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05-24-2016, 05:35 PM
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#121
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,006
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Quote:
Originally Posted by Totoro
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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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.
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05-24-2016, 07:45 PM
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#122
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Location: Bonita (San Diego)
Posts: 1,795
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Quote:
Originally Posted by audreyh1
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.
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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.
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05-25-2016, 07:31 AM
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#123
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,677
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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
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05-25-2016, 07:57 PM
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#124
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2008
Location: No fixed abode
Posts: 8,764
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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
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05-25-2016, 08:14 PM
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#125
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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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)
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05-26-2016, 12:11 AM
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#126
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Thinks s/he gets paid by the post
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
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I rather generate 7% consistently. I'm my own hedge fund manager.
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05-26-2016, 07:27 AM
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#127
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,677
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Quote:
Originally Posted by NW-Bound
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.
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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
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05-26-2016, 08:32 AM
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#128
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Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
Posts: 2,650
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Quote:
Originally Posted by nash031
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.
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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.
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05-26-2016, 10:26 AM
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#129
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Quote:
Originally Posted by kcowan
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.
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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)
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05-26-2016, 06:04 PM
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#130
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Recycles dryer sheets
Join Date: Jun 2014
Posts: 440
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Quote:
Originally Posted by Totoro
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.
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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 .
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