Plus a fun clip of Josh Brown (age 44) telling his generation why they should not be rooting for all-time highs.
"All we're doing," he says, "is taking boomers out of their stocks at the best price possible.
Cue CNBC's "Jim Cramer says own Apple, don't trade it" which aired Thursday: (Skip the first two minutes. The fun starts at 2:10.)
My take: As a boomer, I sometimes have to be reminded that young investors are never going to get a chance to buy Apple at $9 a share, like some of the regulars at the bar.
Why Apple’s Shares Aren’t Appealing
Morningstar’s analyst says competition and short product cycles limit the company’s advantage.
https://www.morningstar.com/articles/1070948/why-apples-shares-arent-appealing
Share splits are good and bad, in my thinking. While they literally are like changing a $20 for four $5’s, they do make the stock price more accessible to folks who are more risk-averse and/or have little spare funds for investing. I.e., it’s more egalitarian.
But a smaller stock price also tends to lubricate options media manipulations, IMHO. I doubt we see much options manipulation going on with Berkshire Hathaway….
OTOH, the continuation of options manipulation is one of the biggest reasons Apple has been able to salt away all that horribly undervalued APPL over many years….
I respect but don’t agree with your opinion. Let’s leave it at that.
Investor sentiment determines how an equity moves, not options.
You folks need to read what I say more carefully, which was, very specifically; “options media manipulations”. Or maybe I should have said more specifically “options-RELATED media manipulations”.
I am NOT saying that options themselves are the source of manipulation. I don’t have a problem with options.
Let me repeat that: I don’t have a problem with options.
That said, there’s a clear relationship between the media and options which is, in a word, unhealthy. Jim Cramer himself famously “outed” the practice in front of Jon Stewart years ago. And we saw that impact up close and personal not that long ago when a trash story thumped AAPL about so-called supplier cutbacks.
IMHO, there is a special vulnerability that options, and especially short term options, create that longer term investment approaches avoid. Because a huge percentage of AAPL trades are now options trades (and even more so when volume is low, as it has been of late), crap stories can have an outsized impact on stock prices in general and AAPL in particular.
IMHO, this shouldn’t even be subject to disagreement.
If one had bought 1 $656 AAPL share just before the 7:1 split on May 31, the basis for that share would now be $23.40 now and the invested value of the 28 shares to $18,368, exclusive of dividends. So plenty of people who bought shares during the run from 2010-2014 have a basis below $20, some way below. So plenty of millennials and Gen X are in this ownership population (it was only 12 years ago and later).
If someone bought 1 AAPL share today at $175, AAPL would have to split 4:1 and 4:1 again to bring these shares down to about $11/share and the invested value to $2800. Could it happen again? Seeing as Apple decided to split 4:1 August 2020 and shares then were ~$500, if we have “decent” returns of 33%/year (today’s YTD 2021 returns) annual share appreciation from today, we could see another split in about 3 years, circa 2024-2025 when shares hit $400+. Of course, if Apple were to announce or successfully introduce a new and profitable product or service or market (what might that be???) then share appreciation would move up smartly more quickly.
My SWAG guess is that today’s Millenial/Gen Y, Gen Z and Gen Alpha $175 AAPL share buyers will see their basis drop to under $11 within 10 years with two 4:1 splits by sometime in 2032. Hopefully we will all be here to congratulate these now newbies, and future AAPL 3.0 veterans.