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Old 05-17-2016, 06:52 PM   #101
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When Buffett buys tech, Hell has frozen over.
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Old 05-17-2016, 07:57 PM   #102
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Oh boy! Buffet buying tech. What has he done?

It's "Fire and brimstone coming down from the skies! Rivers and seas boiling! Human sacrifice! Dogs and cats living together! Mass hysteria! Forty years of darkness! Earthquakes, volcanoes!"

We are toastally doomed.
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Old 05-17-2016, 09:19 PM   #103
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When Buffett buys tech, Hell has frozen over.
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Oh boy! Buffet buying tech. What has he done?

It's "Fire and brimstone coming down from the skies! Rivers and seas boiling! Human sacrifice! Dogs and cats living together! Mass hysteria! Forty years of darkness! Earthquakes, volcanoes!"

We are toastally doomed.

From an article I read, it was NOT him...

They said there are a few people in the org who have $10 billion to invest and they said it was one of them....
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Old 05-18-2016, 06:21 AM   #104
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People talk about Apple "no longer being a growth stock" - but they were never priced like one. The P/E has always been absurdly low, even when the growth rate was incredible.
Correct, but they certainly behaved like a growth stock in the early- mid-2000s. Now, they're definitely a worthy value stock if you're not afraid of the tech sector. It still remains the only individual stock we own.

Obviously, this wasn't a Buffett move himself. He's actually said he would "never buy Apple". Buffett himself only bought tech a few years ago when he bought IBM, which is down 20% since his purchase according to what I read. (Makes me want to look into them!).
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Old 05-18-2016, 09:01 AM   #105
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They have become the Coca Cola of electronics. They are unique in the marketplace and it is not because of unique technology.
Agree.
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Buffett himself only bought tech a few years ago when he bought IBM, which is down 20% since his purchase according to what I read. (Makes me want to look into them!).
Right. When the stock has a PE under 10, a reasonable dividend and a healthy buyback target, what is not to like!
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Old 05-18-2016, 11:14 AM   #106
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Hmmm.... I have owned tech stocks, lots of them. But never Apple. Maybe I should get some now, as a dividend-paying stock and not a growth one.


PS. Done. Well, not quite but I have a put ask out, in effect offering to buy Apple at $91.60 (it is currently at $94.55). Expiry in June. Will see if there's any taker.
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Old 05-18-2016, 12:57 PM   #107
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Why not buy a call ?

Was selling a put cheaper ?
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Old 05-18-2016, 01:01 PM   #108
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I bought LEAPs on other stocks some years ago, but they did not work out for me.

As for selling puts now, it is because I suspect the market may drop some more, hence my pessimistic stance.
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Old 05-18-2016, 01:08 PM   #109
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I did sell some puts on the xlk a few days ago. It has Apple. Why xlk? I was trading out of my mutual fund and into ETF. This ETF seems to fit the price range for that account.
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Old 05-18-2016, 01:24 PM   #110
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Uh Oh! Someone just bit my AAPL put. I may end up owning this stock and have to hold it a while, same as the Gilead put that was assigned last month.
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Old 05-18-2016, 01:35 PM   #111
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Uh Oh! Someone just bit my AAPL put. I may end up owning this stock and have to hold it a while, same as the Gilead put that was assigned last month.
Congrats! You are now on track to become the next protege for Warren Buffet. At least you are 15 dollar cheaper.
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What about Apple now?
Old 05-18-2016, 01:38 PM   #112
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What about Apple now?

Keep us posted.

In a downside market it Seems selling a put gives you a lot more unknown downside risk versus buying a call because u may get stuck with buying the underlying security at a price higher than where the market eventually stabilizes ..
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Old 05-18-2016, 01:42 PM   #113
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Keep us posted.

In a downside market it Seems selling a put gives you a lot more unknown downside risk versus buying a call because u may get stuck with buying the underlying security at a price higher than where the market eventually stabilizes ..
I think of it as part of my permanent portfolio at a discount. I don't buy individual stock any more.
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Old 05-18-2016, 02:40 PM   #114
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Keep us posted.

In a downside market it Seems selling a put gives you a lot more unknown downside risk versus buying a call because u may get stuck with buying the underlying security at a price higher than where the market eventually stabilizes ..
That was my thinking, but it did not work out for me on other stocks. Let's take AAPL at $94.xx as of this writing.

A LEAP call expiry Jan 2018 costs you $12.70 for strike price of $95, or $7.20 for $110. Which one would you prefer?

I could buy the $95 strike, and AAPL languished below $95 for the next 2 years, I would lose the $12.70. If I bought the stock outright, I would at least get some dividends.

Or I was more bullish on Apple, and bought the $110 strike price. AAPL moves up, but barely at $110. I would lose my $7.20, while a straight purchase of the stock would give me a return of 110/94 = 17% in 1-1/2 years plus the dividends.

In the past I bought LEAP 2 years out on some stock, thinking the stock should move up enough in that amount of time to give me some profits. It barely got up there by expiry. My option became worthless. It continued to move up, but I was already out.

Man, it's not that easy.
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Old 05-18-2016, 02:45 PM   #115
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People talk about Apple "no longer being a growth stock" - but they were never priced like one. The P/E has always been absurdly low, even when the growth rate was incredible.
Emphasis on was.
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What about Apple now?
Old 05-18-2016, 02:51 PM   #116
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What about Apple now?

@Fedup.

Question : if the put gets triggered you're stuck buying the shares from someone who you sold the put to......

Since u don't hold individual stocks, Do you then just buy from the put holder and immediately sell the securities to someone else on the open market ?
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Old 05-18-2016, 03:24 PM   #117
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@Fedup.

Question : if the put gets triggered you're stuck buying the shares from someone who you sold the put to......

Since u don't hold individual stocks, Do you then just buy from the put holder and immediately sell the securities to someone else on the open market ?
I think I will end up buying ETFs. I will then sell call on my ETFs.
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Old 05-21-2016, 11:48 AM   #118
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There is risk of a shift in consumer sentiment, but at this price it would have to be dramatic to make Apple a bad buy. They are close to a single digit PE and have more cash than any other company in the world.

As long as sales don't fall off a cliff, this stock makes sense to me.
It's a very real and large risk, and when it strikes it comes fast.

Nokia was cash-rich and quite profitable in 2007, with a return on invested capital above 30%, growing in sales and net income at a 20% clip with a net income of 7 billion (EUR). It pretty much had the market cornered in volume and value.

A mere three years later that was all gone, and by 2011 they were loss making and a marginal player. Stock value went down 85% in that period helped along by the 2009 crash.

Not saying that will happen to Apple, I don't know. That fast-collapse risk is probably why the stock is priced as low as it is.
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Old 05-21-2016, 12:05 PM   #119
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This article is a mind-bender.

These 5 Companies Hold Over $500 Billion in Cash | Investopedia

Three-quarters of the cash these five companies hold is overseas.
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Old 05-24-2016, 06:32 PM   #120
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Correct, but they certainly behaved like a growth stock in the early- mid-2000s. Now, they're definitely a worthy value stock if you're not afraid of the tech sector. It still remains the only individual stock we own.

Obviously, this wasn't a Buffett move himself. He's actually said he would "never buy Apple". Buffett himself only bought tech a few years ago when he bought IBM, which is down 20% since his purchase according to what I read. (Makes me want to look into them!).
What has always boggled the mind, is that AAPL has usually had a P/E ratio in the teens, quite low now, just under 11. Whereas MSFT sports a P/E ratio of 40, and it only yields a little more (2.9% vs 2.4%).
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