hiltphotography.blogg.se - Bubble boy 500 dollar

#Bubble boy 500 dollar movie#

The challenge is, how does one define "overvaluation"? Tulip Mania (when a single tulip cost about 10x a craftsman's annual wage) or stocks trading at over 100x PE with no earnings during the dot.com mania comes to mind. This is often related to the "Greater Fool Theory" wherein optimistic participants (fools) buy overvalued assets in the hopes that a greater fool buys it from them at a higher price.

An inflated stock price that is detached from reality.

The metaphor indicated that the prices of the stock were inflated and fragile - expanded based on nothing but air, and vulnerable to a sudden burst, as in fact occurred.įor the sake of clarity, we need to establish and agree that for an asset to be defined as being a "bubble", it needs to have these characteristics: This was one of the earliest modern financial crises other episodes were referred to as "manias", as in the Dutch tulip mania. The term "bubble", in reference to financial crises, originated in the 1711-1720 British South Sea Bubble, and originally referred to the companies themselves, and their inflated stock, rather than to the crisis itself.

For the purposes of this article, I'll use the explanation taken from Wikipedia: How do we define what is a financial "bubble"? Search the net and you will find variances on what constitutes a financial bubble. Great stocks, however, will almost always bounce back and continue its dominant trend. Stocks will consolidate, trend sideways or even hit extreme oversold levels over time.

Unlike Exxon with a business that is easy to understand the perception will always still be."how much more can it grow at this rate?" or "it can't be."!īefore we go over the "bubble" thesis with regards to Apple, let me make it very clear that there isn't a single stock that will go up in a straight line forever. No wonder why SA wouldn't take me seriously (I can't say that I blame them!) when I sarcastically wrote " Why Apple will never be a $600 stock!" in July 2011 (when Apple was at $393) wherein I wrote:ĪAPL will most likely always get no respect. I'd love to say my analysis was correct - that Apple was overvalued at $180 a share, and that Apple at $300 a share is a bubble. "Microsoft within two years quickly moved from a growth company to a boring, fuddy-duddy, income-producing company," says Villere partner George Young.įrom Motley Fool: That's nice, but is Apple a bubble today? Here is a sampling:įrom the Wall Street Journal (via Market Currents at SA): Those excited about Apple's dividend might want to cast their minds back to what happened to Microsoft ( MSFT) when it bowed to pressure and started payouts in early 2003.

#Bubble boy 500 dollar movie#

Remember the movie " The Boy in the Plastic Bubble"? If you can, watch the movie first as you will get a better perspective on where this article is coming from.Īs Apple reached a new all time high in excess of $600/share after announcing that it will finally pay a dividend and buy back shares, I could not help but notice the proliferation of articles alluding to Apple ( NASDAQ: AAPL) reaching "bubble" proportions.