Comments on: Let’s Look At Apple http://www.fwallstreet.com/article/79-lets-look-at-apple/ Value Investing Blog Mon, 16 May 2011 10:55:06 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Joe Ponzio http://www.fwallstreet.com/article/79-lets-look-at-apple/#comment-1640 Joe Ponzio Mon, 17 Mar 2008 15:18:58 +0000 http://www.fwallstreet.com/article/79-lets-look-at-apple#comment-1640 Richard, In 1998, Dell, Microsoft, Nokia, and Motorola had combined revenues of $71 billion, compared to $24 billion for Apple last year. Richard,

In 1998, Dell, Microsoft, Nokia, and Motorola had combined revenues of $71 billion, compared to $24 billion for Apple last year.

]]> By: Richard http://www.fwallstreet.com/article/79-lets-look-at-apple/#comment-1633 Richard Sat, 15 Mar 2008 18:34:03 +0000 http://www.fwallstreet.com/article/79-lets-look-at-apple#comment-1633 Question! Does Apple currently generate as much much revenue as Motorola, Nokia, Microsoft and Dell did 10 years ago. I don't know the answer to that, but it may be surprising. Sometimes the sheer magnitude of numbers can make our initial calculations seem obviously flawed. It's remarkable what several years of perspective can do. Question!

Does Apple currently generate as much much revenue as Motorola, Nokia, Microsoft and Dell did 10 years ago. I don’t know the answer to that, but it may be surprising.

Sometimes the sheer magnitude of numbers can make our initial calculations seem obviously flawed.

It’s remarkable what several years of perspective can do.

]]> By: madmilker http://www.fwallstreet.com/article/79-lets-look-at-apple/#comment-694 madmilker Sat, 03 Nov 2007 09:27:18 +0000 http://www.fwallstreet.com/article/79-lets-look-at-apple#comment-694 The best thing about the future is that it only comes one day at a time....and tomorrow i have no need to buy an Apple... ...therefore by not having one will not have to eat one! The best thing about the future is that it only comes one day at a time….and tomorrow i have no need to buy an Apple… …therefore by not having one will not have to eat one!

]]> By: Joe Ponzio http://www.fwallstreet.com/article/79-lets-look-at-apple/#comment-685 Joe Ponzio Fri, 02 Nov 2007 04:31:21 +0000 http://www.fwallstreet.com/article/79-lets-look-at-apple#comment-685 Cordura1: The $500 million negative cash was the total for both years - not $500 million for each. Bruno - got your e-mail. I'll get back to you today. Cordura1: The $500 million negative cash was the total for both years – not $500 million for each.

Bruno – got your e-mail. I’ll get back to you today.

]]> By: Bruno Miglio http://www.fwallstreet.com/article/79-lets-look-at-apple/#comment-668 Bruno Miglio Tue, 30 Oct 2007 14:37:37 +0000 http://www.fwallstreet.com/article/79-lets-look-at-apple#comment-668 Could you please indicate which value of the current FCF you use to arrive to a future cash of 126.7 Billion? If I take your assumptions for growth rates, discount rate and a current FCF of 3.6 Billions, the sum of the future cash flows I come up with by integrating the curves plus the cash from ther balance sheet gives me an intrinsic value of Apple in the range of 300$. My calculations use the formula A/(A-1)*((A^N)-1) and for the Perpetuity Period the formula : (A(1) *A(2) *A(3)*PGF) / (DR-PGR) where: A=(1+Growth rate) / (1+discount rate N= Number of years for each period PGF=(1+growth rate for the Perpetuity period) DR= Discount Rate PGR = growth rate of Perpetuity period Thank you, best regards, Bruno Could you please indicate which value of the current FCF you use to arrive to a future cash of 126.7 Billion?

If I take your assumptions for growth rates, discount rate and a current FCF of 3.6 Billions, the sum of the future cash flows I come up with by integrating the curves plus the cash from ther balance sheet gives me an intrinsic value of Apple in the range of 300$.

My calculations use the formula A/(A-1)*((A^N)-1) and for the Perpetuity Period the formula : (A(1) *A(2) *A(3)*PGF) / (DR-PGR) where:

A=(1+Growth rate) / (1+discount rate

N= Number of years for each period

PGF=(1+growth rate for the Perpetuity period)

DR= Discount Rate

PGR = growth rate of Perpetuity period

Thank you,

best regards, Bruno

]]> By: cordura21 http://www.fwallstreet.com/article/79-lets-look-at-apple/#comment-661 cordura21 Mon, 29 Oct 2007 04:33:12 +0000 http://www.fwallstreet.com/article/79-lets-look-at-apple#comment-661 sorry for being to dumb, but where exactly in the Morningstar pages are the $500 million number? Is is a sum of two (if so can you tell which two)? Regards, Cord sorry for being to dumb, but where exactly in the Morningstar pages are the $500 million number? Is is a sum of two (if so can you tell which two)?

Regards, Cord

]]> By: Joe Ponzio http://www.fwallstreet.com/article/79-lets-look-at-apple/#comment-623 Joe Ponzio Thu, 25 Oct 2007 05:22:57 +0000 http://www.fwallstreet.com/article/79-lets-look-at-apple#comment-623 Brian: The $500 million negative cash was the total for both years - not $500 million for each. Dave & Sanjay: I couldn't agree more. Brian: The $500 million negative cash was the total for both years – not $500 million for each.

Dave & Sanjay: I couldn’t agree more.

]]> By: Dave http://www.fwallstreet.com/article/79-lets-look-at-apple/#comment-621 Dave Wed, 24 Oct 2007 09:22:30 +0000 http://www.fwallstreet.com/article/79-lets-look-at-apple#comment-621 >It almost seems that the fortunes of the company revolve around 1 personality.. I agree totally with Sanjay. To paraphrase Buffet - buy a business that a fool can run, because one day a fool might be running it. That statement in and of itself may explain why Buffet stays away from Tech. Apple tanked when Jobs left. It is back strong now, but unlike BNSF (Buffet's latest acquisition) where the rails will still be choo choo-ing in 20 yrs, no one can predict what Apple will look like in even 5 years! >It almost seems that the fortunes of the company revolve around 1 personality..

I agree totally with Sanjay. To paraphrase Buffet – buy a business that a fool can run, because one day a fool might be running it. That statement in and of itself may explain why Buffet stays away from Tech. Apple tanked when Jobs left. It is back strong now, but unlike BNSF (Buffet’s latest acquisition) where the rails will still be choo choo-ing in 20 yrs, no one can predict what Apple will look like in even 5 years!

]]> By: Dave http://www.fwallstreet.com/article/79-lets-look-at-apple/#comment-617 Dave Wed, 24 Oct 2007 05:05:21 +0000 http://www.fwallstreet.com/article/79-lets-look-at-apple#comment-617 From a business perspective I'm still not sold on the Iphone redefining the cell phone market. For starters, it seems to me the exclusive arrangement with ATT will open up a new market as there are 3-4 other big players in the wireless business (sprint, verizon, etc). Just like in the mid 1980s, the mac was way ahead of it's time but Microsoft won because open would not open up the Mac for other providers. History could repeat itself.. From a business perspective I’m still not sold on the Iphone redefining the cell phone market. For starters, it seems to me the exclusive arrangement with ATT will open up a new market as there are 3-4 other big players in the wireless business (sprint, verizon, etc). Just like in the mid 1980s, the mac was way ahead of it’s time but Microsoft won because open would not open up the Mac for other providers. History could repeat itself..

]]> By: Sanjay Shetty http://www.fwallstreet.com/article/79-lets-look-at-apple/#comment-616 Sanjay Shetty Wed, 24 Oct 2007 03:40:00 +0000 http://www.fwallstreet.com/article/79-lets-look-at-apple#comment-616 Hey Joe, Coincidence! that you're discussing APPLE, I just mentioned about it yesterday in my blog post. http://indiainvestor.wordpress.com/2007/10/23/the-numbers-look-good-what-next/ My level of comfort with the company isn't that great: I recollect when Steve Jobs, left the company, their fortunes turned, when he came back, the company started to grow anew again. It almost seems that the fortunes of the company revolve around 1 personality... when he goes the company well ambles around. That fact doesn't boost my confidence when I look at it, from the viewpoint, of what will happen in the future. This is very different from other companies like Berkshire or J&J, GE or even a Microsoft where the original brilliant businessmen even if they aren't around the company would pull ahead on it's own steam... well I'm sure quite a few might doubt about Microsoft :-) but Steve been at the helm of affairs for a long time now, so lets not turn the conversation into that direction. Secondly, it's in a business, where the competition is not just loaded with tons of cash, but has greater market reach worldwide. Take the mobile market(with Nokia, Sony, innovators like HTC, etc.) or the pc/software market (with the Dell's, HP, Microsoft). So it's got a lot of big daddies to fight off, which have larger war chests and much more marketshare worldwide. I'm just not sure, how Apple would do 10 years down the line... So for me this is in the I love the products ...kind of company, however I'm not sure about the future. As Yoda would say "Unclear is the future. Always in motion is the future, but never in so much motion as presently." Especially in the mobile phone space, there is just too much happening in the industry... Regards, Sanjay Shetty I blog at: http://indiainvestor.wordpress.com Hey Joe,

Coincidence! that you’re discussing APPLE, I just mentioned about it yesterday in my blog post. http://indiainvestor.wordpress.com/2007/10/23/the-numbers-look-good-what-next/

My level of comfort with the company isn’t that great: I recollect when Steve Jobs, left the company, their fortunes turned, when he came back, the company started to grow anew again.

It almost seems that the fortunes of the company revolve around 1 personality… when he goes the company well ambles around. That fact doesn’t boost my confidence when I look at it, from the viewpoint, of what will happen in the future. This is very different from other companies like Berkshire or J&J, GE or even a Microsoft where the original brilliant businessmen even if they aren’t around the company would pull ahead on it’s own steam… well I’m sure quite a few might doubt about Microsoft :-) but Steve been at the helm of affairs for a long time now, so lets not turn the conversation into that direction.

Secondly, it’s in a business, where the competition is not just loaded with tons of cash, but has greater market reach worldwide. Take the mobile market(with Nokia, Sony, innovators like HTC, etc.) or the pc/software market (with the Dell’s, HP, Microsoft). So it’s got a lot of big daddies to fight off, which have larger war chests and much more marketshare worldwide.

I’m just not sure, how Apple would do 10 years down the line… So for me this is in the I love the products …kind of company, however I’m not sure about the future.

As Yoda would say “Unclear is the future. Always in motion is the future, but never in so much motion as presently.” Especially in the mobile phone space, there is just too much happening in the industry…

Regards,

Sanjay Shetty

I blog at: http://indiainvestor.wordpress.com

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