Apple’s Price/Earnings Dilemma…I Mean the G/S (Google/Samsung Dilemma)

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  • on November 19th, 2012

In hindsight, the almost 30 percent crash in $AAPL stock will be easy to understand.

I am digging into the streams and research and data to get an edge, because I am bleeding money and my instincts only say buy and keep buying both Google and Apple.

Henry Blodget has a great summary post up on what has been going on in Wall Street’s minds, but this is not just for the last few months, it has really taken place since 2009 when Apple went on an explosive growth tear.

In hindsight, it is $GOOG’s Android that has torn at it’s price/earnings ratio and trillion dollar market potential. It’s not Steve Job’s death, it’s not the strategy of Apple for the most part, it’s the execution of Google and Android and that of Samsung.

Google pinned it’s ears back and just made magic happen with the Android platform on a global basis. Google won’t give an inch on anything that smells big. Big brains, big profits, big bets. This has seemed at times wreckless, but has kept the Apple tax reasonable to date.

If Apple traded at 30 times earnings, sure the stock would have hit $1,000 plus, but the potential fall would have been steeper and meaner if ‘platform’ really is what matters in the long run.

Horace Dediu (@asymco), the must read on $AAPL (great analysis without the breathless price targets).

Look at Android grow.

I own both stocks. I also own Facebook as I bought back on the blog to hedge the fact that I was making fun of them so often.

Facebook has now rallied 20 percent and Apple and Google have now fallen 20 percent. On Friday I also bought Yahoo ($YHOO). They will not go quietly anymore and are a pawn in everyone’s growth story.

I will continue to like buy Apple and Google (MAYBE YAHOO) stock on weakness as long as the overall smartphone market seems like a lock to triple or quadruple in the next 5 years.

I expect Google and Apple to come to their sense around patent wars, because their own fighting has allowed Samsung to build it’s own monster of a business.

These are insanely exciting times for such globally profitable growth companies in the hottest of hot markets.

Chasing the stocks has been wrong, but buying on 20-30 percent weakness at least for Apple and Google is something I will just do reflexively until it does not work.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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