Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Old 05-24-2016, 05:35 PM   #121
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,006
Quote:
Originally Posted by Totoro View Post
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.
It happened so fast because the Apple iPhone, introduced in 2007, drove Nokia out of business (among other things, I suppose). I guess you'd have to wait for the Apple killer company to appear. Then bail.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-24-2016, 07:45 PM   #122
Thinks s/he gets paid by the post
nash031's Avatar
 
Join Date: Jun 2013
Location: Bonita (San Diego)
Posts: 1,795
Quote:
Originally Posted by audreyh1 View Post
It happened so fast because the Apple iPhone, introduced in 2007, drove Nokia out of business (among other things, I suppose). I guess you'd have to wait for the Apple killer company to appear. Then bail.

But Apple isn't reliant on a single product or even a single segment like Nokia. They have iPhone, iPad leading two sectors of the same ilk, Macs sell well, and they have services lines up now as well. They have also successfully created households run on Apple products (ask me how I know) and are leveraging that advantage to get into home controls ala Nest.

The chances they're driven out like Nokia are slim, but they could certainly lose market share in phones or pads.
__________________
"So we beat to our own drummer in the sun;
We ask for nobody's permission to run.
I just wanna live in a world like that;
Now I'm gonna live in a world like that!" - World Like That, O.A.R.
nash031 is offline   Reply With Quote
Old 05-25-2016, 07:31 AM   #123
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,677
Send a message via Skype™ to kcowan
The thing I like is their profit share. Even with marginally declining iPhone demand, their profit outstrips everyone. Comparing them to Nokia is one thing but they stack up well against Google, MS, Samsung, HP and a host of other competitors.
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Old 05-25-2016, 07:57 PM   #124
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: No fixed abode
Posts: 8,764
Up almost 10% from the Buffett buy. Darn it! I was so close to my buy order kicking in. Oh well, at least it's good to know I'm valuing something at just about the same level they are. But I doubt if I had bought first it would have driven the stock up 10%.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Anonymous (not Will Rogers or Sam Clemens)
DW and I - FIREd at 50 (7/06), living off assets
harley is offline   Reply With Quote
Old 05-25-2016, 08:14 PM   #125
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
I read a book by Gerald Loeb, a founder of E.F. Hutton & Co., where he said that when you think it is time to buy or sell, just do it at market price and do not use limit order. I have found that, quite often, haggling over a dollar may cause me to lose the opportunity.

On 5/18, when I sold June put on Apple, it closed at $94.56. Today, it closed at $99.62. If I bought it outright, I would have made $5/share. Instead, my put premium for the strike price of $92 only got me $2.36/share. Apple may continue to climb, but my gain is capped at that $2.36.

Oh well, less risk, less reward. Still, the annualized gain on the put works out to around 30%/yr, so I should be grateful and not too greedy.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 05-26-2016, 12:11 AM   #126
Thinks s/he gets paid by the post
Fedup's Avatar
 
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
I rather generate 7% consistently. I'm my own hedge fund manager.
Fedup is offline   Reply With Quote
Old 05-26-2016, 07:27 AM   #127
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,677
Send a message via Skype™ to kcowan
Quote:
Originally Posted by NW-Bound View Post
Oh well, less risk, less reward. Still, the annualized gain on the put works out to around 30%/yr, so I should be grateful and not too greedy.
You should be grateful because you got lucky. Never be too proud to accept the benefits of luck! And congratulations. Skill, risk and luck often combine to produce above average returns.
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Old 05-26-2016, 08:32 AM   #128
Thinks s/he gets paid by the post
 
Join Date: May 2014
Location: Utrecht
Posts: 2,650
Quote:
Originally Posted by nash031 View Post
But Apple isn't reliant on a single product or even a single segment like Nokia. They have iPhone, iPad leading two sectors of the same ilk, Macs sell well, and they have services lines up now as well. They have also successfully created households run on Apple products (ask me how I know) and are leveraging that advantage to get into home controls ala Nest.

The chances they're driven out like Nokia are slim, but they could certainly lose market share in phones or pads.
Two things here: 1) Nokia was never single segment. They sold telco equipment and services to carriers for example, and even home devices. throughout the years they've gone as wide as DSL modems, digital and analog set-top boxes, PC equipment and cards, and even televisions. 2) IPhone sales are 65% of their revenue. Depending on who you ask it's more than 65% of their profit too.

The chances that Nokia would be driven out were slim too. No telling how slim they are for Apple.
Totoro is offline   Reply With Quote
Old 05-26-2016, 10:26 AM   #129
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
Quote:
Originally Posted by kcowan View Post
You should be grateful because you got lucky. Never be too proud to accept the benefits of luck! And congratulations. Skill, risk and luck often combine to produce above average returns.
I mainly try to control my greed. And fear when the market turns. The market god hates braggadocio.

Anyway, these bets that I make using the cash I hold give me some returns that may beat CDs over the short periods I commit the money. However, they entail some risks, and I am not able to find "deals" like this all the time. It takes a bit of work too, and is never risk-free.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 05-26-2016, 06:04 PM   #130
Recycles dryer sheets
 
Join Date: Jun 2014
Posts: 440
Quote:
Originally Posted by Totoro View Post
Two things here: 1) Nokia was never single segment. They sold telco equipment and services to carriers for example, and even home devices. throughout the years they've gone as wide as DSL modems, digital and analog set-top boxes, PC equipment and cards, and even televisions. 2) IPhone sales are 65% of their revenue. Depending on who you ask it's more than 65% of their profit too.

The chances that Nokia would be driven out were slim too. No telling how slim they are for Apple.
That's the problem with disruption... easy to see in hindsight... hard to predict in advance, even taking into account it's hard to predict.

Often it's the things we think couldn't possibly be disrupted that are the most painful.

Personally I loosely apply the close my eyes and imagine 20 years test.

Will I have an iPhone? No idea. Will I have an Android? No idea. Will I eat a big mac? Probably. Will I be on facebook? Maybe. Will I drink coke? Probably.

Then, of course, price matters. I worked in tech all my life and am amazed at how fast things rise and fall so I'm hesitant to invest in it .

That said... I've missed huge potential gains in Amazon, Apple, etc but I remember getting killed on a relatively modest "no brained" investment in Cisco in the late 1990s. They were, at one time, the biggest company on the planet and similarly had a pretty clear path to long term domination. Of course, they were expensive compared to apple on a P/E and cash basis.

Oh well... if only it were easy .


Sent from my HTC One_M8 using Early Retirement Forum mobile app
petershk is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


» Quick Links

 
All times are GMT -6. The time now is 09:53 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.