Apple’s price to earnings ratio is at a relatively paltry 14 right now, and it’s driving Apple bulls crazy.
The chart below, which shows Apple’s shrinking PE, from Apple analyst Andy Zaky has been passed around for the last week. (At the time Apple’s PE was 13.3.)
What’s wrong with this chart?
Zaky explains: “Now even though Apple’s growth has far and outpaced the growth of Oracle (16.35 P/E), Amazon (96.15 P/E), Google (19.19 P/E), Cisco (15.11), Qualcomm Inc. (20.62), Amgen, Inc (13.53), Comcast (15.11 P/E), IBM (13.95 P/E), Chevron (13.50), Johnson & Johnson (14.94 P/E), Procter & Gamble (15.49 P/E), and AT&T (13.91 P/E), the stock trades at a far lower valuation relative to these top holdings on the NASDAQ-100 and S&P 500. Some of these companies have actually contracted in 2011. Yet, the market values the earnings out of these companies on the order of 4-5 times more in some cases than they value the earnings out of Apple.”
Of course, there’s more than one way to value a stock. If you value it based on trailing free cash flow, it’s arguably priced fairly, says our Henry Blodget.
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Behold, the power of a scary-sounding letter from a lawyer! Paul dropped his Kindle 2 and it broke. Amazon wanted $200 to replace it. Instead, they replaced it and gave him an additional $200. Damn, son!
Seriously, how badass is this letter he sent to Amazon?
August 12, 2009
1200 12th Avenue South
Seattle, WA 98144-2734
Dear Sir or Madam:
On June 21, 2009, I purchased an Kindle 2 e-book reader from the Amazon.com website. I purchased this device based, in substantial part, on the expectation that it would be reasonably durable. In particular, I expected that it would be approximately as durable as is ordinary in the consumer electronics market.
Amazon.com advertises the Kindle 2 on the basis of its durability. Notably, Amazon.com displays a “drop test” video on the web page for this product. That video displays the device being dropped twice from thirty inches onto what appears to be tile. That video displays a fall with sufficient force that the device visibly bounces, and deliberately creates the impression that the device will function after impacts similar to that sequence of drops.
Despite those representations, the Kindle 2 is far less durable. On July 26, 2009, I dropped a messenger bag containing the device onto the sidewalk, from approximately two feet above the ground. It was dropped only once, and the messenger bag absorbed enough of the shock that nothing else in the bag, including a Macbook laptop, suffered an! y damage whatsoever. (Unlike the drop displayed in Amazon.com’s video, for example, nothing actually bounced.) Moreover, there was no visible damage on the exterior of the Kindle 2. Nonetheless, the Kindle 2 became completely unusable, with over 50% of its screen no longer able to display any text.
I called Amazon.com support and was told that, because of the accidental drop, you would not be willing to supply a replacement device under warranty. You did, however, offer to sell a new device at a discount, for $200.00. I took advantage of that offer under protest, and explicitly reserved my rights to bring a claim against you based on the unreasonable fragility of the device and the misrepresentations in your advertising. It is that claim that forms the subject of this letter.
I am prepared to offer an immediate settlement of my claims against Amazon.com for a payment of $400.00. That sum represents the $200.00 replacement fee I paid plus $200.00 to compensate me for the diminution of utility and value of the device as well as of the e-books I have purchased for that device, in light of the fact that the replacement device, too, can be expected to be far more fragile than advertised and prone to destruction under the slightest stress. This offer expires thirty days from your receipt of this letter. If you do not accept this offer, I intend to bring suit either individually, or, if I decide it is warranted, as representative for a class of similarly situated plaintiffs. At that time, I will seek the amount noted above, plus punitive damages under the California Consumers Legal Remedies Act, Cal. Civil Code §1750 et. seq., costs, fees, and such other monetary damages as provided for by law, including without limitation Cal. Bus. & Prof. Code §17200 et. seq., the implied warranties of merchantability and fitness for a particular purpose, and other relevant law.
Also, you have demanded the return of the broken device as a condition to the unreasonable discounted replacement offer which I accept! ed under protest. Your agent has informed me that you will charge my credit card for the full price if the broken device is not returned to you. I am considering seeking a protective order placing that device in the custody of the Court pending litigation. However, should I instead return the device, you are hereby notified that it is evidence in the anticipated litigation to which this letter refers. Should you modify, destroy, or resell the broken device, I will ask the Court to treat that as deliberate spoliation of evidence and make adverse inferences as appropriate.
Very truly yours,
And here’s Amazon’s response:
Pretty awesome. Just goes to show that if you put your somewhat-unreasonable request in an official-looking form and also threaten to sue, big companies will be happy to toss a token amount of money your way to make you go away. [Consumerist]
Over the past few months, Twitter has experienced explosive growth, attracting celebrity users such as Oprah, and a growing mountain of media and blog coverage. Sysomos Inc., one of the world’s leading social media analytics companies, conducted an extensive study to document Twitter’s growth and how people are using it. After analyzing information disclosed on 11.5 million Twitters accounts, we discovered that:
- 72.5% of all users joining during the first five months of 2009
- 85.3% of all Twitter users post less than one update/day
- 21% of users have never posted a Tweet
- 93.6% of users have less than 100 followers, while 92.4% follow less than 100 people
- 5% of Twitter users account for 75% of all activity (see the report on analysis of top-5% users)
- New York has the most Twitters users, followed by Los Angeles, Toronto, San Francisco and Boston; while Detroit was the fast-growing city over the first five months of 2009
- More than 50% of all updates are published using tools, mobile and Web-based, other than Twitter.com. TweetDeck is the most popular non-Twitter.com tool with 19.7% market share.
- There are more women on Twitter (53%) than men (47%)
- Of the people who identify themselves as marketers, 15% follow more than 2,000 people. This compares with 0.29% of overall Twitter users who follow more than 2,000 people.
Beer is yet another commodity and category that is being decimated by better quality alternatives. The means of production and distribution are no longer controlled by a very small number of big companies. Consumers find attractive alternatives in micro-brew beers or local beers. They have the means to access them (online) and have the product shipped directly to their homes. So no matter how much advertising the big companies do, if their product is just not that great, they will continue to lose customers to alternatives. The “lime” version of Bud Light was said to cannibalize sales of regular Bud Light. And rightly so, consumers are looking for a better product.
Fourth of July Holiday: Bargain Brands Gain, but Big Spenders Bud, Miller Lite and Corona Tap Out
Published: July 27, 2009
Despite a flurry of new and improved ad pushes for the country’s leading brews, the days leading up to Independence Day, usually the biggest-selling period of the year for the category, led to gruesome sales declines vs. the same period last year. Sales for Anheuser-Busch’s Bud Light and Budweiser plunged 7% and 14%, respectively, in grocery, convenience and drug stores during the two-week period ending July 5, according to scanner data from Information Resources Inc. Miller Lite suffered a 9% drop. The big importers were hurt badly too: Corona marketer Crown Imports watched sales decline 6% to 8%, while Heineken and Diageo each saw double-digit drops.
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
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