Are those poeple insane? After a few years in the market, the iPhone is still growing 28% and analysts are not happy? What do they expect, that during the worst recession in decades people buy a new iPhone every year? Are we going crazy? Infinite growth does not exist.

Wall Street has come to demand automatic profits. They'll cheat and collude to fix interest rates if that's what it takes to insure their regular profit - regardless if the profits actually exist.

Blame Wall Street for pushing the idea of ever increasing wealth from investments. It is a lie, but they've hypnotized us all with greed and lies.

Wish people would stop speculating and just wait ... but that's not the nature of shares.

Herbie

I will never understand the stock market.

As Buffett stated "In the short term it's a popularity contest, in the long term its a weighing machine".  The popularity contest is getting out of hand.

Herbie

yes popularity contest is not for Buffett. I don't recall him investing in Apple.

1 day ago, spivonious wrote

@Dr Herbie: Agreed. Apple just made $8,800,000,000 in PROFIT in THREE MONTHS and their share price drops. They made $97,777,777.78 PER DAY.

I will never understand the stock market.

Stock prices are predicated on growth rate. If the rate of growth goes down, then the stock price should follow. IOW, stock prices are based on acceleration--not the velocity.

"One of the biggest risks to Apple's stock price and profit growth, ironically,  stems from one of the company's most amazing strengths:

Its shockingly high profit margin."

Read more: http://www.businessinsider.com/apple-profit-margin-2012-7#ixzz21oMKq24C"

13 hours ago, cbae wrote

*snip*

Stock prices are predicated on growth rate. If the rate of growth goes down, then the stock price should follow. IOW, stock prices are based on acceleration--not the velocity.

The point I'm making is that the stock in the short-term is not based on the companies actual worth, but on it's  predicted worth.  This is because of the cumulative effect of generations of traders trying to 'get in first' to get an edge on trading.  The end result is that the value of stock is affected by the predictions, but the predictions are affected by the value of the stock -- the whole thing is unstable and making life harder for everyone.

Herbie

1 hour ago, Dr Herbie wrote

*snip*

The point I'm making is that the stock in the short-term is not based on the companies actual worth, but on it's  predicted worth.  This is because of the cumulative effect of generations of traders trying to 'get in first' to get an edge on trading.  The end result is that the value of stock is affected by the predictions, but the predictions are affected by the value of the stock -- the whole thing is unstable and making life harder for everyone.

Herbie

Pretty much sums it up. 

In the next quarter, Apple will have to contend with analyst (and I use the term loosely) disappointment when they don't deliver an 7.85inch tablet powered by pixie dust and 60-inch Retina TV priced at $99

2 hours ago, Ray7 wrote

*snip*

Pretty much sums it up. 

In the next quarter, Apple will have to contend with analyst (and I use the term loosely) disappointment when they don't deliver an 7.85inch tablet powered by pixie dust and 60-inch Retina TV priced at $99

 

I think that's why they stockpiled so much cash ... they'll need the money to buy back the stock as investors wail that Apple is going down.

Herbie

It is always based on predicted value. Why would you invest in something when you know it is going down? If you know MS is going down in the next 10 years, why bother to buy/keep it?

Well, actually I invested something for at least 10 years, so yeah, some people would still consider the investment. My current investment is looking at 30 years of local mimima and local maxima. But obviously most people have much shorter window for this.

Your Buffett is analogy is more suitable. It is your choice to see celebrity Justin Bieber concert with bunch of screaming teenagers. Or you can choose to attend an orcastra with less comfortable, more serious attire.

What people are annoying is, they went to Justin Bieber's concert and then, few months later, they bad mouth how fast he lost fame, and complain his concert ticket was overpriced. Such shallow loyalty.

4 hours ago, Ray7 wrote

*snip*

Pretty much sums it up. 

In the next quarter, Apple will have to contend with analyst (and I use the term loosely) disappointment when they don't deliver an 7.85inch tablet powered by pixie dust and 60-inch Retina TV priced at $99 

Retina TV...let's see, to get 240dpi at a 16:9 60" screen would mean a resolution of 12551x7060. Ha, that would be nuts.

2 days ago, magicalclick wrote

@Dr Herbie:

It is always based on predicted value. Why would you invest in something when you know it is going down? If you know MS is going down in the next 10 years, why bother to buy/keep it?

I think Dr Herbie's objection isn't that the stock is based on predicted value, but that it's based on perceived predicted value of other shareholders (i.e. it follows the http://en.wikipedia.org/wiki/Keynesian_beauty_contest):

Keynes described the action of rational agents in a market using an analogy based on a fictional newspaper contest, in which entrants are asked to choose a set of six faces from photographs of women that are the "most beautiful". Those who picked the most popular face are then eligible for a prize.

A naïve strategy would be to choose the six faces that, in the opinion of the entrant, are the most beautiful. A more sophisticated contest entrant, wishing to maximize the chances of winning a prize, would think about what the majority perception of beauty is, and then make a selection based on some inference from their knowledge of public perceptions. This can be carried one step further to take into account the fact that other entrants would each have their own opinion of what public perceptions are. Thus the strategy can be extended to the next order, and the next, and so on, at each level attempting to predict the eventual outcome of the process based on the reasoning of other rational agents.

"It is not a case of choosing those [faces] that, to the best of one's judgment, are really the prettiest, nor even those that average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees." (Keynes, General Theory of Employment Interest and Money, 1936).

How about stop listening to the smaller six faces and follow the king of stock, Buffett.

Let's face it. There are guys who only date pretty girls with nice makeup. And when the girl take off her makeup, he goes ewww and runs out of the hotel room. And then complains why she puts makeup on and that the girl is fake. But the reality is, he would never date a girl with inner beauty.

This is why pretty girl's life is hard. Because there are so many shallow guys out there just want a piece of her instead of be with her. Their outside overshadowed their inside. They desire a guy who would see their true self, but, it is so hard when she is surrounded by shallow people. And it is even harder when those shallow people act as a barrier blocking her true love. Sometime it is sad to be rich and famous. 

My comment wasn't my opinion about beauty contests, or a social commentary about why pretty girls have a tough life or how it is tough to be rich and famous. It is a direct quote from Keynes, founding father of modern economics. And he wasn't stating what women, beauty or makeup. He was talking about markets. And not about what should happen in markets - but rather what does happen in markets.

I think magicalclick is talking about markets as well.

It's spot on.

It sounds more like the plot to a movie with Sandra Bullock than a commentary on the stock market.

And when you say it's spot on, do you mean that markets should be less Keynesian, or we should make them less Keynesian?

Nope on both. I am also not saying how the market should be. I am simply saying there shallow people out there. Popular girl like Apple will have group of shallow guys out there trying to obtain her as trophy, and will aggressively blocked anyone who can see her inner beauty. And when she is not attractive anymore, those shallow people will say how fake she is and dump her right away.

You can't change it. If you can, start changing from middle school or even elementary school.

6 hours ago, Maddus Mattus wrote

@evildictaitor:

I think magicalclick is talking about markets as well.

It's spot on.

Thank you

12 seconds ago, magicalclick wrote

@evildictaitor:

Nope on both. I am also not saying how the market should be. I am simply saying there shallow people out there. Popular girl like Apple will have group of shallow guys out there trying to obtain her as trophy, and will aggressively blocked anyone who can see her inner beauty. And when she is not attractive anymore, those shallow people will say how fake she is and dump her right away.

You can't change it. If you can, start changing from middle school or even elementary school.

I think you are over abusing this metaphor and confusing yourself. What have elementary schools or popular girls got to do with the markets?.

It sounds more like the plot to a "1960s coming of age teen romance film" than a nuanced criticism of the stock market.

okay.....