Apple Inc. (AAPL)

[bimetalaupt]

Mar 5, 2012 12:42:56 GMT -5 rovo said:

Mar 5, 2012 12:34:28 GMT -5 usaone said:

Wasnt me Rovo.

I was done selling by 1030. ;D

$$$$$$

Oh sure. I'm going to blame you anyway.

rovo,
You do know that dividends decrease the current value of AAPL in the DCF Model..TAXES!! and REDUCED growth in the model..

Just a thought..
BiMetalAuPt

PER EXPERT 50/50 Reduces it from $2440 to $1181...

[usaone]

I agree Bruce!!!

BUT Apple has been blowing away projections lately. I would say that model may be a little too bearish.

They may have quite a bit more money on their balance sheet in the future than projected.

[rovo]

Mar 20, 2012 20:22:49 GMT -5 usaone said:

A good couple weeks all the way around Rovo.

I've been having an exceptionally good year but I am waiting for the worm to turn.

You do know that dividends decrease the current value of AAPL in the DCF Model..TAXES!! and REDUCED growth in the model..
PER EXPERT 50/50 Reduces it from $2440 to $1181...

I would think any use of the cash would decrease the value per DCF but the 50% reduction you state seems a bit drastic to me. I am familiar with DCF but I do not know how it is calculated. A little insight would be helpful.

[usaone]

www.wallstreetprep.com/extrafiles/sampledownloads/DCF.pdf

My opinion...about a 20% drop.

[rovo]

FWIW the VIX on AAPL is declining rapidly and it should bring the premium on the options down also. I have two AAPL Call options I'm trying to buy into this week. One has to make hay while the sun is shining. ;D

[Aman A.K.A. Ahamburger]

Now your talking, like a farmer, Rovo.. ;D I'm stunned at the amount of Ipad3's that have been sold.

[Deleted]

What happened to Apple this morning? Just saw a headline that the trading was halted for some time.

[rovo]

There was an "oops" at the BATS exchange. BATS was trying to go public today with its IPO. I think they got too excited and screwed up. ;D

In Friday trading Apple shares were briefly halted because of the Bats snafu, but are now trading at $596.58, a fall of less than 1% on the day. A trade of 100 shares on Bats exchanges caused Apple's stock to fall nearly 10% to $542.80, according to Bloomberg data, which shows that the trade has since been cancelled.

www.thestreet.com/story/11468126/1/bats-global-flash-crashes-on-ipo.html?puc=msn&cm_ven=msn

[bimetalaupt]

Mar 20, 2012 22:19:42 GMT -5 rovo said:

Mar 20, 2012 20:22:49 GMT -5 usaone said:

A good couple weeks all the way around Rovo.

I've been having an exceptionally good year but I am waiting for the worm to turn.

You do know that dividends decrease the current value of AAPL in the DCF Model..TAXES!! and REDUCED growth in the model..
PER EXPERT 50/50 Reduces it from $2440 to $1181...

I would think any use of the cash would decrease the value per DCF but the 50% reduction you state seems a bit drastic to me. I am familiar with DCF but I do not know how it is calculated. A little insight would be helpful.

rovo
This reduced the growth matrix from 25% to 19% or 15%.. but 1181 is still above the 1,000 Waz was quoted to have said.

Just a thought,
Bruce

[rovo]

AAPL blew thru the previous 52-week high and is now trading at about $614. ;D

I was trying to get into some option plays in AAPL but they have run away from me to the up-side. Oh well, there will always be other opportunities going forward.

[bimetalaupt]

Mar 27, 2012 9:20:33 GMT -5 rovo said:

AAPL blew thru the previous 52-week high and is now trading at about $614. ;D

I was trying to get into some option plays in AAPL but they have run away from me to the up-side. Oh well, there will always be other opportunities going forward.

Rovo,
Give me a brake.. two years from now and it is on the way to $1181.00 you will not see that move on the chart..
on the other hand.. talking about Discounted Cash flow.. The tax change from 15% to 43.4% on dividends will reduce the Intrinsic Stock Value (ISV).. But that was calculated into the change !!!! You asked about why the change was so great.. I forgot the TAX INCREASE..If they did not pay a dividend this would not have effected the ISV.

Bruce

[TD2K]

Rovo, with Apple trending down, got a target price in mind to pick up more or are you still looking to set up another option play?

[rovo]

I don't know how low AAPL will go as there is no particular reason for the decline. I do have an order in to buy another 100 shares at $583.10 but I don't think it will go that low. I also have orders in on option plays.

The decline could be because of the Foxconn agreement in China or it could just be the quarter end re-balancing of the funds or it could be something else of which I have no knowledge.

ETA: If AAPL soars on Monday, then we can chalk up the decline to re-balancing.

[Aman A.K.A. Ahamburger]

I think your on the money rovo. The Foxconn new was a blow because that is higher wages and more money spent on better factories China, which I think is great. Right now thought they are raking in the dough so it's still got legs... ;D

[TD2K]

Up $14 so far today, nearly $614.

[rovo]

FWIW the comment in post #73 about re-balancing was suggested to me by poster 2kids10horses. He appears to be dead-on with this thought.

[TD2K]

I should have snagged some more last Friday.

[TD2K]

Up another $10 today so far.

[rovo]

I might have just made a bad play but it is too early to tell. I bought another batch of Call options on AAPL.

20 Contracts .... AAPL May 19 2012 $630.0 Call @ $38.25

[TD2K]

So that costs you $765?

How do you price/evaluate these if you think it's worth a shot?

[rovo]

So that costs you $765?

Well not exactly but the total cost isn't important. Percentages are more important.

How do you price/evaluate these if you think it's worth a shot?

Since it is a short term play the only important item is where will the stock price be on or before expiration of the option. There are formulas for the appropriate price at any given time but I just assume the market is efficient and the Bid / Ask is appropriate for the stock price, volatility, time till expiration, etc.

The play appears to be a very bad move since the stock is well below where it was when I bought the option. Actually I was trying to lower my bid price as I saw a stock price drop shaping up but the order executed while I was typing in a new lower price. Sometimes bad stuff happens.

The option currently has a "last" transaction at $32.00 vs. my buy price of $38.25. So I am currently losing 16% if I was to sell them now. AAPL closed today at $626.20.

I picked the May 19th option because I wanted the expiration after the April 24 earnings announcement. The $630 option was chosen because it was in the money when I bought it. The option price was changing about $0.50 for every $1 of stock price change.

AAPL had some bad news delivered today as the Dept. of Justice has filed suit against them. This action did not help the stock price at all today as AAPL closed down in an up-market day.

These things are very high risk plays but I enjoy the heck out of them. A little excitement in an otherwise dull portfolio. ;D

I like to use AAPL for the option plays since I own a few shares of AAPL and I watch it very close. Watch it long enough and you can predict with fair certainty where it will be in a week or so. Except you can never predict a black swan event like the DOJ suit.

[rovo]

The options I noted a few posts back are now trading at $22.75. This play is currently looking very bad.

[Deleted]

Apr 13, 2012 11:04:19 GMT -5 rovo said:

The options I noted a few posts back are now trading at $22.75. This play is currently looking very bad.

you are just reducing your tax liability.

[rovo]

Apr 13, 2012 11:05:49 GMT -5 ArchietheDragon said:

Apr 13, 2012 11:04:19 GMT -5 rovo said:

The options I noted a few posts back are now trading at $22.75. This play is currently looking very bad.

you are just reducing your tax liability.

No tax liability for 2011 and none expected for 2012. ;D

[rovo]

The option play is still looking very, very weak. The options are now worth 40% of what I paid for them. Expressed another way, I am down 60% in this play. I have orders in to pick up a few more contracts at $10ish. I'm still not writing off this play. For sure I entered at a bad buy-in point but it may still be profitable. <<maybe >>

[Aman A.K.A. Ahamburger]

The snap back today is making headlines!

[usaone]

I think Apple has more downside. Hope I'm wrong.

[Deleted]

snap back again. Dayum!


Rovo, are you still holding onto your options?

[rovo]

Yup, but they may not make any money for me. I'm now holding 40 contracts of the same option and AAPL has to go above $630 by quite a bit in order for me to make anything. At this point I would settle for a break-even on this play but I'll hold out for a while.

40 contracts of AAPL May 19 2012 630.0 Call at an average price of $24.20. Last price at the close was $4.47.

[usaone]

Big up day tomorrow for Apple. Then the pull back will continue I think.

I'll be selling more Apple tomorrow late morning.