Scott PearcyParticipantAugust 10, 2020 at 7:25 AMPost count: 298
Apple has announced a 4-1 stock split for those holding shares as of 24 August….Sean HymanKeymasterAugust 10, 2020 at 8:20 AMPost count: 3390
Yeah, splits mean nothing. Splits are taking the same pizza and cutting the same sized pizza into more pieces. It does nothing to create value.
And for those who think splits are needed for a stock to continue to go up, I’d say…look to Berkshire Hathaway’s A shares (BRKA) that have never split, ever and they trade for over $300,000 per share and have still continued to grow over time.
What’s needed to cause higher share prices in the future is for the company to grow larger through increasing earnings over time.
Apple typically trades at a cheap P/E of around 10. Right now, it’s trailing P/E is over 30 and it’s forward P/E is almost 30. So, the stock price has gotten ahead of itself and its in a bubble. If anything, the increase of shares in the stock split could even help the bubble to pop, if somethhing didn’t cause it sooner.Scott PearcyParticipantAugust 10, 2020 at 8:31 AMPost count: 298
I agree…Most folks don’t realize that splits are revenue neutral. I owned AAPL several years ago, prior to subscribing to any newsletters, and held it for a long while…Finally sold my shares @ $70 per share……I shudder to think what my position would be worth if I knew then what I know now….Sean HymanKeymasterAugust 10, 2020 at 8:47 AMPost count: 3390
Yep, but no one knows when or if a stock will ever get into a bubble or not, ahead of time. And when they crash, they’re ugly.
We were in Apple I think 3 times through the years and did well on it, with low risks, when no one wanted it. It was some of our bigger returns we ever had back then. Today “everyone” wants it…and its grossly overdone.
And for ones you feel like you miss some on…you hit others (like SLV) that have crazy returns and others that have outsized gains in unusually short periods of time, like EWZ, EWI, CAH (twice), GILD, etc. And yet, we did it all with far less risk.Scott PearcyParticipantAugust 10, 2020 at 8:51 AMPost count: 298
You are correct…..We have had a nice run of high returns with minimal risks in a short period of time…Sean HymanKeymasterAugust 10, 2020 at 9:01 AMPost count: 3390
So I’d rather get our returns with lower overall risks than to take on high risks as a stock turns into a momentum trade with potentially a big crash ahead of it. I like avoiding crashes whenever possible.FusionDudeParticipantAugust 11, 2020 at 2:08 AMPost count: 144
In my early investing days, I did all the wrong things. I bought what I knew (AAPL). I bought and held. The one good thing I did was inadvertently average down. When my AAPL went down, I said “I still believe in the stock” and bought some more. Then I forgot about it.
One day I noticed that AAPL was trading at $500. With splits over the years, my basis was about $9. Even a blind squirrel finds a nut, now and then.Scott PearcyParticipantAugust 11, 2020 at 6:52 AMPost count: 298
I think my initial purchase price was around $20-$25 a share….Sean HymanKeymasterAugust 11, 2020 at 9:20 AMPost count: 3390
Yep, true. Anyone can get lucky on one here or there. Agreed. Glad you did well on it.
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