And maybe $100 or less.
C'mon guys, where's your critical thinking skills.
The lapping up of the Apple lovefest, fanboi hyperbolic chart mavens is disgusting.
And, if you stick with it too long, ruinous to your portfolio.
Let's just be simple about it: Nearly every hyperbolic chart like this ends in a disaster.
In fact, I challenge you find those that have not.
Then there are the amusing predicates (EPS growth estimates) both for the next quarter, this year, and next year. This year, 59%. Next year, 13.7%. That doesn't quite fit with a near-doubling of the stock price does it?
The $1,000 call is a call for a trillion dollar company -- by next year. Something like 2% of GLOBAL GDP and close to 7% of US GDP? Really? You believe that? If so, you're smoking something.
This is a firm with an operating margin of 34% with a huge percentage of it from hardware. What's their P/E if that gets cut in half?
You think it won't? Oh yes it will. This sort of operating margin always attracts competition. It is the reason that our operating margin at MCSNet -- a nearly-pure services business -- was one of the most-coveted and secret numbers we had. Nobody heard that number in general circulation because it would have immediately drawn people to try to figure out how we were doing it, to be immediately followed by someone forcing us to lower prices in order to keep customers, thereby destroying it.
There is no way to prevent this from happening folks, especially as you grow larger, except through attempted monopoly control of a market or other unlawful acts. If you do not engage in those acts then someone will be willing to do what you do at half your margin and the entire premise of your alleged stock price disappears. And if you do engage in them then you will eventually be stopped, as someone will sue or prosecute.
Oh sure, it takes a while, especially at this scale, for competitors to figure it out and a few of them will try and "miss" before you get tagged. That's to be expected; instant success is not likely in a situation like this.
But ultimate success is assured as the prize is too big and the idea of a company selling at 4.5 times sales and more than 6 times book value while turning a 34% operating margin is too juicy to resist.
They're going to get attacked and will ultimately lose.
So how do you get to $1,000 first? You try to suck people in. You blow bubbles. You ignore the law of large numbers and the fact that nobody with resources sits back and watches a competitor sell hardware at a 34% operating margin without trying to eat their lunch, breakfast and dinner. You downplay or outright dismiss these facts and point to a stock chart that has gone hyperbolic and claim that "it's different this time!" And you use hot money and leverage to do it; as price rises you simply buy more using your freed-up margin doubling into the gains.
This is all good and wonderful right?
No it's not.
It never is.
Mark this post folks. Hyperbolic charts look great and are exhilarating, but until you sell the money is not yours and when the selling starts what went up will come down twice as fast -- or faster.
When you trade on buzz it's because you're drunk. When you double into levered positions and the entire market is one gigantic levered position right now you're really asking for it as when, not if, the margin selling starts it doesn't stop because the leverage multiplies losses exactly as it does (paper) gains and eventually the margin clerk wants your house.
This stock is going to come back to earth and when it does the entire market will come apart with it.
Tell me why I have internals in the market that look like this right now on the Nasdaq 100?
Capital flows positive on a 34/65 day with down volume 3:1 over up volume? People buying puts like no tomorrow on the advancers, and yet who are the advancers? Apple, primarily, and when one looks at market cap and thus capital flow, almost-exclusively!
Why does the chart of the market now, and Apple in particular:
.....look like this -- and does anyone remember what came next?
This is a massive, outrageous bubble. Trees do not grow to the sky.
You're not dumb enough to get sucked in again, right?
Or are you?
"Sold to you."
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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