McNamee Says Apple Stock `Best Days Are Behind It’

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    Posted: 15 March 2012 10:46 PM

    Interesting what he says, but it’s his only public stock that he owns.

    http://mobile.bloomberg.com/share/video/9vZzJ2Mzq4XZVnrTdOAV8SUG4_-Jq3S2

         
  • Posted: 16 March 2012 01:26 AM #1

    Infohunter - 16 March 2012 01:46 AM

    Interesting what he says, but it’s his only public stock that he owns.

    http://mobile.bloomberg.com/share/video/9vZzJ2Mzq4XZVnrTdOAV8SUG4_-Jq3S2

    I have to give some props to Roger.  He had his rear end handed to him (in a very public way) with palm by our friends at Apple but he carries an iPhone and clearly sees what the current situation is.  I can’t think of a single thing he said that I have a disagreement with.  VERY unusual.  :bugeyed:

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  • Posted: 16 March 2012 01:39 AM #2

    He comes off like a Mad Doctor Zulu.  He sounds rational on balance.  Yet his glib quote about Apple gets all the attention.  I say glib because he doesn’t explain WHY.  He still owns AAPL if you’re just reading “the gotcha.”

    Another unsupported headline.

         
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    Posted: 16 March 2012 01:56 AM #3

    Thanks Mercel.  You saved me a click and a few minutes.  wink

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  • Posted: 16 March 2012 02:03 AM #4

    This is an interesting interview for me,  as Rogers’s “best days” comment mirrors something I have started to feel as a result of this explosive run.  I have held this stock since 2002, and my original investment is up 78x. I have never sold, or even saw the horizon out there that says I should start to consider selling some of my holdings.

    Now I am starting to feel that for me at least that we have now entered the “beginning of the end” phase. What is the realistic best case upside from here?  Another 2x or 3x, before almost the entire investment community has a piece of Apple, or they miss a platform discontinuity?  Then what happens?

    For these past 10 years, I thought the investment had two great things working for it. The first was and still is being the best managed tech company in the world. Whoever is in second place is so far in the rear view mirror that I can’t even name them. This piece is still intact.

    Ironically, the second piece was that Apple was unloved and somewhat of a secret.  I always felt that at some point “everyone” was finally going to get the story. And when that happened the stock would finally get its just rewards.  I think we have hit that point in time. Even the most clueless and skeptical have come to realize what a special story Apple is.  Our little secret is now out in full daylight for the entire world to see. My strategy was to never even think of selling while a substantial part of the investing world thought Apple was a fluke or doomed in the short term.  We are now witnessing the impact of Apple getting the respect it deserves.  But it also means that my second reason for never selling is entering the end game phase.

    The “just rewards” are just getting started, but I think we might be shocked at how fast we could rocket to fair value now.  When we get there, we become way more vulnerable to a set back or disappointment, because then “everyone” gets disappointed, not just the true zealots. 

    So I am now thinking that in the next two years Apple will reach the point of needing to be treated like a more traditional investment, rather than the special one that some day was going to be the home run.  None if this means I am thinking of selling anything now. I think we have a reasonably easing ride to $1000 per share in front of us.  But when that time comes I think it could very well be the time to take quite a bit of money off the table.

    The strange part to all of this, is that it gives me mixed emotions. If we really do get to the $1000 mark, then the investment will have far exceeded anything I had a reasonable right to expect.  Surely a once in a lifetime event. But now that I am starting to sniff out the end game, it make me realize what a large part of my life this investment has become.  It feels odd that soon it could become “just” a good investment worthy of a much smaller part of my portfolio.

    I guess that I can always hope that when we hit $1000, that it is still stupidly cheap. Well as stupidly cheap that a trillion dollar market cap can be I guess.

    [ Edited: 16 March 2012 02:07 AM by Lstream ]      
  • Posted: 16 March 2012 02:23 AM #5

    In this 3 year old video, Roger speaks of the Palm Pre as the next big thing.  He also said Apple and BlackBerry will continue to do “fantastically well.”  He got 1 out of 3 right.

    I’d take his musings with a grain a salt.

    http://www.youtube.com/watch?v=WBSdR0H27iE

    [ Edited: 16 March 2012 02:33 AM by ByeTMO ]      
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    Posted: 16 March 2012 03:00 AM #6

    Because I was on mobile it was much easier to hit “Done” and stop watching right after his two propositions:

    (1) Law of Large Numbers (self-explanatory)

    (2) To get to $1000 Apple needs a bull market.

    He’s a whiz VC or whatever, he owns AAPL, great.  But in about a minute I had had enough.  Glib and not really getting why he owns the stock.  Sell before $1000 my friend.  We’ll still be here if you ever decide to buy back in.

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  • Posted: 16 March 2012 03:19 AM #7

    Lstream - 16 March 2012 05:03 AM

    Ironically, the second piece was that Apple was unloved and somewhat of a secret.  I always felt that at some point “everyone” was finally going to get the story. And when that happened the stock would finally get its just rewards.  I think we have hit that point in time. Even the most clueless and skeptical have come to realize what a special story Apple is.  Our little secret is now out in full daylight for the entire world to see. My strategy was to never even think of selling while a substantial part of the investing world thought Apple was a fluke or doomed in the short term.  We are now witnessing the impact of Apple getting the respect it deserves.  But it also means that my second reason for never selling is entering the end game phase.

    Nope.  The more that “know” about Apple the higher the valuation of AAPL.  Same number of shares outstanding - more investors wanting the stock.

    The “just rewards” are just getting started, but I think we might be shocked at how fast we could rocket to fair value now.

    “Fair value” is an ever moving target.  It is driven by investor desire to derive the highest return on his investment that his/her risk tolerance can tolerate.

    Apple/AAPL could grow for several years before plateauing, there is that much head room in Apple’s current arenas.  Then there is always other markets to conquer, or create.  Just like Ford before it, Apple has not only changed the technological world, it has also changed the way businesses operate.  I don’t see Apple/AAPL plateauing in my lifetime.

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  • Posted: 16 March 2012 04:20 AM #8

    For Lstream comment:

    McNamee is always entertaining. And sometimes he is talking his position and interests up and sometimes he is just talking. On a rare occasion he shows a little thoughtfulness and on a rarer occasion he shows insight. He is clearly not selling his shares nor announcing that he intends to at some dollar amount like $1000.

    His entire business career prevents him from giving anything away to you before he is in a position.

    He and his staff will re-evaluate his holdings every quarter going forward given announced corporate performance and look around for a better return instrument. They are not going to announce their selling until after it is done.

    After it is sold, they might be bold like Prince Alaweed did in 2005 and proclaim that there would be no other hit product like the iPod so he sold down the majority of his holdings at a good time (giving up so much more).

    [Ed. And meanwhile the media claimed savvy investor Berkshire, ever so steady and safe, misses getting an Apple position again though hordes of consumers wait hours around store fronts. They say nothing publicly about it when it stares them straight in the face that they may have misread the situation. Maybe they are taking a position the last three market days with the huge share trading volume going through?]

    As far as your “beginning of the end” for the share price ride and AAPL share price “getting the respect it deserves”, I would beg to differ and say the market is just getting it back to a valuation position it should have been a couple of market years ago given its outstanding corporate, revenue and profitability performance.

    Your patience will be further rewarded as some of the liquidity sitting around on the sidelines in bonds and other instruments comes back into the equities market and Apple will seem attractive, safe, cashed up, etc and “little downside risk”.

    And Tim Cook might actually be believed that there are more products this year they are working hard on and they “will blow your mind”.

    With the adoption rate of the iPad greater than the iPhone and iPod, might we not look at Apple and say it is the “beginning of the beginning”  instead?

    I am not brave enough to say the market was wrong about not having a higher Apple price over the last three years or so but I will point out that it is once again clearly catching up to what Apple has achieved and is likely to achieve going forward. It is beginning to realize that this historical corporate record revenue, profit and cash reserves performance is not a once off, it is not going to diminish this year nor next, its competition is not keeping up in product innovation terms, and the executives in charge are not resting but are fully engaged in their business in all aspects down to the other people’s factories floors.

    Do re-read some Horace Deidu/Asymco market size numbers for smartphones and tablets this year and in the near future.

    The sheer size of those potential consumers is the law of large numbers people should be referring to. The numbers underwrite Apple will have success if they keep executing as they have done in the last few years.

    There are hundreds of millions and billions to be sold and Apple is already in the leading position to benefit from this uptake.

    Get a good night sleep and re-evaluate your holdings at the next financial results announcement. If you find anything better, let us know.

         
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    Posted: 16 March 2012 04:29 AM #9

    Great post, G.

    And luckily enough for those of us who dare, there is a nice little options market out there for AAPL.  A high-risk, high-reward vehicle for taking advantage of market asymmetries like the view that AAPL’s best days as a stock are behind it.

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  • Posted: 16 March 2012 09:19 AM #10

    2012, 2013 and 2014 consensus EPS forecast are ridiculously low :

    43.18 for 2012
    48.45 for 2013
    51.86 for 2014

    The consensus rate of growth for GOOG is twice AAPL’s

    GOOG P/E is 21 and AAPL P/E is 16.7

    This leads me to believe that the best of AAPL is still to come.
    I expect analyst to up their EPS forecast in next 6 month.

         
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    Posted: 16 March 2012 09:55 AM #11

    As a venture capalist he is looking for start up companies that he thinks have a 20:1 potential.
    I think we can agree that those days are behind Apple but he also thinks that this is the best public stock to own and has a lot of growth left in it….......just my take on what he was saying.

         
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    Posted: 16 March 2012 05:10 PM #12

    Any stock not likely to go up 10-50x has had its best days behind it.  I’m not even going there.  rolleyes

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  • Posted: 16 March 2012 06:53 PM #13

    The US markets closed and Apple ended its week with little doubt of record shipments of the new iPad in more countries than ever before for a iPad launch date.

    Apple share price is very near its all-time high.

    I see Roger McNamee still has not shifted his Apple position though he thinks its best days as a stock are behind it.

    I can’t figure out what he is waiting for.

    From the OS X dictionary application: “As such, one may judge that others “have integrity” to the extent that they act according to the values, beliefs and principles they claim to hold.”

         
  • Posted: 17 March 2012 05:40 PM #14

    Mav - 16 March 2012 08:10 PM

    Any stock not likely to go up 10-50x has had its best days behind it.  I’m not even going there.  rolleyes

    I’m reminded of an analyst’s comment back in ‘97 or ‘98. AAPL had just run up up about $10, and this scientist said, “the easy money to be made in AAPL was over”.

    A Harvard MBA, and a $1,500 suit does not an expert make.

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    Posted: 17 March 2012 06:23 PM #15

    Mav - 16 March 2012 08:10 PM

    Any stock not likely to go up 10-50x has had its best days behind it.  I’m not even going there.  rolleyes

    Apple best days are not synonymous to AAPL best days, huh grin.

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