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Apple is disproportionately impacting indices and earnings data, skewing the picture of what is actually occurring.

WSJ:

“While most U.S. companies have struggled to meet earnings expectations, the Cupertino, Calif.-based maker of iPads and iPhones has surpassed even the most bullish of expectations, reporting $13.1 billion in profits during the fiscal 2012 first quarter that ended Dec. 31, more than double that of a year earlier. Revenue soared 73% to $46.3 billion. Those earnings account for about 6% of the S&P 500′s fourth-quarter earnings, according to S&P Indices, making Apple the biggest earnings contributor to the S&P 500.”

I have jokingly told people recently that there are 4 asset classes: Stocks, Bonds, Commodities & Apple. This article is more evidence supporting that . . .

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Source:
Apple’s Size Clouds Market
JONATHAN CHENG And BRENDAN INTINDOLA
WSJ, FEBRUARY 15, 2012
http://online.wsj.com/article/SB10001424052970204062704577223513581427728.html

Category: Investing, Quantitative, Valuation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

15 Responses to “The Big Apple (AAPL)”

  1. rd says:

    Shades of 2000, Batman!

  2. mysterious eggs says:

    Nothing goes forever. The fools were the skeptics, the fools will be the converts. How long it lasts, who knows? From a non-trading/non-investing perspective, let’s a hope a long time for the sake of hitech jobs and investment domestically. However, something needs to happen about overseas slave labour. Not just with Apple. All hardware firms are sucking at life in this respect.

  3. mysterious eggs says:

    Re: rd, Apple isn’t a shade of 2000. When the iPad came out, everyone asked me what’s the big deal, why does everyone need another laptop by a new name? I don’t own one because I have a desktop, a laptop, and a smartphone. They are business tools. It’s the new clipboard, presentation tool when you walk into a car dealership, *musical instrument* (no, I’m not kidding and we’re just getting started), and there are a hundred other uses we could name. They’re a capital good.

    Google is a step closer to 2000 but only if you’re trying to play devil’s advocate. Their search knowledge can be used within business intranets with value way beyond the consumer search which relies quite a bit on soft money, or fraud money however you want to put it. They need to be careful with SEO spamming and pressure to list large companies over smaller ones simply because of name recognition. An example would be a factless news story from a big network over a well researched blog article with citations.

    The shade of 2000 is Facebook though. Unless they have been storing all the metadata within user submitted files, then their data warehouse isn’t very valuable. Active users is a spurious statistic to measure their wealth. It might not seem valuable to you but if they collect all the EXIF data from every photo ever uploaded the entire Photography Industry is going to have an orgy. I’ve been suspecting they’ve been using that for revenue without making that knowledge public, but once they’re more exposed to scrutiny I’m almost sure that will come out. I’ve tried to figure out where that lies within their current terms of service but I’m not a lawyer and it all looks very grey to me. Probably intentionally.

  4. Livermore Shimervore says:

    When I hear of a fund with great annual returns I always think how much the manager is leaning on Apple. When you have a drastic and unrelenting consumer market shift in a condensed period of time, a move from under $100 to over $500 seems like a no-brainer for paid stock picker.

  5. VennData says:

    Foxconn’s Other Dirty Secret: The World’s Largest ‘Internship’ Program

    http://motherboard.vice.com/2012/2/15/foxconn-s-other-dirty-secret-the-world-s-largest-internship-program

    Apple! Apple! I love the FondleSlab! I love Steve Jobs! Please don’t spend all that cash on jobs here in the US, just keep it! LOVE!

  6. constantnormal says:

    What does it mean to have a one-stock stock market? As more money gravitates to AAPL, that’s what is essentially happening.

    Watching AAPL move compared to pretty much everything else I own, it is making a nice hedge, going up when the other stuff is going down, and vice versa … portfolio management by accident … whatever works …

  7. Petey Wheatstraw says:

    “Apple is disproportionately impacting indices and earnings data, skewing the picture of what is actually occurring.”

    For some reason, the above reminds me of Star Trek dialog (apologies in advance):

    Spock: Her gravitational field appears to be warping the time/space interface, Captain.

    Scotty: If this keeps up, she’s gonna’ blow!

    Bones: Jim! I know I’m just a simple country doctor, but I don’t think it’s really an apple!

  8. constantnormal says:

    @Petey Wheatstraw … Star Wars, not Star Trek …

    “That’s no Apple!” (disintegrator beams emerge from the “eye” of the new HQ building…)

  9. A says:

    It’s simply incredible that such a fast growing organization is a a toy manufacturer !!

  10. this..

    http://www.networkworld.com/news/2012/021412-ipad3-rumor-256184.html?source=NWWNLE_nlt_daily_pm_2012-02-15

    feels like ‘shade of 2000′..
    ~~

    and, if ‘Charts’, still, mean anything..

    http://finviz.com/quote.ashx?t=AAPL&ty=c&ta=1&p=d

    can We say ‘bearish engulfing’ ..?
    ~~

    http://finviz.com/screener.ashx?v=111&f=cap_mega

    AAPL = U$D ~464 bn ‘Market Cap’ ?

  11. sellstop says:

    At the very least the price action is AAPL was a good indicator of a change in sentiment in this market we’ve had for the last couple months. It may become apparent why the volume has been so low. The markets will probably by weak for awhile, at least. Further thoughts at:
    http://www.ghickeyblog.blogspot.com
    gh

  12. Bob A says:

    They have become and evil empire. No question they make quality products people like. But the endless lawsuits are inexcusable. Especially when many of their so-called patents and lawsuits, even if they’re “legal” are BS.

  13. V says:

    What would be a bubble price for this stock? $2000?

  14. [...] seems to be going on in the latest rally, and it’s due to one stock not the largest 10 or 20. Apple is dominating and overshadowing all the other stocks. Apple is doing so well that its earnings, profits margins, [...]

  15. Sechel says:

    And now you have Jonathan Weil who points out that Apple earnings have accelerated in part due to a lobbied for FASB rule that allows acceleration of earnings recognition(summarized from another source below).

    Many companies have been eagerly awaiting this rule change because they feel it more closely aligns their revenues with their costs. Apple, for example, has been at the forefront in pushing for these changes. Under the old rules, Apple had to recognize all iPhone revenue over a two-year period. These new revenue recognition changes now enable Apple to recognize the iPhone hardware revenue as soon as it is sold, while the revenue recognition for the software is based on an estimated value that is spread over the life of the iPhone. Apple early adopted in the first quarter of fiscal 2010 and the impact to their results was substantial. In fact, the adoption of the new accounting principles increased Apple’s net sales by $6.4 billion, $5.0 billion and $572 million for 2009, 2008 and 2007, respectively.

    http://www.netsuite.com/portal/resource/articles/eitf-08-01-best-practices-for-adoption.shtml