AAPL & GOOG - any thoughts on the current share price in relation to their future growth prospects?
terminator - thanks for your take - since 1991 - you must have done alright with your investment...good for you!I don't think AAPL is wildly overpriced in light of its recent drop down to $150. It's supposed to earn $5 this year . . . maybe $6 next year (good luck guessing since they keep making money so fast these days). I've owned it since 1991 and I've thought it was ridiculously priced the last few years but they are just an amazing company and all of their products are creating a heck of wave. Right now the iPod and iPhone are leading to much greater sales of the Macs which is where they are really making more money right now. They just have so much potential right now. Not to mention they have zero debt and more than $10 billion in cash.
I don't know if I would buy it today, but I sure wouldn't bet against it.
terminator - thanks for your take - since 1991 - you must have done alright with your investment...good for you!
..I wouldn't have believed it either...things change and they don't always remain the same...amazing how one person can change the dynamic of a company...my apple got a nice 10% pop today...hope it holds and builds and I can get my 15 baggerIt's funny how things go. My basis is about $13 . . . and as recently as April of 2004 the stock was at . . . $13. So, for the first 13 years I had a 0% return. Then it exploded and now I show a 16% CAGR for the last 16 years. I remember thinking in the 90's (1997?) that they were in danger of going out of business because they were losing money and had about $1 billion in debt and no one wanted to buy a Mac.
I don't know the morale -- sometimes patience and ignoring your portfolio pays off? Or maybe, it pays to have enough winners to make you forget about your losers until they come back? Or maybe just that Buffet is right -- it's hard to gauge what's going to happen in tech companies because things are always changing so fast. If you had told me in 1999 that Apple would be making music players and telephones in a few years I don't think I would have believed it (and after the Newton I sure wouldn't have believed that they would be phenomenally successful at it).
It's funny how things go.
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I remember thinking in the 90's (1997?) that they were in danger of going out of business because they were losing money and had about $1 billion in debt and no one wanted to buy a Mac.
Yes, they had a billion in cash, but the balance sheet at fiscal year end, 9/26/97 showed $951 million in long-term debt. That was paid down (and off) over the next 4-5 years. At the time their current ratio was fine, I was just worried they would blow through the cash, have the debt and start needing to borrow more. A billion dollars is a lot when you aren't making any money.They actually had about a billion in CASH at the time, no debt.
It's odd, I started life as a Mac user and then ended up going to Windows because I was tired of the high prices on Macs and because there was so much less software available for them. But I was well aware of the faithful customers and their near-religious fanaticism for the products. Not me, I bought cheaper PCs and invested the difference.But they still had a bunch of loyal customers, and the market didn't value that fully, IMO. The iMac, while I don't think it was really a very good value, was at least 'good enough' to get the Apple faithful with pent-up demand for something new to open their wallets.
I think that gets back to the Buffett comment about judging tech companies. I don't think you can look twenty years out and have a clear idea about what computers and operating systems and gadgets will look like. But you can probably have a good idea that P&G/KMB/Clorox will still be making shampoo and soap and household cleaners, that Coca-Cola/Pepsi will be selling soft drinks, that people will be insuring against loss and that doctors will be using J&J's scalpels, bandages, joints, drugs, etc.There was a thread a while back about 'forever stocks'. I didn't read much of it - stories like this make me think the concept is a bit odd. Who knows what a company might do in the next 20 or 30 years? The nifty-fifty? Successful ones fall off the map, others rise from nowhere, or out of the ashes.
Yes, they had a billion in cash, but the balance sheet at fiscal year end, 9/26/97 showed $951 million in long-term debt.
I think only a small (but vocal) percentage were 'fanatics'. The reality is, once you put time in on one platform, there is some 'inertia' keeping you there. I think the vast majority of the 'loyalists' just preferred to stick with the Mac, partially out of 'inertia' - it wasn't a religious type thing at all for most. I think that idea is way over-blown.But I was well aware of the faithful customers and their near-religious fanaticism for the products.