Thursday, March 1, 2012

Endless Apple

Fortunes can be made and lost at the casinos in Vegas, but just as easily can be made or lost in the stock market with much less risk. Casinos are designed for the house to come out ahead in the long run, making it very difficult to make a fortune at the tables. The stock market, however, provides a safer way to invest your money in the hopes of striking it rich.

How big a gamble is Apple's stock? The unbelievable increase since January makes this seem like an easy way to make money, but tread carefully. History has shown that with large spikes in a company's stock, large decreases are also bound to occur.

This past week Apple surpassed the 500 point mark as well as the 500 billion dollar value mark showing a strong correlation between the earnings and the stock’s value. As for the people who really believe Apple's stock has a chance to double and eclipse the 1000 point mark, take a look at the article imbedded in the title. The author Henry Blodget details the difficulty of Apple becoming a trillion dollar company. He sums his article up by saying "Apple would have to double the sales of its three main products and maintain its profit margin and earnings multiple." While these tasks are not impossible, I find it hard to believe Apple will be able to come close to doubling their earnings in the near future, which means it will be very difficult for them to come close to the 1000 point mark.

2 comments:

AliceZheng said...

I think that if any company had a chance to surpass the trillion dollar mark, it would be Apple. However, I can't see Apple managing to increase its sales THAT much because most consumers probably already own a version of an apple product. Unless Apple can create an even better, original product that no other company has, Apple would still not be able to expand at that rate. Clearly, investing in Apple now would not be the smartest thing to do. Apple stock has plummeted in the past, so there is no reason to suggest it won't again.

Jacqueline Young said...

As Alice said, Apple is an extremely large and profitable company, and its outreach into the global community is undeniable. However, I also think it may be unattainable for Apple to surpass the trillion dollar mark. Apple also recently lost its co-founder and CEO Steve Jobs, which may have significant impacts on its function and innovation.