Three reasons to sell Apple - MoneyWeek Investment Tutorials

[@csiri6758]

Guys, keep in mind the video was published in 2012 Oct 26th. In the following 6 months Apple was falling from 86 to 56 per share. So, at it's time, given the information available, this analysis was spot on.

[@studmalexy]

just goes to show you need to be in it for the long term

[@Paltibenlaish]

why we haven't bought on 56 usd :(!

[@danielb8982]

Yeah, but when he says that lower valuations are a reason to sell, that just does not make sense

[@David-ud9ju]

Yeah, but this was ovious because it had dropped by $10 a share in a month. All Tim did in this video was try and find a reason for what he was observing. If he had said this during the preceeding 6 months when Apple's share price was rising, it would be noteworthy, but he just saw that Apple's price was decreasing rapidly and then went searching for a reason why - you're not going to be successful in the stock market if you're always reacting. You have to be proactive - you have to know a stock will fall while it's still going up.

[@AmatriceBand]

@@David-ud9ju true that. and it's bloody hard

[@smurfekidsa]

Tim, I dont understand why you say the falling p/e ratio and the other falling ratios is a bad sign? Because the stock is actually getting cheaper! and its not reason why it should. The financial number are still strong. I think you have it wrong. When people ecpect the stock to do bad is not a reason not to buy. Thats what create a bargain opportunity.

[@lincolnc.cruger4325]

@Jan Fredrik

[@jackhill888]

I agree with you on this. A p/e of 14 for me would be a very good sign. Although times have changed since this video I guess.

[@MoneyWeekVideos]

Hi. I am just giving my personal opinion on Apple based on the ratios. I neither own Apple shares not do I benefit personally if someone acts on my opinion. MW magazine is unregulated (as agreed by the FSA) as is the MW website. So in short, yes!

[@xanderalllan]

Great video Tim but another way of looking at this figures is that Apple is a great company and - for the first time in years you can buy it at a reasonable price!

[@sivabalanjayakrishnan928]

Hi Tim, A stock that has a low P/E ratio is generally seen as a bargain. But a stock that has a P/E ratio that is trending lower year after year like apple is seen as something bad. Do you agree to the above statement Tim?

[@n8style]

i've got a bit of savings squirreled away, can you tell me how i can short half a share please?

[@_moore]

Hi Tim, why wouldn't you consider dividend yield from a company like Apple but you would for Vodaphone? They are both tech companies. Is it because Apple's success is based on its ability to innovate, where as Vodafone is kind of integral to the way people communicate?

[@daddyregMia]

Good Call ,I have learned lot from watching your videos. Thank you

[@RenSylvain23]

Keep up the good work!

[@Commando303X]

I think this is a terrific video on how to contextualize and apply various figures, but, I disagree with its actual applications: To me, based just on these data, and on nothing else, Apple looks to be a company doing very well, which is losing market-favor, and thus becoming a more attractive option to purchase - that is, its valuation is decreasing, while its strength is rising.

[@thebrosbeanz]

Hi Tim, In the P/E video you talk about how a lower P/E is a bargain because your, generally speaking, getting your money back quicker. So why is a decreasing P/E ratio bad, aren't you just getting your money back even quicker? Thanks.

[@thebrosbeanz]

That's exactly what I was thinking. In the P/E video you (Tim) talk about how a lower P/E is a bargain because your, generally speaking, getting your money back quicker. So why is a decreasing P/E ratio bad, aren't you just getting your money back even quicker? Thanks.

[@PezCuckow]

Great video, but I wish you would plug the other videos/email less often. Once you've said it once I've got the picture!

[@tmayne220]

You have access to a Bloomberg terminal! I am super jealous...

[@AirelonTrading]

One thing I didnt see that sort of surprised me since AAPL has been a value story this entire time and there is a valuation theme here Intrinsic Value on a 5 yr basis ... their intrinsic value is at about $3,000 a share + Per Graham w/ their EPS ... it can negate the P/E ratio. Thats obviously not a target, but since its sufficiently undervalued w/ zero debt. Especially since P/Es are in a risk off appetite & are understood with current multples EBITDA ?? That works best for distressed ...

[@jetliigor]

I thought the lower the P/E the better value you're paying for your money? Why is all of a sudden a lower P/E hurting Apple? Are growth tech stocks supposed to have a high P/E only?

[@rotagbhd]

If you ignored this guy in 2012 with Facebook and Apple, good for you because you'd be rolling in the dough today! 5 years later I see this guy had said Facebook was a good example why to avoid IPOs, their first year was mostly sideways but since then up 500%. Now this video looks off the nose as well because Apple is the most valuable company in the world right now and about to be the first Trillion dollar company with projections of room to grow, and Warren Buffet just bought 25 million more shares lol

[@gc7304]

Thanks Tim

[@jnrolf]

Saved Me!!! Thanks...

[@jamesdarnell8568]

No. He cost you a lot of money because he was afraid.

[@dailyforman]

save your time, skip to 4:15

[@AmatriceBand]

Looking back 8 years later. at the time the price was around $90 went down to $60 July 2013 but kept rising afterwards.took until June 2014 to get back to $90 mark. If someone shorted it and sold it a year later, made a mint. or sold it and invested in anything growing a bit higher than inflation for 1.5 year was a winner.

[@mm-zw1zc]

This is a video is a good education on what NOT to do. The company had excellent fundamentals at the time, and the analysis was the price was relatively LOW, but somehow that is 'bad.' The analysis presumes that the market somehow had information driving the company price down appropriately. That's crazy! The fact that the price is low relative to earnings or FCF is a sign that the market is not acting rationally. The was the BEST time to buy. As evidenced 7 years later.

[@jamesdarnell8568]

Tim believes in Modern Portfolio Theory. MPT believes that the market price takes into account all known factors and that the market is always efficient.

[@danielracovitan9779]

Apple stock was falling for another 7 months straight when he did this video; so he was spot on

[@Tuxiii808]

Thanks

[@DoYerBest]

Ok, u talked me into it, I'd like to sell-short 1 share of AAPL, please.

[@AmazingNatureTV]

indeed great call to sell apple you just said it the right moment!

[@jamesdarnell8568]

Hahahaha.

[@rodctenis]

And you were right!

[@samuelspencer5047]

At 5:40 - other retailers i.e Tesco and Sainsbury's would be happy with operating margin of 6% M&S will be pushing to 9%. Apple's operating margin of 31% in my opinion serves as evidence that they are exorbitantly charging their customers. I guess with this level of operating margin in comparison to alternative retailers you can guess the fairness of Apple's business practices to their consumers, suppliers, customers and employees.

[@impactodelsurenterprise2440]

Purely looking at fundamental alone is not enough to decide whether to buy or sell a stocks.

[@williamhensley8322]

If you bought at the extreme dip back in 2013, you would have gotten 28% returns but that's probably not realistic to have guessed precisely. Regardless, 22% returns is good and therefore looking in hindsight, selling apple would have been dumb, unless you had a reason other than the fact the stock was falling. If you dollar cost averaged, you could have gotten maybe the average of 22 and 28.

[@killoreo]

Ok looking in hindsite , his advice on stocks is not very advisable.

[@danielracovitan9779]

at the time of the video the Apple stock was continually falling for some solid 7 months so yeah, he was spot on; as of october 2012 Apple was a sell

[@satrianachandra]

I believe he was joking on this. All those beuatiful ratios, added with cheaper PE historically, is a clear BUY

[@studentsphonescouk]

Have you seen Tim's video on P/E ratios? - /watch?v=LDNU5MKxki8 Funnily enough the best explanation I've ever come across was Tim's email in the MoneyWeek Basics series. There are so many different factors to look at when considering the P/E ratio that it's hard to explain in 500 characters. It's definitely not a number that should be looked at in isolation. In this case it's probably more of a microeconomic issue ie investors losing confidence in the company itself, not just future demand.

[@szaki]

Jaaaa!!!!!!! Apple close today at $536, when it was over $700 over a month ago.

[@5kplamse]

listening to this video i have to turn up the volume to 80%. Man speak up !!!

[@sivabalanjayakrishnan928]

Thank you for the attempt. Well, i sort of get what you mean. Can we put it this way, assume we're just after a financial downturn and we find many good companies with low PE ratios. Now I believe that would then be a genuine bargain (keeping all other factors constant). Now in the case of apple there seems to be no negative external macro-economic impacts and yet it's posting falling PE numbers which does mean a sign of caution. Agree?

[@cakestalker]

Should have bought Apple shares back in the late 90's when Apple was nearing bankruptcy.

[@szaki]

Netflix up big time $145? some 40% up in a day!. P/E ratio 125 Price could go $200 What's the story!

[@rotagbhd]

Netflix is near $350 now lol

[@dhhsncnd6107]

I just saw this now, at the point apple has crashed.... Good call!

[@MoneyWeekVideos]

Yeah fair enough - this is the first week I've properly mentioned the free emails so may have over egged the pudding a little! Tim.

[@dalv11]

Are u a CTA Tim? Are you allowed to give trading advice without a disclaimer?

[@LUXESTATEX]

tim apple is trillion dollar now

[@williamhensley8322]

year over year, from the date of this video, you would have made 22% returns, even if you didn't sell anything.

[@MrArcelton]

Why is this even relevant 7 years later

[@danielracovitan9779]

it was relevant and correct at that time, as Apple was falling

[@chowsquid]

Since the posting of this video AAPL has increased 43%. I have issued with your "Bad" section. The 3 parts of the "Bad" section was basically just one thing, the market is not respecting AAPL period. Your "Bad" section assumes the market is right. Rather it's just a reflection of what the market feels. The market can be wrong. That's how you get undervalued stocks. Using your logic for the "Bad section, there is no such thing as an undervalued stock as all stocks deserve the valuation they get. To summarize: You had a gut feeling led on by the thumb commercial, then you tried to shape your assembled numbers to back up your gut.

[@jamesdarnell8568]

"Using your logic for the Bad Section, there is no such thing as an undervalued stock as all stocks deserve the valuation they get". Welcome to the wacky world of MPT. This is why university professors do not work on Wall Street; or when they occasionally try, they fail spectacularly.

[@ImmortalmageMedia]

I think I can answer that question for you. You use the P/E ratio to see if a company is undervalued or overvalued when compared to the market price. The higher your P/E ratio, the more earnings you are expecting Apple to earn. That's why the technology companies usually have a higher P/E ratio than other sectors. As you can see the 5 year trend, Apple's P/E ratio is dropping which means Apple's earnings are dropping! I hope this helped

[@studentsphonescouk]

If I may attempt to answer. Just because a stock is a 'bargain' doesn't mean that you should buy it. Cheap stocks are normally cheap for a reason i.e. a low p/e ratio often means that the market is not confident in the company's future prospects, and this is reflected in the price of the share. Hence, a falling P/E ratio normally means that more investors are becoming bearish about the stock, which is usually a bad sign. It may help to compare the P/E to the average in the sector.

[@leocriss6354]

And you were HORRIBLY wrong.

[@szaki]

AAPL = $450 today -Down big time

[@5688312]

18.12.18 LOL

[@robertlam18]

All these numbers are subject to interpretation.

[@MostCommentsAreFake-ud8by]

Ha ha ha ha

[@MrCheney22]

Looking back, this was a great call to sell Apple. But I can't help but think you're ratio analysis means nothing unless you compare it to other companies. Looking at ratios with no baseline or comparative companies is relatively meaningless. And a twelve month trailing P/E tells you a lot less than say the forward...and I'm not quite sure I follow your logic on the PEG. Cheers though for a nice vid

[@asdasdasdasd61932]

to me apple died when jobs died ...

[@David-ud9ju]

Yeah, but it didn't though did it?

[@bobbylockes]

been watching apple the last year. I said to my mates 2 weeks ago that I reckon its a short it was @ 660). I was proved right. But it is still a short @600? I think so. apple has loads of cash and the US government is printing 40 billion each month. Also If they buy their stock at these higher than ever prices then the management will be perceived as idiots. But christmas is coming and apple is releasing loads of new versions. So expect a bumpy short and margin calls imho.

[@n1co5]

*APPLE SHARES BELOW $500 IN PREMARKET, FIRST TIME SINCE FEBRUARY ...good call !!!

[@capehorn1159]

This did not age well.

[@danielracovitan9779]

at the time of the video the Apple stock was continually falling for some solid 7 months so yeah, he was spot on; as of October 2012 Apple was a sell

[@AirelonTrading]

Not sure if I'd say "the bull run is over" ... But if you've been short AAPL, congratulations. Great call