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To: Swordmaker
The only legitimate question is can it sustain such earnings in the future.

If it can't, won't this be considered a "bubble" in retrospect?

57 posted on 03/06/2015 9:10:06 PM PST by tacticalogic
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To: tacticalogic; adorno; Star Traveler
If it can't, won't this be considered a "bubble" in retrospect?

No, because it was producing value in relation to its stock price. Read what i wrote. The estimated PE for Apple for 2014 is going to be only ~15. . . i.e. the stock will sell for only 15 times earnings. That is WAY under valued. That represents an anticipated 6.66% return on investment on a stock that has $188 BILLION dollars in liquid assets! That is totally insane! You can get pretty close to that return investing in some mutual funds that have no where near that kind of liquidity. . . much less a stock that is paying quarterly dividends and is simultaneously buying back stock! More insanity to price a GROWTH stock at such a ridiculously low price! Some analysts are holding that Apple is FOUR TIMES underpriced. . .

Apple generated $75 BILLION in revenue for a market cap of $750 BILLION. . . but that is just one quarter. Multiply that out by FOUR QUARTERS and Apple is generating $300 BILLION in revenue! By profit, assuming equal quarters, which won't be true, it would be $18 x 4 or $72 Billion. . . or pretty damn close to a PE of 10.5!

Even at the estimated 15, we are looking at an average $50 BILLION a quarter. $200 Billion a year in revenues. Show me another money machine producing any where near as well.

Any company that produces like that can never be called a bubble. It is valued correctly or way too below its actual value. You just want it to be a bobble because it is Apple.

These are just facts of Finance and Economics. As I said before, a bubble is a market or a stock that is vastly over priced for what it can legitimately produce in real value i.e. wealth. Apple IS producing way above its competition and similar businesses in its industry so it cannot be a bubble.

61 posted on 03/06/2015 9:33:14 PM PST by Swordmaker (This tag line is a Microsoft insult free zone... but if the insults to Mac users contnue...)
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