“É o preconceito contra a flexibilização que tem conduzido a salários baixos”

[Alfred E. Neuman]

In Defense of the iEmpire

By Tim Beyers
October 7, 2004

Let me acknowledge right up front that there is no way to justify Apple Computer's (Nasdaq: AAPL) price tag using traditional valuation methods. There, I said it. Feel better, Seth? Well, don't get comfy, bucko. I'm not going into this duel with my PowerBook tied behind my back.

Still, it's hard to make an argument for Apple's stock when value investing guru Benjamin Graham wrote in The Intelligent Investor -- a book I prize -- that selecting a stock with the expectation of unlimited future growth is foolish (notice the small "f"). He's right. It's darn near impossible to properly value growth stocks because growth is never 100% predictable. Heck, it's often not even 50% predictable.

So, where does that leave Apple, the very definition of a growth stock in this market? With a big worm hole in its side if you use Graham's traditional yardsticks such as cheap multiples and deep discounts on book value. For example, Apple is trading at more than 70 times trailing earnings. That's more than twice the multiple of market leader and Motley Fool Stock Advisor pick Dell (Nasdaq: DELL) and three times that of the S&P 500.

A Rule Breaker if there ever was one

So why in the world would you want to be a part owner of Apple at that kind of premium? Because, dear Fool, the company is a classic Rule Breaker.
For the uninitiated, the core tenet of rule-breaking investing is to find companies that take a stick of dynamite to the conventional wisdom on the way to outsized economic gains and, thereby, investment returns. (You can learn more about Rule Breaking by taking a free trial to David Gardner's growth newsletter Motley Fool Rule Breakers, which not only explains the strategy but also takes subscribers through a monthly quest to find the ultimate growth stock.)

So, how does Apple measure up as a Rule Breaker? Well, let's break down some of the so-called conventional wisdom:

You should never invest in a stock with a P/E higher than that of the overall market.

Really? Back in February, when I recommended Apple for the year ahead, the stock was trading for more than 60 times its trailing earnings. Eight months and +80% later, I'm blushing red for not following my own advice.

Apple can't make money charging premium prices for a commodity product.

Apple has been defying this maxim for years, ever since Steve Jobs returned as CEO and pulled the plug on lower-cost Mac clones. Back then, I thought Jobs was nuts. But he figured Apple's future would be secured by restoring its name as a premium brand. Guess who was right on that one? A recent report in BusinessWeek compared the slick new iMac G5 with a Dell Dimension 4600. When both are loaded with comparable features, the Dell sells for roughly $550 less. But the stylish Macs are the ones reportedly flying off the shelves, so much so that some on Wall Street are expecting the new iMac to grow Apple's measly 2% global PC market share.

Windows is just as good as the Mac; there's no reason to get one anymore.

Sorry, wrong again. But this time I need only five words to prove it: no Mac OS X viruses. (Even the virus that hit my PowerBook was never able to execute. The damage created by deleting my e-mail in-box wasn't due to the bug but instead to an overzealous cleaning job performed by Symantec's (Nasdaq: SYMC) Norton Anti-Virus.)

There's no money in digital music; Apple is dominating a meaningless market.

Apple's iTunes Music Store reports more than 125 million songs sold. It's now also making money. Probably not a lot, but even if Apple collects only two thin pennies from each 99-cent download, that's still $2.5 million in profit. And more money is on the way: Forrester Research (Nasdaq: FORR) has reported the market for digital music will rise more than 700%, to better than $2 billion, in the next three years. Were Apple to somehow drop from 70% to only a 30% share of the digital music downloading market -- unlikely, to say the least -- that would still equal $600 million in sales. Last year, Apple's low-end portable, the iBook, netted $717 million in sales.


The Mac was a once-in-a-lifetime success; Apple can't create another cultural icon.


No Apple product since the original Mac has taken off as fast as the iPod. Indeed, in less than three years Apple has sold more than 3.7 million of the stylish little digital music players. More than 2.4 million of those sales have come this year, creating $769 million in revenue. That's more than any other Apple product save the Power Macintosh and PowerBook lines.

And don't expect demand to slow anytime soon. A recent survey of 600 teens in eight states conducted by researcher Piper Jaffray (NYSE: PJC) showed 25% of respondents without an iPod said they would buy one by year's end. It also ranked fourth on the list of kids' most-wanted Christmas gifts behind -- get this -- clothes, money, and a new car.

It's too expensive to sell Macs in a retail store.

Apple now has 86 lavishly decorated stores. For the first nine months of the year, retail sales are up 89% over 2003, to $809 million. 'Nuff said.

Invest like a venture capitalist

One of the great Rule Breaking maxims is that to break the rules you must learn to invest like a venture capitalist. Why? Because VCs embrace risk.
No, they aren't thrill seekers. They're disciplined investors who spend loads of time evaluating companies. But when they invest, it's with both feet, betting on big returns. They make money by betting on a diversified set of high-risk businesses. Many of those bets ultimately don't pay off, but a few do, and it's those few that lift the portfolio, generating stratospheric returns. VCs are Rule Breakers.

Graham also believed in this style of investing, but he called it informed speculation. And that, Fools, is what Apple is. Jobs is building an iEmpire that is aimed at powering individuals who like to work and play hard and enjoy being just a tad digital. Does that sound like anyone you know? It would if you were in your 20s, or maybe if you had teenage kids.

The kids are all right

The old saw that Apple is the premium player in a commodity market completely misses the point. Here's the rub: Kids love Apple. Kids love the iPod. Apple has a way of appealing to this crowd more than does Dell, iPod partner Hewlett-Packard (NYSE: HPQ), or IBM (NYSE: IBM). And that's good news, because they have deep pockets. Pollster Harris Inactive says Generation Y -- kids and young adults born between 1981 and 1995 -- has more than $200 billion in annual disposable income. They're only going to earn more as they get older.
Standards that used to lock customers to a platform such as the Mac or Windows don't matter that much anymore. And they'll matter even less in the future. That means kids who develop a liking for Apple now may have no obstacles to becoming customers for life.

Does that sound far-fetched? Maybe. But every Rule Breaking endeavor does at the beginning. Now, who's up for a vacation in outer space?

[Alfred E. Neuman]

This week we're dueling over the prospects of one of our most popular stocks here at Fool.com: Apple Computer. Loved by many, hated by just as many, Apple separates Fool from Fool frequently in our discussion boards. We take the battle to the front page today with Fool contributor and Mac aficionado Tim Beyers defending the iEmpire while Fool Seth Jayson argues that Apple is rotten to the core. After you've read both sides, vote on which one has won your heart.



Apple Is Rotten

Apple fans don't want to hear it. Analysts don't want to say it. But here it is: Apple's ready for a mighty big fall. The Borg-like fidelity of Mac zealots, coupled with misplaced enthusiasm for the firm's nifty gadgets and a giant dose of media hype, has conspired to push the stock far beyond a rational valuation.


By Seth Jayson (TMF Bent)
October 7, 2004

Ladies and gentlemen, the Apple (Nasdaq: AAPL) is rotten. OK, let's qualify that. After all, this is to be a discussion -- for the most part -- about Apple the company, not Apple technology. Apple's stock is overripe. Stinking. Mealy, full of worms, and wholly unsuitable for public consumption. Why? Shortsighted enthusiasm.

No doubt about it, Apple the brand is hot. Over the past couple of years, the stock has outperformed the S&P 500 by a huge margin. There's a one-word reason: iPod. The world's best-known digital-music doodad has juiced Apple's sales over the past several quarters and made the company the latest shoeshine-boy stock. What's a shoeshine-boy stock? Something like Krispy Kreme (NYSE: KKD) before it found out that reality bites. It's the popular company, the one that gets free press coverage with every new retail outlet, the stock everyone's telling you to buy. And as Lynch and others have pointed out, when the wingtip-buffing ragamuffins recommend an equity, that's a pretty sure sign that the hot streak will be coming to an end.

But the shoeshine-boy syndrome isn't the only symptom of Apple's upcoming malaise. There are others, clearly visible in the financials. Why no one seems to notice the obvious is another story, and, conveniently enough, that's the one we'll explore first.

Think different, like me!

"Think different?" I've always found this key slogan in Apple's marketing to be troubling, and not just because it shows that CEO Steve Jobs needs to brush up on his fifth-grade grammar. (Hey Stev-o, buy yourself an adverb!) It's creepy and ironic because Mac fans -- especially the ones who write me -- are about as freethinking as the lovely ladies of Stepford. They're like a pack of Moonies telling a congregation of Snakehandlers, "You're brainwashed. Join us to free your mind."

Americans have always preferred their rebellion in commercialized and socially acceptable packages -- witness GM's Hummer H2, Harley Davidson motorcycles, or the Mullet -- but wake up, people! Leaving a $300 billion monopoly to support a $15 billion one does not constitute intellectual daring.

In fact, it simply means you've got less consumer freedom, not more. Think I'm making this up? Ha! Count the PC vs. Mac software packages at your neighborhood Best Buy. Try using your iPod with competing software. Try using any non-Apple MP3 player with iTunes. This is more than a question of tech theology: Mac's legendary insularity has always been a huge anchor on growth.

Apple's iTunes and iPod are the biggest things in digital music today, and Jobs and Co. are determined to screw it up. Why? They think different, all right. By refusing to play nicely with outfits such as RealNetworks (Nasdaq: RNWK), Roxio (Nasdaq: ROXI), and Loudeye (Nasdaq: LOUD), Apple's not only passing up lucrative licensing opportunities but also missing the chance to rocket to the front of the digital music world forever.

Taking measured steps toward dominating a market is how Microsoft (Nasdaq: MSFT) came to be 20 times bigger than Apple. As things stand, Apple's congenital narrow-mindedness makes it easy pickings for the dozens of dit-music firms out there who want to take a bite out of Cupertino. Just because none of them have come up with anything as nifty as the iPod doesn't mean they won't. Low-margin iTunes is already under threat.

But surely Apple's management realizes this fatal error, right? Don't count on it.

Hey, Emperor! Nice duds!

The end result of the overdone enthusiasm for Apple is a major lack of accountability. I've worked with Macs for well more than a decade, and though they've gotten more stylish, they haven't necessarily gotten any better, especially compared with the competition.

Consider the photo and design audience. For years Apple has been milking its reputation as the computer of choice for this constituency. There was a time when Macs had a lead that looked insurmountable. That's no longer the case.

Every year I get to play with brand new Mac gear -- direct from Apple -- as the "tech guy" at a well-known photojournalism workshop. This year, as usual, I wasted entire days trying to coax the new Mac OS to make nice with a variety of printers. Plug and play? Try plug and pray. Color fidelity, WYSWYG? Not with top-of-the-line Power Macs and cinema displays, I guess. This year, incredibly, I ended up relying on a no-name Windows laptop purchased at Wal-Mart's Sam's Club to do the heavy lifting.

I'm not surprised, because I've seen this for years. But here's the odd thing: Even though the diehard Mac fans (everyone there) were cursing the quality of the machines and the OS, they remain Mac fans. They've made a lifestyle choice, and they're sticking with it. But their sheepish acceptance of the frustrating state of affairs is another drag on Mac growth. There's no need to improve when all you hear is how great you already are.

Stockholders should realize that when you're fighting for turf on the open market, style goes only so far. To judge by the public's lukewarm response to Mac computers over the past few years, Apple's not so efficient with the proselytizing. For 2002 and 2003, total Macintosh unit sales have been either flat or negative. So far this year, they're doing better, up 10%. Sound good? Dell's (Nasdaq: DELL) unit growth is 50% better, at 15%. And industry observers have recently started to wonder whether the late launch of the new iMac and limited availability of the new PowerMacs will rein in Apple's slimmer scale-up. Outside the iPod, Mac is definitely not a quick grower, so what's up with the stock price?

Two-bit Apple

Apple is one of those companies where investors are enthusiasts, and vice-versa. Sometimes, that's OK. But in this case, the result is a self-deluding, self-amplifying feedback loop. Earlier this year, there was reason to cheer the iPod's contribution to the top line. But these days, it's nearly impossible to hear through noisy enthusiasm.

The cacophonous refrain these days is the claim -- so far unsubstantiated -- that the iPod will increase demand for the company's computers. Over the past few days, the Macintosh media have repeated this contention, pointing to a single analyst's pie-in-the-sky wish for an increase in Macintosh market share. Here's what was actually written: A .5% increase in market share is "not out of the question."

Not out of the question?

Listen, a visit to my back yard from people-probing Martians is also not out of the question, but that doesn't mean you should bet your investing dollars on the likelihood. How about looking at the numbers instead? Yes, let's.

To start with the obvious, Apple's price to earnings ratio (P/E), we find a 73. Yikes! The forward P/E, based on estimates, clocks in at 43. Though it is a mistake to judge a company only by its P/E ratio, the fact that Apple's is more than twice its competitors' demands some explaining.

Hey, Apple is growing, right? So, when we account for Apple's likely rate of expansion, is the stock's price more solid ground? Hardly. When you compare the P/E to expected growth, through the PEG ratio, Apple's stock looks even crazier. Apple's PEG is an insane 3.36.

Yes, the PEG is a bit old-school, but it's still a good rule of thumb. When paying up for growth, you should start getting skeptical when the P/E exceeds the rate of growth. When they're in balance, the PEG sits around 1. You could argue that Apple's explosive earnings increase over the past year has put this metric out of whack, but even if you don't believe in absolutes, taking a look at Apple's peers provides a good dose of reality. Dell's PEG is 1.37. Hewlett-Packard's, 1.45. Even Google's 2.38 is an order of magnitude lower.

OK, we're still talking about valuation shorthand here. Certainly there must be some other reason that people are paying such a premium for Apple. Could it be superior margins? Nope, Apple's operating margins of 3% are pathetic by industry standards. Those are the kind of margins you see in cut-rate retail businesses -- 2% lower than Wal-Mart's! What that means is that Apple is going to have a tough time continuing to club earnings out of the park, even if it can scare up big sales gains. To see what a profitable tech firm should be achieving, look at Dell's 8.5% operating margins, or Microsoft's 24%.

C'mon, there must be something! How about major products in development? Nothing so far. In fact, one of the few analysts brave enough to put a "hold" on Apple recently was practically begging the firm to come up with anything new. A flash-RAM iPod, a set-top box, a media PC, anything. When the analysts start pleading for a reason to stay bullish on the Street's favorite pet rock, it's time for savvy shareholders to look for the exits.

The final word

Friends -- and by friends, I mean those of you out there furiously typing angry defenses of Apple -- open your eyes. Enthusiasm for a computer, pocket stereo, or cleverly marketed lifestyle choice is no reason for an investment. Apple's done well over the past two years, but the stock is now priced beyond perfection. For your $40 a stub, you should be getting an unstoppable business with huge growth potential. Instead, you're getting a slowing, sub-par nerd-niche operator with a shiny surface. To add insult to injury, 47% of the stockholders earnings so far this year are wiped when you consider the impact of stock options. Where's the payback for shareholders?

They wax and polish the mealy apples at the supermarket in order to fool you into buying them. Don't fall for the same trick when you're buying stocks.

[Alfred E. Neuman]

resitência nos 40,9 funcionou na perfeição

iremos a assistir a uma correção do imparável movimento de subida registados no último ano e meio ou será apenas um "pequeno passo atrás" para furar a resistência com o objectivo final de fechar o gap?...não sei..

deixo 2 artigos onde as duas visões se degladiam

[Alfred E. Neuman]

48..nao 44

[Alfred E. Neuman]

tem estado imparável...vamos lá ver se pára por aqui, se ultrapassar a resistência mt vai fechar o gap, nos 44

[Alfred E. Neuman]

Alfred podes dizer o link de onde tiraste esta ultima imagem que colocaste.


1 abraço e parabens pela tua participaçao aki no forum

http://clearstation.etrade.com/

[Bullet]

Alfred podes dizer o link de onde tiraste esta ultima imagem que colocaste.


1 abraço e parabens pela tua participaçao aki no forum

[Alfred E. Neuman]

Apple Computer (AAPL)

4 Outubro 2004

[Alfred E. Neuman]

Ver também

http://www.caldeiraodebolsa.com/forum/v ... ight=apple


Apple Computer is a leader that is extended. The stock has made quite the move this year and is perfuming exceedingly well. AAPL is up 67 percent this year. The year over year gain has all occurred this year. The solid advance began after the stock broke through its three-year plus high earlier in the year and struggled for a while finally breaking through recently.

Examine the weekly chart and notice the big gap that is in the process of getting filled. The stock has the potential to rise into the mid 40's and ultimately challenge 55 a share. That was the zone when it free fell on Sept. 29, 2000. It fell from 55 to 26 in a day. It is now on track to backtrack. The stock is currently extended so it could be had between 33 and 34. The stock will not move straight to 55 so manage it.

Place the initial stop loss at the 50 day moving average 31.99 and a final stop at 29.60. Give AAPL some room.