Posted on 03/04/2013 1:45:57 PM PST by blam
STOCKS HIT NEW BULL MARKET HIGHS AS APPLE PLUNGE CONTINUES: Here's What You Need To Know
Sam Ro
March 4, 2013
Stocks continue to march toward their all-time highs. And they're doing it without the help of Apple.
First the scoreboard:
Dow: 14,127, +38.1 pts, +0.2 percent
S&P 500: 1,525, +7.0 pts, +0.4 percent
NASDAQ: 3,182, +12.2 pts, +0.3 percent
And now the top stories:
* It was a quiet day in the markets and the economy. This is the first full week with the federal budget cuts known as sequestration ripple across the economy. Yet, the markets continued to grind higher.
* This rally comes amid some jitters in China where China's Shanghai composite tumbled and property stocks got crushed. The big news was that China announced new measures to contain a heated property market that many people worry has evolved into a bubble. Coincidentally, 60 Minutes ran a feature on Sunday night highlighting China's notorious ghost towns, which many consider to be hard evidence of a bubble.
* Meanwhile, shares of Apple, the most heavily weighted stock in the S&P 500, tanked. Notably, it fell below $425, which was the bearish price target of fund manager Jeff Gundlach. "AAPL over the last six months offers a textbook case study in market behavior and effectively debunks efficient market theories," said Gundlach in an email to Business Insider. "The weakness is all the more remarkable because it has occurred within the context of a strong overall US stock market. SPX up 5% since September 19, 2012 and AAPL down 40%."
* Once again, stocks are just points away from their all-time highs. The Dow closed at its all-time high of 14,164 on October 9, 2007, the same day the S&P closed at its all-time high of 1,565.
(Excerpt) Read more at businessinsider.com ...
What fundamental change has stocks moving higher?
Fundamentally speaking, the hype.
My theory is that the stock market is up because FED has been printing dollars and pouring them in the top of the economic engine. The only place the dollars can go is into the sump which is the stock market.
This is why printing money does nothing to stimulate the economy: fake dollars are just turning into fake stock valuations.
Fake dollars are also driving up food, fuel, and housing prices. Not just stocks.
In a word? Continued pessimism. The oldest, truest maxim of Wall St. is: "The market climbs a wall of worry". Which is why it took in February 2009 and never looked back.
Markets like the sequester. Taming down spending rate increase a bit is better than keep spending at steeply higher rates year after year on borrowed money.
Also Bernanke is pumping $85 Billion every month into the government treasury. (printing money).
The price don't match the performance for a lot of these stocks, starting to remind me of the dotcom thingy.
Truest and oldest maxims.
As GM goes, so does the economy.
As Apple goes, so does the economy.
And the next new normal, as the FED goes, so does the economy.
Cuts are now much more a part of the discussion in general.
Apple’s been overly priced for a long time. It should be back where it was in the mid-late 90’s in another year.
Goog will also crash, maybe not as hard, but it will.
Cash is a position...
When the foundational positions that are steady earners fall, people begin to chase cash. This and people feeling like the run is ending and wanting to get out causes rapid short runs up and down.
Winners need to be ridden, not chased. When the horse is bucking, find a calm one.
Another good indication of when the market is going to be intentionally tanked is a widening spread, even in the face of increased volume. Shows you the market is harvesting the volume by manipulation. When the power that be are manually steering the ship, be sure they are taking you to the rocks.
That I believe.
Money gotta go somewheres.
There is a lot of capital sitting on the sidelines with nowhere else to go.
This is why printing money does nothing to stimulate the economy: fake dollars are just turning into fake stock valuations.
That's pretty much the way I see it too.
Okay; I believe we have excessively printed money chasing something, in this case stocks.
Something had to inflate; whether groceries, gasoline, housing, bonds, stocks, or what have you. :-)
So what happens next? Accelerating “wealth effects” and inflation?
Because I don’t see the profit, production and productivity increases that would accompany a value-driven stock price surge.
what happens when everyone in the world
who wants an smartphone, ,,has one?
what does Apple do next?
remember, Apple’s gig is,
sell something for 600 bucks, that a
clone version of something similar,
sells for 45.
how long can they keep doing that?
I keep thinking the same thing.
And you’re close. I got a smart phone for 80 bucks and it does a lot of the same things an iphone does. I truly do not understand it.
What you people who do not use the Apple product fail to recognize is that the $45 product does NOT do what the Apple product does. You just think it does. We have owned the $45 products and also owned the Apple products and we KNOW what we are buying. There is a reason why iPhones and iPads dominate 80% of mobile web usage while the Android OS devices are outselling them three to one with BOGO promotions and spiffs to sales people that sometimes reward the sales guy beyonds the price the customer pays. The iPhone/iPads are USEFUL.Nor is your price analogy correct. It is far distorted from reality. With contract pricing, the costs are pretty close to equal. In fact, you can get an iPhone 4 under contract for free. . . the same price you can get many Android phones under contract for. . . but Apple doesn't spiff the sales people. To try and convince people to buy other than iPhone, Samsung's advertising budget to sell its smartphones was over $9 billion last year alone! Sales spiffs are included in that figure.
Currently, Apple is selling every iPhone and iPad they can manufacture. . . and are expanding into more markets. They can keep this up for quite some time. They have 80% of ALL the world's phone profits—not just smartphone profits—while having less than 10% of the world's market share. Apple and Samsung split 103% of the profits (yes, that figure is correct, because other phone makers are selling at a loss!). There is lots of room left for growth.
OH, and Rocky? Your dig that it is Apple that is selling the clones is noted. It is the other way around.
Market watchers are at a loss to explain the drop in Apple valuation. Its fundamentals are phenomenal... they have over $150 BILLION in cash and short term securities and NO DEBT! That is more than 97% of the market caps of all other publicly traded companies on the stock exchange! A P/E of 13 is unheard of in a company like Apple... and when you subtract the cash holdings it is a miraculous 8-9! This is a company that has created FOUR major product categories in 12 years. . . and holds the promise of more. Why, then is its stock tanking when Amazon with a p/e of over 3,000 and now because they posted a loss, not calculable?
The stock drops on the silliest of rumors... and "analysts" toss out rumors they KNOW to be false, and admit they trade for their own profit on those rumors, and are NOT prosecuted. This happened this week when one "analyst" published that Apple was going to do a 10 for 1 stock split when the analyst KNEW that Apple stock holders had to approve such a split. He sold on the rise, bought back in on the fall, after he admitted he knew it was false, and why, when he published it... and thousands of people lost a lot of money! Why has he not been arrested?
Apple reported 4th best quarter in business history, eclipsed only by its OWN record quarters, and did it on quarter being compared to a year ago's rare 14 long week quarter (which when adjusted for that, was absolutely phenomenal) and BEAT the year ago quarter, and because on just two metrics slightly below STREET targets, Apple stock took a beating.
WHY???? They missed what overheated analysts wanted, wild guesses that the analysts had pulled out of their collective asses. Nothing that Apple had claimed would happen. In fact, Apple had WARNED, because of the release of the new iPad Mini, that margins would be lower that quarter, but the analysts ignored that. . . they wanted to be blown away. They didn't get blown away and so they piled on with headlines about "Apple misses", and "Apple disappoints"... all on one of the BEST QUARTERS IN HISTORY!
What you people who do not use the Apple product fail to recognize is that the $45 product does NOT do what the Apple product does. You just think it does. We have owned the $45 products and also owned the Apple products and we KNOW what we are buying. There is a reason why iPhones and iPads dominate 80% of mobile web usage while the Android OS devices are outselling them three to one with BOGO promotions and spiffs to sales people that sometimes reward the sales guy beyonds the price the customer pays. The iPhone/iPads are USEFUL.Nor is your price analogy correct. It is far distorted from reality. With contract pricing, the costs are pretty close to equal. In fact, you can get an iPhone 4 under contract for free. . . the same price you can get many Android phones under contract for. . . but Apple doesn't spiff the sales people. To try and convince people to buy other than iPhone, Samsung's advertising budget to sell its smartphones was over $9 billion last year alone! Sales spiffs are included in that figure.
Currently, Apple is selling every iPhone and iPad they can manufacture. . . and are expanding into more markets. They can keep this up for quite some time. They have 80% of ALL the world's phone profits—not just smartphone profits—while having less than 10% of the world's market share. Apple and Samsung split 103% of the profits (yes, that figure is correct, because other phone makers are selling at a loss!). There is lots of room left for growth.
OH, and Rocky? Your dig that it is Apple that is selling the clones is noted. It is the other way around.
Market watchers are at a loss to explain the drop in Apple valuation. Its fundamentals are phenomenal... they have over $150 BILLION in cash and short term securities and NO DEBT! That is more than 97% of the market caps of all other publicly traded companies on the stock exchange! A P/E of 13 is unheard of in a company like Apple... and when you subtract the cash holdings it is a miraculous 8-9! This is a company that has created FOUR major product categories in 12 years. . . and holds the promise of more. Why, then is its stock tanking when Amazon with a p/e of over 3,000 and now because they posted a loss, not calculable?
The stock drops on the silliest of rumors... and "analysts" toss out rumors they KNOW to be false, and admit they trade for their own profit on those rumors, and are NOT prosecuted. This happened this week when one "analyst" published that Apple was going to do a 10 for 1 stock split when the analyst KNEW that Apple stock holders had to approve such a split. He sold on the rise, bought back in on the fall, after he admitted he knew it was false, and why, when he published it... and thousands of people lost a lot of money! Why has he not been arrested?
Apple reported 4th best quarter in business history, eclipsed only by its OWN record quarters, and did it on quarter being compared to a year ago's rare 14 long week quarter (which when adjusted for that, was absolutely phenomenal) and BEAT the year ago quarter, and because on just two metrics slightly below STREET targets, Apple stock took a beating.
WHY???? They missed what overheated analysts wanted, wild guesses that the analysts had pulled out of their collective asses. Nothing that Apple had claimed would happen. In fact, Apple had WARNED, because of the release of the new iPad Mini, that margins would be lower that quarter, but the analysts ignored that. . . they wanted to be blown away. They didn't get blown away and so they piled on with headlines about "Apple misses", and "Apple disappoints"... all on one of the BEST QUARTERS IN HISTORY!
What you people who do not use the Apple product fail to recognize is that the $45 product does NOT do what the Apple product does. You just think it does. We have owned the $45 products and also owned the Apple products and we KNOW what we are buying. There is a reason why iPhones and iPads dominate 80% of mobile web usage while the Android OS devices are outselling them three to one with BOGO promotions and spiffs to sales people that sometimes reward the sales guy beyonds the price the customer pays. The iPhone/iPads are USEFUL.Nor is your price analogy correct. It is far distorted from reality. With contract pricing, the costs are pretty close to equal. In fact, you can get an iPhone 4 under contract for free. . . the same price you can get many Android phones under contract for. . . but Apple doesn't spiff the sales people. To try and convince people to buy other than iPhone, Samsung's advertising budget to sell its smartphones was over $9 billion last year alone! Sales spiffs are included in that figure.
Currently, Apple is selling every iPhone and iPad they can manufacture. . . and are expanding into more markets. They can keep this up for quite some time. They have 80% of ALL the world's phone profits—not just smartphone profits—while having less than 10% of the world's market share. Apple and Samsung split 103% of the profits (yes, that figure is correct, because other phone makers are selling at a loss!). There is lots of room left for growth.
OH, and Rocky? Your dig that it is Apple that is selling the clones is noted. It is the other way around.
Market watchers are at a loss to explain the drop in Apple valuation. Its fundamentals are phenomenal... they have over $150 BILLION in cash and short term securities and NO DEBT! That is more than 97% of the market caps of all other publicly traded companies on the stock exchange! A P/E of 13 is unheard of in a company like Apple... and when you subtract the cash holdings it is a miraculous 8-9! This is a company that has created FOUR major product categories in 12 years. . . and holds the promise of more. Why, then is its stock tanking when Amazon with a p/e of over 3,000 and now because they posted a loss, not calculable?
The stock drops on the silliest of rumors... and "analysts" toss out rumors they KNOW to be false, and admit they trade for their own profit on those rumors, and are NOT prosecuted. This happened this week when one "analyst" published that Apple was going to do a 10 for 1 stock split when the analyst KNEW that Apple stock holders had to approve such a split. He sold on the rise, bought back in on the fall, after he admitted he knew it was false, and why, when he published it... and thousands of people lost a lot of money! Why has he not been arrested?
Apple reported 4th best quarter in business history, eclipsed only by its OWN record quarters, and did it on quarter being compared to a year ago's rare 14 long week quarter (which when adjusted for that, was absolutely phenomenal) and BEAT the year ago quarter, and because on just two metrics slightly below STREET targets, Apple stock took a beating.
WHY???? They missed what overheated analysts wanted, wild guesses that the analysts had pulled out of their collective asses. Nothing that Apple had claimed would happen. In fact, Apple had WARNED, because of the release of the new iPad Mini, that margins would be lower that quarter, but the analysts ignored that. . . they wanted to be blown away. They didn't get blown away and so they piled on with headlines about "Apple misses", and "Apple disappoints"... all on one of the BEST QUARTERS IN HISTORY!
A favorite radio ad ends: “Sure you could buy a hamburger for $1. But then you’d have to eat it.”
Everyone buying Apple products know they can get something with similar specs cheaper. But they know they’d have to use it.
I don't know much about the market, but I would guess there is some skittishness at the top end, that the bull could turn into a bear at any moment. Some say that doom is just around the corner.
Given it's position in the market, I can see people beginning to have reservations about Apple's run, even if it is only based in overall market nervousness. Add in that Jobs is gone and Tim Cook remains untested over the long haul and I can see people being concerned that Apple may be losing its innovative edge, Certainly for existing lines, incremental improvements are probably what we will see for some time to come. That is not to say that there won't be new things coming from Apple, but as always, they play it close to the vest.
Besides, for a company in their sector at their age and size their numbers remain ridiculously good.
The Fed pumping is distorting the market, and the smart money is moving out to a broader base, in advance of a decline. There's nowhere else to go if you believe gold is being manipulated by the likes of China and Soros.
Gresham's Law: The bad money drives out the good.
why do you have to post something 3 times?
.......................................
here is an article written in
Sept of 2012.
http://venturebeat.com/2012/09/15/hardware-is-dead/
.........................
the hardware is approaching giveaway status
you are paying for snob appeal.
Thanks Swordmaker.
” - - - Markets like the sequester. Taming down spending rate increase a bit is better than keep spending at steeply higher rates year after year on borrowed money. - - - “
Well said.
Fed has been pumping for what...going on 4 years+?
So where are the jobs?
8 million LESS jobs in the US than 4 years ago.
In interest rates are artificially kept at zero. The Fed keeps compressing the spring. One of these days it is going to blow inflation sky high. Yet that $85 BILLION Fed is pumping into the Treasury is doing zilch. It is better to pump that money to entrepreneurs, not the government who spends the money for non-productive items.
Jobs are stagnant, GDP growth is stagnant, manufacturing is stagnant, personal income is stagnant. The only thing Fed is stimulating is the stock market and manufacturing in China.
One of my friends has made a ton of money buying Apple puts. He started going short when the stock was near 600.
Yes, Apple makes good products, but iPhone does not make you any money, it does not drive you to work, it does not wash your laundry, it does not cook your food. When all is said and done it is just an electronic toy.
Thanks for the post. Nothing is rational in this market when honest assets are competing with fiat pumping.
Kass reverse course rather quickly. Twitter.....
2/26 12:48pm quoted “Gnome rumor”
2/26 1:19pm said “Apple trading near $449 from the days low at $437.36” “I sell off some of this outsized position AAPL”.
2/26 1:24pm “If you think one person can move Apple”
Thanks Swordmaker.
Swordmaker is right. Go one week with Android or Microsoft phone and you will understand. Currently, Apple has the best product bar none. The only phone with potential is the new Blackberry. So many are misinformed on the Z10 capabilities. I could be a game changer down the road. But who really knows since Beta was a better product than VHS.
I never disputed Apple makes very good products. One of my kids bought an Apple iPad. I threw in half the price for her. Then I bought a $130 similar size Tablet for the other kid. It is slower and resolution is a bit less. So what do my kids use it for? Mostly Facebook and Twitter browsing. The price difference does not justify the use from my POV.
“Swordmaker is right. Go one week with Android or Microsoft phone and you will understand. Currently, Apple has the best product bar none. The only phone with potential is the new Blackberry.”
Pardon me. I had use of the iPhone 5 for a week (I was house sitting for friends of mine and didn’t have a cell phone, nor did they have a home phone), and was thoroughly BORED. Mind you, I have an iPad and am used to iOS. The new iPhone just felt cheap to me and...tiny. It was fast, though, thanks to Verizon.
One of my customers (a lady) had the Samsung Note 2 on her desk and I asked “What is THAT?” It was the only phone that excited me, and I bought it. And am loving it.
And so are millions of others. Maybe YOU should get one! Ha!
Snobs can afford it, so why are you complaining?
Sure it is and Gays don't cause you any problems right?
What ever they pay you to post this drivel, it is too much.
I recently joined the tablet carriers, bought a Galaxy Tab 10.1 FAR below what the snob crowd is using. And every day I use it at work searching the web for an obscure part, wiring schematic or forum, I have it in Wi fi only but is tethered to my Galaxy S2 phone which does have the mobile Wi fi hotspot option.
I cannot even use a fraction of the tools on this tablet just like the smartphone, I am a semi-smart user.
Having an Apple product is unnecessary, cheaper is all that is needed, anything else more expensive will for the most part never ever be turned on, updated or shared by any social network. Like owning a new Lamborghini, can’t drive it commuting to work, cannot haul the travel trailer nor can it be a useful piece of work equipment, its just a snobs toy.
All this tech is practically giveaway, but some prefer to still keep a liberal view that they must be superior to someone. Eff them.
That was rude. I am telling the truth (been here since 2001, only three years less than you). Use whatever phone you like, no skin off my back!
I own an iPad because my Mom bought me one for my 50th birthday. I enjoy it, and prefer it to the Samsung tablets for sure. But the Note 2 makes the iPhone look like a joke to me. To. Me. That is a personal opinion, okay?
No... Again you FAIL TO UNDERSTAND. Snob appeal has NOTHING to do with it. I pay for USEFULNESS. That $45 tablet, that hardware, is useless because it doesn't have an ecosystem behind it that WORKS!!!! It is an unintuitive slab of junk that will wind up in the junk drawer next to the ZUNE and other also rans. There is a reason why iPads and iPhones account for over 85% of the mobile traffic on the Internet. . . It's because they are useful! Ergo, they get used.
Here's my opinion, it is different. It is a true communication device that neatly integrates all your personal communication needs with the cloud. It is also a very capable small computer with a smooth functioning interface and plenty of power to run any of the programs you throw at it. For me it blows the iPhone 4-5 away. Android is a close second, but it is too featured and overly complicated for its purpose. My biggest complaint would be how far WP8 is in application availability. However I have been able to find all of the application I need even if not all of the ones I want.
I wouldn’t mind trying one out. The Note 2 hooked me before I had the chance. Definitely lots of options for us these days.
“This is a company that has created FOUR major product categories in 12 years. . . and holds the promise of more.”
I’m interested in the rumor of an Apple watch. My sister gave me a Nike Fuel for Christmas and it’s cool, but strikes me as just the beginning of the “smart watch” era
Wasn’t it in 2011 that Google hit new lows? I remember a Fortune piece that questioned if it was “over” for Google. I’m sensing the same thing now with Apple.
Gays cause me a problem only when they get in my face.
If they do not bother me, I do not bother them.
My Hindu religion taught me to be tolerant of others.
That is why so many major religions were born in India.
Such as Buddhist, Jain, Sikh, Parsi etc.
There are millions of Christians and Muslims and Jews living in India. When you consider there are 160 million Muslims in India, there are very few intolerance related incidents.
That is the most cherished part of Hinduism. It teaches you that we are all children of God regardless of beliefs and not to hate or raise your sword except in defense. India has never sent armies to conquer foreign lands in it’s 5000 year known history. Amazing religion!
I agree,
The issue is, what’s next.
The FED, is not stupid. They are in a trap.
They are using the only tools available. Which is to fight DEFLATION by facilitating INFLATION. It really is just like Japan.
They could have stepped aside and let the market and free people figure it out, but because they CAN do something to alleviate the contraction, they DID and are DOING the only thing they can.
It’s a trap.
Look at Japan.
Japan is exactly where Fed is leading us to. Why can’t people learn from history? Why repeat mistakes?
Economic cycles have existed from day 1. Fed can’t suppress cycles. Nobody can. It goes against human psyche. People will keep acting based on the brains God put in their heads. They will spend too much when they can. Then it is followed by retrenchment.
The worst thing about what Fed is doing is that it is diluting value of US currency and increasing national debt. Both are bad in the long run.
But as you said, Fed is doing what it is doing because it can.
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