Apple's Shares Are Now More Expensive Than Google's
- Thread starter DodgerKing
- Start date
- Latest activity Latest activity:
- Replies 43
- Views 4K
[h=1]Price of Apple's Shares Surpasses that of Google's[/h]
Apple, iPhone and iPad News | ModMyi - Price of Apple's Shares Surpasses that of Google's
Now it is like the investing in gold. It is so high now is it worth investing even though it may still go up?
First of all splits are a fools game. They do nothing for the valuation of the stock. If the stock is high price and has low volume sales, it may get some help drawing in smaller investors with a lower price but it doesn't make the stock a better value. As one who has 15% of his net worth invested in Apple stock, I hope they don't split until the indicators say it's time. If that happens, it will be time to sell off my Apple stock and look for the next success story.
At 17 P/E Apple is one of the lowest cost stocks on the market and considering the cash in reserve, the P/E is below 10. But the only way to buy Apple is on one of it's many and frequent pull backs as fickle investors sell off over worries like whether Greece will default or whether oil goes up radically. My advice is to just buy it as you can afford to save the cash for it but only on pull backs. That's when I do and my last buy of 10 shares was on March 30 when it pulled back to $600. I'm hoping for a big pull back in July or August when it usually happens. If it doesn't, I'll just buy what I can afford as the stock continues to rise.
At 17 P/E Apple is one of the lowest cost stocks on the market and considering the cash in reserve, the P/E is below 10. But the only way to buy Apple is on one of it's many and frequent pull backs as fickle investors sell off over worries like whether Greece will default or whether oil goes up radically. My advice is to just buy it as you can afford to save the cash for it but only on pull backs. That's when I do and my last buy of 10 shares was on March 30 when it pulled back to $600. I'm hoping for a big pull back in July or August when it usually happens. If it doesn't, I'll just buy what I can afford as the stock continues to rise.
Been listening to some supposedly well educated "experts" talk about the Apple market cap and many are saying that the "Law of Large Numbers" will prevent the stock and company from growing.
Now I admit it's been a long time since I went to school and studied statistics, but when did the law of large numbers get changed to the way these experts are saying, that there is a maximum number in the number system? That a stock can't go beyond a maximum price. When I studied the concept of the law of large numbers it was relating to a statistical sampling that the larger the sample in a random selection the more accurate or representative the sample is of the whole. It had nothing to do with the way these so called experts are using the term: "Law of Large Numbers"
In addition, I guess these experts never heard of Berkshire Hathaway trading today at $119,000 per share and it grew 20% in the past year. I think Apple has a way to go.
This whole issue is hot topic today because Apple finally reached $600B Market cap. It is the second company, ever, to do that. Microsoft was the first.
Now I admit it's been a long time since I went to school and studied statistics, but when did the law of large numbers get changed to the way these experts are saying, that there is a maximum number in the number system? That a stock can't go beyond a maximum price. When I studied the concept of the law of large numbers it was relating to a statistical sampling that the larger the sample in a random selection the more accurate or representative the sample is of the whole. It had nothing to do with the way these so called experts are using the term: "Law of Large Numbers"
In addition, I guess these experts never heard of Berkshire Hathaway trading today at $119,000 per share and it grew 20% in the past year. I think Apple has a way to go.
This whole issue is hot topic today because Apple finally reached $600B Market cap. It is the second company, ever, to do that. Microsoft was the first.
Last edited:
Price per share really does not tell us much. market cap is a better figure to watch.
The use of P?es is also problematic. Apple is certainly undervalued compared to the S&P 500 but its P/E is actually quite high when compared to companies like Dell , HP and micro---if indeed there is any group to compare apple to.
As for the law of large numbers I think it is just a case of some analysts thinking the trend cannot go on forever and that a correction is overdue. having said that it may stay "overdue" for quite some time. In the end share price is decided by supply and demand and if investors are confident in Apple's future they may push the stock still higher for quite some time.
The use of P?es is also problematic. Apple is certainly undervalued compared to the S&P 500 but its P/E is actually quite high when compared to companies like Dell , HP and micro---if indeed there is any group to compare apple to.
As for the law of large numbers I think it is just a case of some analysts thinking the trend cannot go on forever and that a correction is overdue. having said that it may stay "overdue" for quite some time. In the end share price is decided by supply and demand and if investors are confident in Apple's future they may push the stock still higher for quite some time.
Right! I find it silly when some quote a law, like law of large numbers. What next? When the stock falls like a rock, these analysts will blame it on the Law of Gravity? 
Geronimo- I've been working with engineering all my life which is a rather precise science. But since I have started trading stocks and learning what makes it tick, much of the math is really based on crystal ball gazing for source data ( where a company is headed in the future) and then manipulating the data in a mathematical way to determine price per share. But if the crystal ball is not crystal clear... the input data can be quite flawed.
I 'm not sure how the share price is related to supply/demand since the supply is fixed by the shares outstanding, until the company issues more, or buys back which is how the supply/demand changes. In the mean time the share price is based on the bid / ask spread. Right?
Geronimo- I've been working with engineering all my life which is a rather precise science. But since I have started trading stocks and learning what makes it tick, much of the math is really based on crystal ball gazing for source data ( where a company is headed in the future) and then manipulating the data in a mathematical way to determine price per share. But if the crystal ball is not crystal clear... the input data can be quite flawed.
I 'm not sure how the share price is related to supply/demand since the supply is fixed by the shares outstanding, until the company issues more, or buys back which is how the supply/demand changes. In the mean time the share price is based on the bid / ask spread. Right?
Does P/E really mean anything to the investor if a company has never paid a dividend?
P/E has nothing to do with dividend.
P/E is a ratio of Stock price to earnings. High future P/E is an indicator that investors believe that a company will have better earnings into the future. But, it can be misleading. It can be a tool to level the playing field as to whether a stock is cheap or expensive. In this case a stock is cheap when the P/E is low as compared to a stock being expensive when the P/E is high. So, if a company earns a ton of money per share and the stock seems high price per share, it may have a lower P/E than a stock that doesn't earn much and sells for about the same price. In this case the company has a very high P/E. Many investors, like to use a different indicator which is P/P/growth rate which is an index called the PEG ratio. If a company has a PEG of less than 1.0 index, it is considered a safer investment than a company that has a higher index than 1.0.
As there are variations to this, here is a link to more explanation that is pretty simple.
P/E is a ratio of Stock price to earnings. High future P/E is an indicator that investors believe that a company will have better earnings into the future. But, it can be misleading. It can be a tool to level the playing field as to whether a stock is cheap or expensive. In this case a stock is cheap when the P/E is low as compared to a stock being expensive when the P/E is high. So, if a company earns a ton of money per share and the stock seems high price per share, it may have a lower P/E than a stock that doesn't earn much and sells for about the same price. In this case the company has a very high P/E. Many investors, like to use a different indicator which is P/P/growth rate which is an index called the PEG ratio. If a company has a PEG of less than 1.0 index, it is considered a safer investment than a company that has a higher index than 1.0.
As there are variations to this, here is a link to more explanation that is pretty simple.
Right! I find it silly when some quote a law, like law of large numbers. What next? When the stock falls like a rock, these analysts will blame it on the Law of Gravity?
I 'm not sure how the share price is related to supply/demand since the supply is fixed by the shares outstanding, until the company issues more, or buys back which is how the supply/demand changes. In the mean time the share price is based on the bid / ask spread. Right?
Supply and demand does not mean that more shares are created because of demand. In this case it simply drives up the price of the outstanding shares.
http://www.google.com/search?q=supp...s=org.mozilla:en-US:official&client=firefox-a
Last edited:
First of all they have already announced they will start paying a dividend. but really you should be concerned about the total return from a stock (or any investment) paying a dividend helps but appreciation of the stock itself helps as well.
I understand the perspective of how you see supply, Geronimo. That is, if an owner of shares of a stock is holding those shares they are not really available until the owner is enticed by a higher bid price where the owner makes those shares available. It's a more general way of looking at it. Thanks.
Some stocks make a habit of issuing frequent PO to cover high dividends. In a way, I see these as sort of a modified ponzi scheme. When the additionals shares are sold it reduces the price per share value and sometimes can reduce the dividend as well. I have one REIT that does this but I watch the combination of stock negative growth ( loss in principal invested) combined with the growth of the dividend paid that is reinvested. This combination will reduce the claimed % yield but as long as the net result is higher than other investments it pays. For example, I have one REIT that pays a monthly dividend of 17% but they keep issuing stock every qtr which reduces the price per share. Adding the losses in principal invested to the dividends gained less the income tax on dividends results in a net gain of 10%. This is how I evaluate the net yield of the investment. This scheme only works for an investment. If you need income it is not a good one to use. For income you need a solid company that exhibits steady price per share or even modest growth plus sufficient steady earnings that can pay a dividend year after year so you can spend the dividends as income and not lose your principal. Usually the utilities are best safe bets I have found for this game plan. Stocks like Apple, Intel, Microsoft are good too but suffer impact from product popularity and competition which can destroy your principal investment in the buy and hold mentality while you spend the dividend. I use Apple stock trading to grow my net worth. I am less enthused about it paying the dividend other than it opens the market to a new class of buyers which will ultimately increase demand and stock price.
A good reason why if you invest in stocks you have to watch them daily. Last year I took a beating on Netflix when the press ripped through the decision to raise rates on DVD mailings. Fact was that Netflix made that announcement 6 months early and nothing happened except a big increase in stock price. Then the press hyped the disaster in the summer and it was all over. The stock tanked, only to recover a little in the past 4 months.
Yesterday, Google was to announce earnings and while most felt the report would be very positive, and that maybe Google would issue a dividend, to follow Apple's lead, nobody expected them to pull a move like they did. As the news broke of increased earnings on ad revenue, with little care that the price per click was declining as that was made up by the increased number of clicks, the stock began to go up rapidly. This is typical during the earnings call report. I have held Google stock since March of 2009 and began to sell it off with each peak this past year to raise money to buy Apple. Then this news broke of doing a 2:1 stock split and paying a tax free dividend through the creation of a new class of stock with no voting power. WTF is that? I searched and searched and could find nothing on it and meanwhile the stock was continuing to go up. I put a quick sell order in because I got suspicious. When I don't understand my stock I don't want to own it. So I sold out at $657.25 last night. Took my money and ran! It's a good thing I did because today when investors had time to figure out what was happening the stock started to sell off. Today it lost $25 a share. While it's true that when the split happens the stock will be worth less than half and have no voting rights. It now seems to me to be a loser for investors. Time to move on.
Yesterday, Google was to announce earnings and while most felt the report would be very positive, and that maybe Google would issue a dividend, to follow Apple's lead, nobody expected them to pull a move like they did. As the news broke of increased earnings on ad revenue, with little care that the price per click was declining as that was made up by the increased number of clicks, the stock began to go up rapidly. This is typical during the earnings call report. I have held Google stock since March of 2009 and began to sell it off with each peak this past year to raise money to buy Apple. Then this news broke of doing a 2:1 stock split and paying a tax free dividend through the creation of a new class of stock with no voting power. WTF is that? I searched and searched and could find nothing on it and meanwhile the stock was continuing to go up. I put a quick sell order in because I got suspicious. When I don't understand my stock I don't want to own it. So I sold out at $657.25 last night. Took my money and ran! It's a good thing I did because today when investors had time to figure out what was happening the stock started to sell off. Today it lost $25 a share. While it's true that when the split happens the stock will be worth less than half and have no voting rights. It now seems to me to be a loser for investors. Time to move on.
You mean aside from the idea that some companies with big earnings reward the shareholders with big dividends.
I was wondering when the Apple stock was going to drop after rising and rising. Some analysts are saying that they can't maintain that kind of a rise for a whole lot longer, the phone companies may not want to subsidize as much money into the Apple phones and the steady rise in sales will not last as competitors will come out with products to compete and take away market share. It's just a matter of time unless Apple can stay a step ahead.
Similar threads
