“Weaker business conditions combined with a less favorable job market continue to cast a cloud over consumers and heighten their sense of uncertainty and concern,” said Lynn Franco, director of The Conference Board Consumer Research Center, in a statement. “Looking ahead, little economic improvement is expected, and with the holiday season around the corner, this is not welcome news.”  

Why would AAPL defy gravity of the greater economy?  Where will Apple trade in a down market?

EDIT:  Sorry that should have read Feb 2008 but I can’t seem to change the question now.

allowing for volatility, there should be an “all of the above” option

Re: Apple An Insulated Economy?

[quote author=“Quadra”]Why would AAPL defy gravity of the greater economy?  Where will Apple trade in a down market?

First, you seem to be betting the farm on one person’s take on the economy - big mistake IMO.

Second, the Fed isn’t done cutting and if they cut again at the October meeting, it will further spur economic activity, rally the market, and inspire consumer confidence - all just AHEAD of the Xmas shopping season.

Is there risk - always. But never bet against the consumer.

HAB

Re: Apple An Insulated Economy?

[quote author=“HotAirBaffoon”] First, you seem to be betting the farm on one person’s take on the economy - big mistake IMO.

Bet the farm!  Dude I live in a penthouse…

Re: Apple An Insulated Economy?

[quote author=“Quadra”]   “Weaker business conditions combined with a less favorable job market continue to cast a cloud over consumers and heighten their sense of uncertainty and concern,” said Lynn Franco, director of The Conference Board Consumer Research Center, in a statement. “Looking ahead, little economic improvement is expected, and with the holiday season around the corner, this is not welcome news.”  

Why would AAPL defy gravity of the greater economy?  Where will Apple trade in a down market?

but if you were to buy just ONE cool gift over the holiday season - what would it be??

an apple iPhone? and apple iPod classic? an apple iPod nano? an apple iPod touch? an apple imac? an apple macBook? an apple macBook pro?  . . .

apple have the holiday season all wrapped up!

ignoring the questions:

Why would AAPL defy gravity of the greater economy?

Where will Apple trade in a down market?

[quote author=“Quadra”]ignoring the questions:

Why would AAPL defy gravity of the greater economy?

Where will Apple trade in a down market?

apple has always defied the general economy. the fact that apple even still survives as a company speaks volumes. apple survives through innovation. always has.
and lets face it - thats why we love apple.

we all love an underdog. we all love an upstart..we all love the rebel.

Well Quadra I voted above $150 because I do not think that the market has correctly valued Apple at present. If they do the math after Oct assuming we get a picture of the revenue sharing with AT&T then the stock will move up even though the stock may trade at a lower PE with a market pullback. The point is the E of the PE will be a fairer number for 08 earnings

[quote author=“the-irish-guy”][quote author=“Quadra”]ignoring the questions:

Why would AAPL defy gravity of the greater economy?

Where will Apple trade in a down market?

apple has always defied the general economy. the fact that apple even still survives as a company speaks volumes. apple survives through innovation. always has.
and lets face it - thats why we love apple.

we all love an underdog. we all love an upstart..we all love the rebel.

Careful,  you are confusing:  “Apple”  with “AAPL”

[quote author=“Quadra”][quote author=“the-irish-guy”][quote author=“Quadra”]ignoring the questions:

Why would AAPL defy gravity of the greater economy?

Where will Apple trade in a down market?

apple has always defied the general economy. the fact that apple even still survives as a company speaks volumes. apple survives through innovation. always has.
and lets face it - thats why we love apple.

we all love an underdog. we all love an upstart..we all love the rebel.

Careful,  you are confusing:  “Apple”  with “AAPL”

fair point - AAPL will defy the general market because apple innovates.

edit:

a little, little bit OT, i know, but:
“In his book The Circle of Innovation, Tom Peters offers his favorite quote on this subject, from management consultant James Morse, who says, “The only sustainable competitive advantage comes from out-innovating the competition.” Steve Jobs of Apple also knows this. “Victory in our industry is spelled survival,” says Jobs. “The way we’re going to survive is to innovate our way out of this.”

Switchers and increasing market share, not to mention the roll-out of Apple Stores world-wide over the next few years, means sustainable Mac sales growth in spite of whatever happens to the economy. People need computers. Macs are growing market share. Mac sales growth is insulated against a broader slowdown or decline in PC sales.
iPhone sales and market penetration, combined with Apple’s unique subscriber revenue sharing arrangements, means rising revs and earnings for years to come.

IMO, AAPL is one of the best-insulated companies against broader economic weakness, in the US or elsewhere, barring a full-on world-wide economic crash (which isn’t the same as a 15-20% stock market crash. Markets can collapse even in perfectly decent economies). But it would take awhile for that to be recognised. AAPL would fall hardest along with the best of them, but would be amongst the very first to recover IMO. So even if the markets tank 15-20%, AAPL’s corresponding (and fierce) sell-off would be relatively short-lived and lead to a strong rebound. AAPL under $150 in 2009 even with a 15-20% pullback in the markets? Highly unlikely IMO. Not with earnings growth at 30-40% YoY.

Thanks Snipus, for relating to the questions asked.  As noted, I mostly dropped out of AAPL.  Interesting with a forward PE ~33 and trailing of ~43 it’s hard for me to swallow AAPL as obviously undervalued.  I expect a blow out quarter…  but WHO DOESN"T?

I agree the prospects for AAPL are good in a growing or worse case neutral economic climate.  So you believe even if the markets tank 20% Apple’s news/earnings flow will remain so strong as to command a much higher share price?  Assuming of course the markets do tank 20% the economy would be potentially in serious circumstances and I simply couldn’t see AAPL immune to those circumstances.

Q, your question relates to AAPL in Feb 2009, not September 2007. Given 18 months of ever-expanding earnings and the deluge of revs and earnings that will begin to be booked by the subscription accounting method, the stock would be more underpriced than at almost any time in its history if it was at just $150 - whatever the state of the markets.

I think you’re in danger of trying to over-think and over-justify this a bit in your enthusiasm to justify selling out We all know why the forward PE seems a little high - because earnings estimates for the next couple of years are insanely, laughably low. To not recognise that is to ignore reality, and to fall into the same trap so many others do when they try to explain AAPL’s valuation.

Good luck waiting for a buying opp; we know how crazily this stock trades so you might well get another great one! I do think you’re asking the wrong question at the wrong time with your poll though.

BTW, I appreciate the dialog…  who knows, you guys may have me capitulating and buying back in soon.  As T (Tommo) correctly notes I’m still bullish on Apple but do take leave of AAPL when feel a top building…  and often I’ve been wrong.  Although, I’ve gotten out near the highs many more times than I’ve bought the lows I’ve taken hits from buying back too soon.

Re: Apple An Insulated Economy?

[quote author=“Quadra”]   “Weaker business conditions combined with a less favorable job market continue to cast a cloud over consumers and heighten their sense of uncertainty and concern,” said Lynn Franco, director of The Conference Board Consumer Research Center, in a statement. “Looking ahead, little economic improvement is expected, and with the holiday season around the corner, this is not welcome news.”  

Why would AAPL defy gravity of the greater economy?  Where will Apple trade in a down market?

Supposedly with this quarter’s numbers blowout, Apple should reach at least $180 a share.  The holiday should see even better numbers with overseas iPhone sales (assuming people buy them in droves).  Leopard is being released soon, new MacPros and possibly a slimline notebook.  With lots of new stores, Apple should continue to gain market share.  Even with a down market, I honestly can’t foresee Apple stock pulling back below $150.  It will probably split, anyway.  I guess you might say it’s mostly wishful thinking because I don’t know squat about the future.

Re: Apple An Insulated Economy?

[quote author=“Constable Odo”]Supposedly with this quarter’s numbers blowout, Apple should reach at least $180 a share. 

Not soon it won’t. Not with the rubbish guidance we’ll get for Q1 08. Anyway, I hope it doesn’t run up that far that fast. Even I’d be out short-term!