out.] During this period Deep Value players are getting nervous and looking for other train wrecks. Momentum players think the stock's price movement is still too connected to its fundamentals for their tastes. In the 3rd Third (Momentum), the products are shipping, profitable quarters have been booked, analysts are happily pointing every which way but down. Brokers are phoning with confidence. [Your friends want to know if you've gotten yours yet.] Deep Value guys are long gone and Fair Value players have nervously cut their positions in half. Both groups will kick themselves as Momentum players log another 150% appreciation over the following 18 months. Which scenario best describes you? :1

To: David Semoreson who wrote (15397)	7/14/1998 3:54:00 PM
From: Marc Newman	Read Replies (1) \| Respond to of 213182

Reasonable post, David. If not for the iMac I'd think this was a fair price too. Instead, a $39 price would tempt me to sell everything (except one share, natch). I agree that it is likely that most of us trading AAPL right now are holding for just a few points upside from here. However, it seems to me highly likely that Apple will either come in at estimates or well above. It also seems to me that unless Apple misses the quarter badly (.23 or below) that the conference call is more important than the actual results. The difference between June and July is that the iMac buzz is getting louder and louder, IMHO. I feel that unbridled optimism on this thread is only equal to the negative influence of one minor news organization. (Take your choice from among many candidates.) You said it yourself, that the analysts will find any chink in the armor. If you are referring to optimism in the stock price, I see it the other way. Ie, that mutual funds are doing their homework and buying into AAPL in a big way. It's reassuring, to me. Anyway, if one wants to be very cynical, Apple has a history of stuffing the channel. There's no way they miss this quarter. With a big quarter (by all accounts) coming up, the company could make up for stuffing at the end of this one. So I see 10% chance they miss, 45% they come in at .30-.39, and 45% it is .40 or higher. The delay in the PBs gives the quarter some spice--if the 14.1" screen models had rolled out a month earlier there would be no drama whatsoever. My reasoning has been that the PBs shipped just enough that I don't have to worry about holding through earnings. But strong retail sales (Apple increased market share from last year by 10%) and possible strong education sales (production lines running overtime for the AIO's, etc.), plus the low cost structure of the "new" Apple, gives room to the upside. I'm also heartened by the report that Apple's sales were 26% higher in April than in April 1997, and 9% higher in the May period. FWIW, Marc