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Author: cbwhitebu Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 265867  
Subject: Is Apple a RuleMaker? Date: 10/8/2012 5:41 PM
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Trying to figure out whether to invest in Apple.

Just got through reading The Motley Fool Investment Guide...got my spreadsheets set up to capture the suggested company evaluation data for small caps, rule makers, and rule breakers.

I analysed Apple using the Rule Maker strategy and it shows that Apple has too much short term debt (urrent assets - cash / current liabilities - short term & current long term debt = .90 for latest fiscal year).

Does this mean is off the table as a Rule Maker investment?

Chris
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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 259447 of 265867
Subject: Re: Is Apple a RuleMaker? Date: 10/8/2012 10:19 PM
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You might want to double check those numbers. Apple is famous for its huge mountain of cash. People have been asking them to do something with it. Make a major acquisition. Pay dividends. Buy back stock.

They finally have agreed to begin paying dividends. But they have little reason to borrow.

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Author: cbwhitebu Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 259448 of 265867
Subject: Re: Is Apple a RuleMaker? Date: 10/9/2012 11:05 AM
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Paul,

Thanks for the reply.

My bad. The Foolish Flow Ratio is fine. It is cash vs total debt that is an issue. Apple has 27 billion in accounts payable!

The cash to total debt ratio based on the June 29, 2012 balance is

27654b/51150b = .54.

The investment guide recommends that this ratio be above 1.5.

What's an amateur investor to do? Ignore the ratio and by anyway?

Chris

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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 259453 of 265867
Subject: Re: Is Apple a RuleMaker? Date: 10/9/2012 6:01 PM
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You might get a better answer on the Rule Maker private discussion board. My view is that these numbers are guides, not hard rules. You have to decide when to make an exception. But the guide does cause you to ask the question and think about it.

Personally I am a long term Apple owner. I plan to continue holding the stock as long as they deliver the numbers. No one does it better.

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Author: kahunacfa Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 259503 of 265867
Subject: Re: Is Apple a RuleMaker? Date: 10/18/2012 9:20 AM
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Trying to figure out whether to invest in Apple.

Just got through reading The Motley Fool Investment Guide...got my spreadsheets set up to capture the suggested company evaluation data for small caps, rule makers, and rule breakers.

I analysed Apple using the Rule Maker strategy and it shows that Apple has too much short term debt (urrent assets - cash / current liabilities - short term & current long term debt = .90 for latest fiscal year).

Does this mean is off the table as a Rule Maker investment?

Chris
- cbwhitebu | Date: 10/8/2012 5:41:34 PM | Number: 259502

The Motley Fool Investment Guide by the Gardner Brothers is badly out-of-date and was NEVER really all that good or insightful to begin with when it was originally written. Their characterization of companies into Rule Makers, Rule Breakers Rule whatevers was NEVER all that helpful to investors to begin with. -- Really LAME, actually!!!

Apple(AAPL) is what it is, like many companies it had and still maintains an unique Corporate Culture started first with Steve Jobs and Steve Wozniak <The two Stevens>.

The WOZ was always the brains behind the Apple I, the Apple II and developed the Mac as well as the failed Lisa computer. The Lisa was Steve Jobs idea, developed by the Woz. Steve Jobs was the over-controlling marketing businessman of Apple. Woz NEVER really respected Jobs because Steve Jobs could not program or code himself out-of-a paper bag.

Again, regarding Apple, Apple(AAPL) is what it is. I first bought a lot of Apple shares as a tax-loss bounce stock idea between the year end 1997 in December at $10 1/4 per share. The stock rose, first because of the abatement of the tax-loss selling pressure in December 1976, and later the investment in Apple by Bill Gates of Microsoft(MSFT). Steve Jobs first product out-of-the Box was the iMac, the primary colored all-in-one PC that worked right-out-of-the packing box. The iMac was, I believe introduced the Spring of 1997. Other cool, insanely well designed products followed like Marketing clock-work. Apple is the ultimate High-end Consumer Products company. Their products just generally work, right-out-of-the Box as expected -- except for the Bozo Mapping Application on the iPhone 5. <A LAME replacement for the excellent Google Maps on the iPhone 4S.>

Apple shares later split two-for-one reducing my Apple cost per share to $5.125 per share. After the first eight-bagger, I sold enough shares to fully recover the shares cost in my IRA -- leaving 1,700 shares which the IRA retained.

Apple today, is a stock and a Cultural Ikon. The shares, for a dominant unique highly profitable company, especially after backing-out the huge cash hoard are not at all expensive at about $644 per share. It would be nice, and shareholder friendly for the stock to split ten or twenty shares for one; it will not in my opinion.

Should you Buy Apple stock? I do not know, I do not know your investment resources as far as Funds and knowledge are concerned. If you believe that The Motley Fool Investment Guide is a well written, and useful investment, then I might be concerned about you level of investment knowledge. Try reading: The Intelligent Investor by Benjamin Graham, Security Analysis, 1934 edition by Graham, Dodd, & Cottle, Portfolio Theory and Capital Markets by William F. Sharpe, One-Up on Wall Street by Peter Lynch, Jim Cramer's Real Money, Sane Investment in an Insane World by James J. Cramer, JD.

Or, even better, attend the University of Wisconsin, Madison and take this full-year investment course, Applied Security Analysis -- http://www.UWASAP.org as I did as part of a MS Finance & Economics program in the nineteen-seventies.

Kahuna, CFA
Investment Professional
1974-Present

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