Computer stocks, or, how to loose 100 grand, quickly...

[Santilli]

Udaman is raving about Apple stock prices. I thought I'd bring up my experience with stocks.

Prior to 2000, I put some money in stocks, and, with the crash, pretty much lost it. My memories are:
Apple: 3 bucks a share, almost bankrupt. Maybe less. It was trading like a penny stock, and, no one wanted it.

MSFT: also a big drop, and, just stayed stable.

Here are my conclusions:
You are playing a game with a bunch of zillionaires, who, by dumping huge amounts of money into the stocks when they are depressed, then inflate the price of the stocks, only to dump them, and do it again with another stock. All it would take is a couple phone calls from a few Sheiks in the UAE, and Iran, and, any stock can have an elevated, look great stock price.

Also, don't forget Enron. Fake earning reports, fake reporting, ponsy schemes, buying gas pipe time, creating a shortage in collusion with PG&E officials, who just happened to close plants for 'repairs' at the time no gas is being shipped, etc.

In short: stock prices have NOTHING to do with the actual company.
You are playing a rich Monopoly game, using companies, not properties, and, if you don't have the billions, you are always going to be one step behind their moves.

So, Udaman: Please do not think that we are stupid enough to equate
Apple's stock price with their product quality, or a successful company. Often, all it takes for a company to collapse is some huge stock holder to pull his capital, i.e. sell all his stocks, deflate everyone's share prices, and the company goes down from there, due to lack of capital, or, employees leaving, since that wonderful retirement plan is now worth 100 dollars, instead of a million.

Moderators:
I realize this is off topic, but, I get sick of seeing off topic posts about stock prices...

 

[jtr1962]

I watched an episode of Kramer where he essentially said the same thing. The market right now is insane. In my opinion the only thing an average investor should touch are mutual funds. Individual stocks are too risky, especially considering that prices for many stocks are easily manipulated by a few large shareholders. It's like playing a game, only you not only don't know the rules, but the rules can change at any time.

 

[Mercutio]

"Loose" is the opposite of tight.
"Lose" is the opposite of win.

 

[ddrueding]

In the '90s I did Microsoft, now I go Google. Up 15%+ for the year.

 

[sechs]

Join the cult of Warren. BRK.a is a steal at $101,400.00, off 20% from its lows.

 

[ddrueding]

I was doing BRK.b for a while, but the GOOG was outperforming constantly. I also played with GE, but it's been hurting lately. I also got some good action with F and BAC when they were in the hole, doubled up quickly and GTFO

 

[sechs]

Next thing you know, you'll have three screens and check the stocks every few seconds....

 

[ddrueding]

I already have three screens, does that mean I'll need five? I only check on the stocks every 30 minutes or so when I'm in the office, and twice a day if I'm out.

 

[udaman]

Apple: 3 bucks a share, almost bankrupt. Maybe less. It was trading like a penny stock, and, no one wanted it.


So, Udaman: Please do not think that we are stupid enough to equate
Apple's stock price with their product quality, or a successful company. Often, all it takes for a company to collapse is some huge stock holder to pull his capital, i.e. sell all his stocks, deflate everyone's share prices, and the company goes down from there, due to lack of capital, or, employees leaving, since that wonderful retirement plan is now worth 100 dollars, instead of a million.

Wow, what an over simplification and clearly a rant by someone who doesn't want to look at the information available to anyone. "All it takes"? Sure, like that's going to happen? Fine, someone who is a major shareholder can drop out of Apple, and smart money will buy up those shares...which is what probably happened when it dropped to $80/share recently.

Huh? Well if you sit in the background and rant anti-Apple like Balmer...we'll yeah I can see your point (lol). Otherwise you're not in stocks as a well informed investor. Sure the price right *now* is over-inflated and could very well drop...in the short-term. But you have to be very sophisticated as in investor if you're buying for the short-term versus longer term. I don't see Apple stock as a great bargain now, it may go higher, but the gains to be made were went it hit a low of just under $80, which was caused when by large investors *fear* of under performing in a dismal economy. Those were the institutional buyers who did not look closely at how Apple had consistently been performing in a tough recession scenario.

Hey, they are fear mongerers, and they drove the price down...which would be good if you know the health of the company and good prospect of it making it through the tough times and being successful where others like Sony are down and maybe almost out. Yeah so you had your chance if you had enough money to play the game, on a lower risk, reliable tech stock. Now the price is just so high, only the high-rollers can afford to take the risk, though I seriously doubt you're going to see Apple stock drop like the financial giants, down into worthless amounts.

But you obviously only want to look in a disparaging way in this instance, rather the logical objective view of profitability, health of a company. Guess you didn't buy a iPod, iMac, iPhone...etc, etc. So now you have sour grapes, and are jealous of Apple's success, when (your preferred) the other big tech giants are floundering (maybe you lost a lot on them).

Not surprising your bitterness, you're not gaining, you've lost.

I wouldn't have bought Apple stock at it's low point before Jobs returned, the company was in danger of bankruptcy, no doubt about it.

So you had Apple stock that dropped to $3, is that what you're ranting about? And you sold it @$3? LOL, that stock is worth what >50x that currently.

Google stock, how could you know that initially it would be successful anymore than Yahoo? There's greater risk involved in playing the game with those types of company's when they were younger, and you'd be foolish to hold on to yahoo if it had a trend downwards. I don't see a *long-term* downward trend on Apple anytime soon. If I did, and I had bought $80/share a it's recent low, then I'd still have plenty of time to get out, not like it's going to have a huge drop back to $80/share in just a week or 2. And if it *did* that exactly just now, I'd buy *more* Apple stock, as in the long-term Apple's prospects are good.

Gold is usually what people invest in as a lower risk investment, but then it goes up and down too. So you buy @$950/oz and it drops to $600, ya just lost a bunch of money? So do you sell it all off? Don't you think in the long-term it will go back up to $950, and like the stock market, hit new highs?

No, building a successful business has greater potential for financial gain than playing the game of the stock market. But then there's also a great big risk of failure. Not too many *sure* investments out there, if they are, then the return is almost always very small.

How many *sure* thing high-paid attorney's and physicians have lost their sources of income...know of any? After all, it's what we all learned was the best profession to get into, every woman wants to marry a physician or lawyer...correct?

 

[Santilli]

Flyby:

My point is simple:

The value of a stock has little to do with the actual company. What it is controlled by is the amount of money someone sinks into the stocks.
PERIOD.

You are playing a rich man's game, and, they have no care for the company, only making money on trading the stocks.

 

[Santilli]

Udaman:

I did all the stuff you are talking about. What it came down to in the end was guys that made the market fluctuate by dumping large amounts of money into companies.

The best way for them to maximize profit is to look for some company that looks good on paper, but, has an undervalued stock price. Enron comes to mind. They then dump as much money into it as possible, getting other folks, like you and I to think that the company/stock are going to go great guns, and, we think we should be in it for the long haul. Looks great from all we can legally see, right?

They turn around, dump huge amounts of shares, at high prices, make a ton of money, and, the rest of us are stuck with a stock that dumps, then stays flat, or, in Enrons case, since it was a Ponsi scheme, without the money in the stocks, the company goes under.

Plan two Madoff Ponsi type scheme:
Over a certain period of time, let's say 5 years and I'm Japanese, I slowly invest a tremendous amount of money into Microsoft, aiming at the year 2000 as the pull date.
Instead of one big hit, My shares go up 20% a year, and, the value of my money is getting bigger all the time, as both the number of shares, and, the share price grows.
Everytime it starts to go down, I buy a few more million shares, driving the price right back up. If things don't go well, I get Sony, Panasonic, call the boys, and we all invest. We have a different view of economics. We look at the major goal as bringing money to Japan, over the 10's of years. We don't think quarters in months. At a certain point, we all dump lets say 50% of our shares, right at 2000, when everyone is thinking the 2000 bug, and all that.
We make so much money that it covers the drop in the stock price on our remaining shares, and, the capital invested. The little guys panic, seeing a 50-100% drop in price, and they sell too. We wait. After the stock stabilizes at a new low, we dump 20% of the money we made back into the stock, getting 50 times the stock value, and start the cycle again. We make money each time, take money out of the United States, gain control of their industries, and slowly take over. Sometimes the government approves our buying US companies, sometimes it doesn't. But, if we control the stocks, we control the companies, and in great part, the US economy.

Japan, the Arab oil Sheiks, etc. all pull stuff like this. You can play for the long run, but, many of these Japanese companies don't play just in your lifetime. Sony, etc. have been around in one form or another since around 1900. They play in generations, not quarters.

Apple looks like this to me, right now. 3 bucks to 150? Company value has not really changed that much. Apple even when it was 3 bucks, had a huge amount of cash on hand, and, it became clear that the stock price was created by speculation, NOT company value.
I remember the dump folks saying Apple was going under. Yet, at the time, they had enough cash to run the company at a loss for 5 years. Apple was a perfect place for these kinds of savvy investors to put their money. If I was smart, I would have seen the writing on the wall. If people had enough money to artificially drop APPL this way, they could certainly do it with MSFT, which would be even better, because everyone believed in MSFT, and, therefore it would be easier to elevate the stock prices, because everyone would think they couldn't loose by investing in MSFT, could they?

I sure would like to be able to find out who buys all the stocks, but, if it is around, the investors are too smart. They would hide their positions through off shore investment accounts so we can't trace it back to who's money it really is.