FYI: Apple Lovers, how people think now even after Buffet Magic

This is not my post even though I reduced AAPL today

I sold all my Apple stock

It’s going to be very difficult for them to grow. Cars are one area that’s big enough to create meaningful revenue growth. It remains to be seen if they can do it. The put together a team of system experts from suppliers. Someone needs to put all the systems together into a car. I think they are short on that expertise.

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Apple or any Tech companies make big margin when their product is successful. This is the main reason they are attractive. There must be new products, eye catching improvements.

That Reddit post is terrible. The reasons the post cited are mostly illogical and bad. It’s obvious the person doesn’t know what he or she’s doing. Apple fundamentals drastically changed in one year? Stock buyback is bad because the alternative of spending like a drunk sailor is better? The list goes on.

I personally sold quite a bit of AAPL because I need the cash to build a new position in AMZN. I still like AAPL that’s why it’s still in my portfolio.

I was lucky to make some positive growth by Buffet Magic.

They are provided by long term holders of apple. They are genuine. Apple becomes value stock, like buffets hold, but lacks the growth unless new innovative products are coming.

I reduced my apple exposure by 60% now so that I can move the money in various other companies like GOOGL, AMZN, PYPL etc. When I moved I see significant improvement ranging from 6% to 10% growth on amount.

Same is the case for TSLA, Musk is making wrong moves like Jerry Young.

Here is the Great post in favor of Apple

I no longer view Apple as a growth stock because it is near impossible for Apple to come up with a product that is better than iPhone from the revenue and profit perspective. iPhone is incredibly profitable. There are much better opportunities elsewhere. Apple should be viewed as a value stock like JNJ and PG. Tim Cook did an incredible job soft landing AAPL + two Question Marks/ Wild Cats (Apple Watch and Services). iOS devices = Stars about to turn to cash cows. MacOS platform = Amazingly still a cash cow. At present, car initiative is a money gushing project.

Do you consider Apple TV (not the physical product) is a service? Car initiative might be a service too.

Yes, Apple has become value stock with Buybacks, Dividends etc and they maintain very well.

Reg, Apple products buyers may like them with seamless software sync capability. This can be like another apple watch, just adds revenue stream. If cost effective than Samsung and LG, which I doubt, then a sea change product.

Apple TV, how much it can break Samsung and LG?

Reg, car initiative: If this is software alone like autopilot or automation, apple has better opportunity as the quality is better. Still they need to compete with Google. just browse “Boston Dynamics” which was taken over by Google.

If Manufacturing EV cars like Tesla, Apple will end up spending exceptional money to add a product, but I do not think it is a big win for apple. First, Apple has higher profit margin on iphone and computer products. Car sales will not match these profit margin. Second, Apple will easily be ranked fourth, next to Tesla, Nissan, GM unless Apple makes a better breakthrough in Battery technology than Tesla.

Apple lovers may not like the last statement, but this is the fact - as of now.

What apple lacks is innovation or VC funding for innovative companies which both Google and Facebook do.

Take for example: Robinhood: How many of forum viewers know about this startup? I guess very few. This is breaking all the norms of stock traders with zero commission platform, very well funded (almost $60M) by google. Last I heard, this has crossed $1.2M users within a short period of 2 years. Once this becomes IPO, Google gets max benefit as they may have lion’s share.

Google has put Boston Dynamics up for sale.

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Apple is not a financial investment company so would not have VC funding.
Apple is definitely innovative, articles that claim otherwise is pure BS.

But autos are very low margin items. Apple’s success has centered around new markets and high margins. I’m skeptical, not of their ability to produce a high tech, self driving auto, but of being able to do so and make any money at it. Low margins are not their area of expertise. It’s and entirely different kind of business.

Cell phones are low margin yet iPhone enjoys high margin. Ditto for music players.

That’s the Apple fanboy effect. I’m not sure it will extend to something as expensive as automobiles.

This might have worked for Tesla for the moment, but that’s mainly because they are also selling to a well heeled fan club which is a very, very limited market. The Model 3 will either be their triumph or their swan song.

And, even if they are triumphant, I suspect that the big boys who know a lot more about cost effective auto manufacturing will be buying them out.

Don’t get me wrong. I have nothing against Apple the company. I remain long AAPL as I type this. However, I don’t see auto manufacturing as an area they would be competitive in. It’s an almost non-profit, cyclical industry with high costs, low margins that even the huge, conglomerate legacy players have difficulty enduring in.

Remember Oldsmobile, Hummer, Saturn and Saab?

Downfall of American auto is a lousy example, they are lazy fat cats over replying on domestic market and USG. Apple has yet to openly state what is project Titan, pundits are the ones assuming Apple is making a physical product, and further assume it would go it alone. I believe Apple has not decided on the go-to market strategy or the business model. The project could be cancelled or modified as necessary.

O.K. Then substitute VW AG, Jaguar, Land Rover, others. And, in the auto tech world, Delphi - England based - isn’t exactly burning up the world at this juncture.

I’m just saying, that the idea that Apple or, anyone else, can bring profitable, extreme disruption to the world of automobiles is just that, an idea. And that history is littered with those who’ve tried.

When was the last time any company produced a “new” product with eye catching improvements in the transportation sector? Compare that to the last time some company said they would.

This is the exact mistake SUN Microsystems excluding themselves from opportunities.

SUN did not like to come out of Hardware and main frames. IBM & AT&T also did, spin offs made wonders.

VC funding is not for investment purpose, but innovation purpose. Any way, this is TIM Cook or Apple issue.

News to me. I do not know what is in Google’s mind, Boston Dynamics is an excellent company, potential to grow.

It is hard for apple to excel in this field (this is my opinion, may be right or wrong). On any case, apple fall is stabilized by Buffet magic, that is great for Cupertino residents.

Buffett magic is as magical as Carl Icahn, only short term traders are mesmerized by such transaction.

I am not smart enough to evaluate what Apple can or cannot do. All I know Tim Cook is way more capable than me, and is a very honest man.

Apple has job openings for automotive engineers. Judging by the battery openings, it’ll be electric. They’ve hired plenty of engineers for all automotive systems. They are going to build a car.

There’s already a fuel cell car out. I think it’s Honda. That will totally disrupt battery technology. The energy density of batteries sucks compared to gas. A fuel cell can use gas with zero emissions. There’s no range anxiety. It’s superior technology. I worked in EV and hybrid cars years ago. We all knew EV was a dead end, and it’d take fuel cell for widespread adoption.

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