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2021-05-17
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Apple Stock 101: What All Investors Should Know
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How have share price and valuation behaved historically? Here are key fac","content":"<p>How does Apple make money? How have share price and valuation behaved historically? Here are key facts and figures that every old, new, and aspiring Apple stock investor should know.</p>\n<p>I believe that every investor looking to put money into Apple stock ($AAPL) should be aware of a few important facts about the company and its shares. Today, the Apple Maven presents “Apple Stock 101”, an article that provides the basics for old, new, and aspiring Apple shareholders.</p>\n<p>“Apple Stock 101” is meant to be a fresh, frequently updated document to be used as a reference guide. Therefore, feel free to bookmark this page and come back for future updates.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/c9abbfcb83975d7e7b88e620f5b3dc19\" tg-width=\"1240\" tg-height=\"697\"><span>Figure 1: The Apple Park, in Cupertino, CA.</span></p>\n<p><b>Apple’s history</b></p>\n<p>The Cupertino-based company is an important piece of the personal computing revolution of the 1970s and 1980s. Apple was co-founded by the now famous Steve Jobs and Steve Wozniak to market one product at first: Wozniak’s Apple I PC.</p>\n<p>Later in the 1980s and into the 1990s, Apple became known for its Macintosh line of computers – a golden age for the company. But the period also marked the end of the first Steve Jobs era, as the celebrity founder was ousted in 1985.</p>\n<p>Apple struggled through most of the 1990s, even flirting with bankruptcy at one point. The stock dropped nearly 80% between March 1992 and December 1997. Steve Jobs returned to the company near the late 1990s bottom to make history again in the tech industry over the following decade and a half.</p>\n<p>Between 2001 and 2010, Apple changed the world by introducing devices that became household staples. The popular MP3-playing iPod came out early in the 2000s, while the category-defining iPhone and iPad were launched in 2007 and 2010, respectively.</p>\n<p><b><i>Fun fact</i></b><i>: it was during this period marked by the Intel-based Mac and early innings of the mobile revolution that Apple stock produced its largest three-year gain ever: 1,000% between 2003 and 2006.</i></p>\n<p>Today, Apple is a tech behemoth that sells several products and services ranging from 5G-ready smartphones to smartwatches and even financing through a credit card partnership with Goldman Sachs ($GS). As of May 2021, the consumer discretionary conglomerate was the most valuable company in the world, and the only in the US to have ever been valued above $2 trillion.</p>\n<p><b>Apple’s business segments</b></p>\n<p>Apple has often been called “the iPhone maker” for a good reason. In fiscal 2020, half of the company’s sales came from this product category. Mac and iPad, two immensely popular product categories, added up to no more than 20% of total company revenues combined.</p>\n<p>See charts below depicting revenue split on the left and operating profit split on the right. Notice that, despite accounting for only one-fifth of revenues, the services segment (i.e. App Store, Apple Music, Apple TV+, etc.) produced over one-third of the profits in fiscal 2020. This is the case due to higher and more scalable margins for most services and software.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/cbba752736c12883cc561e7f59f383f3\" tg-width=\"1240\" tg-height=\"500\"><span>Figure 2: Fiscal 2020 revenues by segment.</span></p>\n<p>The two graphs below slice revenue growth in a couple of different views. On the left, notice that the Apple Watch and AirPods helped to make “other products” the fastest growing segment in 2020, at 25% year-over-year. The laggard was the iPhone, due mostly to the delayed launch of the iPhone 12.</p>\n<p>On the right, it becomes clear that the developed markets in the West performed better during the pandemic year, growing at least 7% despite the challenges. Greater China suffered most due to (1) the earlier COVID-19 hit and (2) lack of a 5G-ready iPhone in a country where the 5G network infrastructure is ahead of the rest of the world.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/3f37af7677eb0cb04bafa42370e9f861\" tg-width=\"1240\" tg-height=\"499\"><span>Figure 3: Fiscal 2020 growth by segment and geography.</span></p>\n<p><b>Apple stock’s performance</b></p>\n<p>Ever wonder how much you could have made investing in Apple stock at the December 1980 IPO? Wonder no more:<b>124,000%</b>. This means that a $1,000 investment in Apple in the early 1980s would have grown to over $1.2 million today, for an annualized return of 19%.</p>\n<p>Below is a chart of Apple stock’s price since just prior to the Great Recession, adjusted for stock splits, compared to the S&P 500 ($SPY), the Nasdaq ($QQQ) and the Dow Jones ($DIA) indices. Notice that Apple has lavishly outperformed its broad-market benchmarks in the past decade and a half.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7aa93bcd763ad594cc8144a00453eea9\" tg-width=\"953\" tg-height=\"474\"><span>Figure 4: AAPL, S&P500, Nasdaq and Dow Jones since 2007.</span></p>\n<p>Here are some important facts and figures on Apple stock:</p>\n<ul>\n <li>Annualized return of <b>19%</b> since the IPO, better than the S&P 500 by about 11 percentage points;</li>\n <li>Annualized volatility of <b>45%</b>, measured by one standard deviation, which is a solid three times higher than the S&P 500’s volatility (i.e. riskier). However, as Apple matured as a company and stock, the volatility has dropped to a much more manageable <b>28%</b> since 2010;</li>\n <li>Maximum peak-to-trough drawdown of <b>82%</b>, a painful pullback that happened not during the thick of the dot-com bubble correction, but in 2003, during the recession that followed. By early 2005, Apple had already reclaimed all-time highs.</li>\n <li><i>Fun fact #1</i>: although Apple has produced outstanding returns since the IPO, the first 18 months were very rocky. Between December 1980 and early July 1982, Apple stock dipped <b>62%</b>. Since then, shares have increased <b>324,000%</b>.</li>\n <li><i>Fun fact #2</i>: as much as 19% annualized returns since the IPO date may be outstanding, the stock’s best long-term performance happened between the 2003 bottom and today. During this 18-year period, Apple shares produced jaw-dropping annualized gains of <b>42%</b>! An initial investment of $1,000 in April 2003 would have been worth half a million now.</li>\n</ul>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Apple Stock 101: What All Investors Should Know</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nApple Stock 101: What All Investors Should Know\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-05-17 19:33 GMT+8 <a href=https://www.thestreet.com/apple/stock/apple-stock-101-what-all-investors-should-know><strong>TheStreet</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>How does Apple make money? How have share price and valuation behaved historically? Here are key facts and figures that every old, new, and aspiring Apple stock investor should know.\nI believe that ...</p>\n\n<a href=\"https://www.thestreet.com/apple/stock/apple-stock-101-what-all-investors-should-know\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AAPL":"苹果"},"source_url":"https://www.thestreet.com/apple/stock/apple-stock-101-what-all-investors-should-know","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1177169075","content_text":"How does Apple make money? How have share price and valuation behaved historically? Here are key facts and figures that every old, new, and aspiring Apple stock investor should know.\nI believe that every investor looking to put money into Apple stock ($AAPL) should be aware of a few important facts about the company and its shares. Today, the Apple Maven presents “Apple Stock 101”, an article that provides the basics for old, new, and aspiring Apple shareholders.\n“Apple Stock 101” is meant to be a fresh, frequently updated document to be used as a reference guide. Therefore, feel free to bookmark this page and come back for future updates.\nFigure 1: The Apple Park, in Cupertino, CA.\nApple’s history\nThe Cupertino-based company is an important piece of the personal computing revolution of the 1970s and 1980s. Apple was co-founded by the now famous Steve Jobs and Steve Wozniak to market one product at first: Wozniak’s Apple I PC.\nLater in the 1980s and into the 1990s, Apple became known for its Macintosh line of computers – a golden age for the company. But the period also marked the end of the first Steve Jobs era, as the celebrity founder was ousted in 1985.\nApple struggled through most of the 1990s, even flirting with bankruptcy at one point. The stock dropped nearly 80% between March 1992 and December 1997. Steve Jobs returned to the company near the late 1990s bottom to make history again in the tech industry over the following decade and a half.\nBetween 2001 and 2010, Apple changed the world by introducing devices that became household staples. The popular MP3-playing iPod came out early in the 2000s, while the category-defining iPhone and iPad were launched in 2007 and 2010, respectively.\nFun fact: it was during this period marked by the Intel-based Mac and early innings of the mobile revolution that Apple stock produced its largest three-year gain ever: 1,000% between 2003 and 2006.\nToday, Apple is a tech behemoth that sells several products and services ranging from 5G-ready smartphones to smartwatches and even financing through a credit card partnership with Goldman Sachs ($GS). As of May 2021, the consumer discretionary conglomerate was the most valuable company in the world, and the only in the US to have ever been valued above $2 trillion.\nApple’s business segments\nApple has often been called “the iPhone maker” for a good reason. In fiscal 2020, half of the company’s sales came from this product category. Mac and iPad, two immensely popular product categories, added up to no more than 20% of total company revenues combined.\nSee charts below depicting revenue split on the left and operating profit split on the right. Notice that, despite accounting for only one-fifth of revenues, the services segment (i.e. App Store, Apple Music, Apple TV+, etc.) produced over one-third of the profits in fiscal 2020. This is the case due to higher and more scalable margins for most services and software.\nFigure 2: Fiscal 2020 revenues by segment.\nThe two graphs below slice revenue growth in a couple of different views. On the left, notice that the Apple Watch and AirPods helped to make “other products” the fastest growing segment in 2020, at 25% year-over-year. The laggard was the iPhone, due mostly to the delayed launch of the iPhone 12.\nOn the right, it becomes clear that the developed markets in the West performed better during the pandemic year, growing at least 7% despite the challenges. Greater China suffered most due to (1) the earlier COVID-19 hit and (2) lack of a 5G-ready iPhone in a country where the 5G network infrastructure is ahead of the rest of the world.\nFigure 3: Fiscal 2020 growth by segment and geography.\nApple stock’s performance\nEver wonder how much you could have made investing in Apple stock at the December 1980 IPO? Wonder no more:124,000%. This means that a $1,000 investment in Apple in the early 1980s would have grown to over $1.2 million today, for an annualized return of 19%.\nBelow is a chart of Apple stock’s price since just prior to the Great Recession, adjusted for stock splits, compared to the S&P 500 ($SPY), the Nasdaq ($QQQ) and the Dow Jones ($DIA) indices. Notice that Apple has lavishly outperformed its broad-market benchmarks in the past decade and a half.\nFigure 4: AAPL, S&P500, Nasdaq and Dow Jones since 2007.\nHere are some important facts and figures on Apple stock:\n\nAnnualized return of 19% since the IPO, better than the S&P 500 by about 11 percentage points;\nAnnualized volatility of 45%, measured by one standard deviation, which is a solid three times higher than the S&P 500’s volatility (i.e. riskier). However, as Apple matured as a company and stock, the volatility has dropped to a much more manageable 28% since 2010;\nMaximum peak-to-trough drawdown of 82%, a painful pullback that happened not during the thick of the dot-com bubble correction, but in 2003, during the recession that followed. By early 2005, Apple had already reclaimed all-time highs.\nFun fact #1: although Apple has produced outstanding returns since the IPO, the first 18 months were very rocky. Between December 1980 and early July 1982, Apple stock dipped 62%. Since then, shares have increased 324,000%.\nFun fact #2: as much as 19% annualized returns since the IPO date may be outstanding, the stock’s best long-term performance happened between the 2003 bottom and today. During this 18-year period, Apple shares produced jaw-dropping annualized gains of 42%! 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