Long term OIL

[STT]

We are basically talking about the price of shares (since market cap is essentially the price of one share multiplied by the number of shares traded), so it doesn't really matter if Apple actually produces something or only designs what others are producing for it. In fact, during the Dotcom era in the early 2000s many start-ups remained purely virtual (vaporware) and neither produced nor designed anything at all (only promised). But this didn't in the least prevent their stocks from being traded, pumped and then spectacularly dumped in the end

Apple doesnt resemble vapour ware.  The shares arent on a high multiple to real earnings, the market has some doubt in their future revenue.  The main thing inflated for Apple is their profit margin directly with the customers.   They retail quite directly to the customer and in some cases might be making upto 70% of the price in profit.   You can argue this profit goes to future design and innovation to keep customers with the most easy to use devices.  
Across the board Apple rates as the most reliable, highly sought after most preferred design of any pc, their customers do genuinely like the output of the company.   I dont think its just a trend but with some people a requirement to use a computer and be happy.

So long as their customers are rich enough to endure 70% profit margins and consider it a good purchase then Apple shares are not due to fall.  In a recession maybe Apple suffers worse then others as the alternative is people start to buy the cheapest hardware and foresake ease of use for pure value.      Vapourware would be something else where the proposed utility was non existent and there was no value in any design in theory or even in production.

For OIL the premium relies on lack of innovation, both in oil extraction and alternate energy.   Also demand for energy is rising and many of the worlds largest countries dont have cars as commonly used still as the west

[crockoo]

I have read the news about the oil industry and the car industry and I'm thinking that cars are moving to electric type.
Some popular cities in Europe are not allowing cars with diesel motors to access the city, but only with gasoline or electric so oil future is very problematic.

Yes, you are right now very fashionable to produce electric vehicles. But I am sure that they will never be produced in large quantities. Large oil tycoons simply unacceptable

Everything start small but after a while it becomes popular and people will love it and electric cars are just awesome.
The only bad thing is that the price of them is pretty high and the production of them is worse for the nature than oil cars.

Every new invention has high price in the beginning and as it goes old, and more people uses the new technology the price tends to decrease with the passage of time and same will happen with  electric cars.

I know, high prices are in every field in the beginning, the same is also with new technology stuff, they are very expensive and their value drops after a year or few.
But the OIL industry can't be destroyed so easy, there are many other stuff that needs oil whatever happens with batteries(like tesla)

For many years we are talking about electric cars, but did not begin to produce them in large quantities.
The oil industry is very strong and it does not allow switching to other types of resources. That is why I believe that there is still scope to invest in this profitable

[deisik]

We are basically talking about the price of shares (since market cap is essentially the price of one share multiplied by the number of shares traded), so it doesn't really matter if Apple actually produces something or only designs what others are producing for it. In fact, during the Dotcom era in the early 2000s many start-ups remained purely virtual (vaporware) and neither produced nor designed anything at all (only promised). But this didn't in the least prevent their stocks from being traded, pumped and then spectacularly dumped in the end

Apple doesnt resemble vapour ware.  The shares arent on a high multiple to real earnings, the market has some doubt in their future revenue.  The main thing inflated for Apple is their profit margin directly with the customers.   They retail quite directly to the customer and in some cases might be making upto 70% of the price in profit.   You can argue this profit goes to future design and innovation to keep customers with the most easy to use devices.   
Across the board Apple rates as the most reliable, highly sought after most preferred design of any pc, their customers do genuinely like the output of the company.   I dont think its just a trend but with some people a requirement to use a computer and be happy

I don't get the point of what you say

You started by claiming that Apple does not actually produce the goods but only designs them (or has the rights to each design) and on this basis it can't be called pure speculation. But I didn't call it pure speculation in the first place. I say that much of Apple's market value is speculation. I don't think that most people are going to buy their shares to await 14 years just to return the investments. Obviously, these shares are bought with the purpose of speculating in expectation that their price will rise further and they can be sold for a profit. I can't grasp how your post is related to that, how quality of Apple products (or lack thereof) and their profit margins have anything to do with how much of the company's market value is due to speculation

[jaysabi]

We are basically talking about the price of shares (since market cap is essentially the price of one share multiplied by the number of shares traded), so it doesn't really matter if Apple actually produces something or only designs what others are producing for it. In fact, during the Dotcom era in the early 2000s many start-ups remained purely virtual (vaporware) and neither produced nor designed anything at all (only promised). But this didn't in the least prevent their stocks from being traded, pumped and then spectacularly dumped in the end

Apple doesnt resemble vapour ware.  The shares arent on a high multiple to real earnings, the market has some doubt in their future revenue.  The main thing inflated for Apple is their profit margin directly with the customers.   They retail quite directly to the customer and in some cases might be making upto 70% of the price in profit.   You can argue this profit goes to future design and innovation to keep customers with the most easy to use devices.  
Across the board Apple rates as the most reliable, highly sought after most preferred design of any pc, their customers do genuinely like the output of the company.   I dont think its just a trend but with some people a requirement to use a computer and be happy.

So long as their customers are rich enough to endure 70% profit margins and consider it a good purchase then Apple shares are not due to fall.  In a recession maybe Apple suffers worse then others as the alternative is people start to buy the cheapest hardware and foresake ease of use for pure value.      Vapourware would be something else where the proposed utility was non existent and there was no value in any design in theory or even in production.

For OIL the premium relies on lack of innovation, both in oil extraction and alternate energy.   Also demand for energy is rising and many of the worlds largest countries dont have cars as commonly used still as the west

The low (relative) PE multiple isn't necessarily a lack of confidence that investors are worried about Apple's future so much as a recognition that Apple is too large to be valued as a growth stock. No company as large as Apple can put up rapid growth. It's just the law of large numbers. Berkshire has the same problem, which is why they don't go after small companies anymore, because acquiring them can't move the needle. Warren Buffet take now about his "elephant gun" for making huge acquisitions, because that's the only thing that moves the needle.

[romero121]

I have read the news about the oil industry and the car industry and I'm thinking that cars are moving to electric type.
Some popular cities in Europe are not allowing cars with diesel motors to access the city, but only with gasoline or electric so oil future is very problematic.

Yes, you are right now very fashionable to produce electric vehicles. But I am sure that they will never be produced in large quantities. Large oil tycoons simply unacceptable

Everything start small but after a while it becomes popular and people will love it and electric cars are just awesome.
The only bad thing is that the price of them is pretty high and the production of them is worse for the nature than oil cars.

Every new invention has high price in the beginning and as it goes old, and more people uses the new technology the price tends to decrease with the passage of time and same will happen with  electric cars.

But when the popularity increases, automatically the price of the particular product or the technologies value will get increased. In such cases as quoted by above mate the price won't gets dropped.

[bryant.coleman]

For many years we are talking about electric cars, but did not begin to produce them in large quantities.
The oil industry is very strong and it does not allow switching to other types of resources. That is why I believe that there is still scope to invest in this profitable

For the past 10-15 years, there has been no major technological innovation in the electric vehicle sector. There is too much dependence on the Lithium-Cobalt combination for batteries and till now no suitable replacement has been found. And this impedes the widespread adoption of electric cars, as both Cobalt and Lithium are in short supply.

[Antoshka]

For many years we are talking about electric cars, but did not begin to produce them in large quantities.
The oil industry is very strong and it does not allow switching to other types of resources. That is why I believe that there is still scope to invest in this profitable

For the past 10-15 years, there has been no major technological innovation in the electric vehicle sector. There is too much dependence on the Lithium-Cobalt combination for batteries and till now no suitable replacement has been found. And this impedes the widespread adoption of electric cars, as both Cobalt and Lithium are in short supply.

All this once again proves that in the coming years will be very profitable to invest in oil companies. They will always be profitable and grow

[uneng]

For many years we are talking about electric cars, but did not begin to produce them in large quantities.
The oil industry is very strong and it does not allow switching to other types of resources. That is why I believe that there is still scope to invest in this profitable

For the past 10-15 years, there has been no major technological innovation in the electric vehicle sector. There is too much dependence on the Lithium-Cobalt combination for batteries and till now no suitable replacement has been found. And this impedes the widespread adoption of electric cars, as both Cobalt and Lithium are in short supply.

All this once again proves that in the coming years will be very profitable to invest in oil companies. They will always be profitable and grow

They won't be always profitable, oil will become worthless in the future and will be only used for less sectors than now. The car electric isn't very used yet, because the lobby doesn't allow it. It's not interesting for oil estabilishment and many junk countries, so it's not used.
But they can't stop the future for much time. Oil should stop to be used, let it where it belongs, inside the planet, technology is here to help and it's here to give people quality with low costs and in this case electricity can be used instead of oil.

[STT]

I don't think that most people are going to buy their shares to await 14 years just to return the investments. Obviously, these shares are bought with the purpose of speculating in expectation that their price will rise further and they can be sold for a profit.

14 years isnt a long time to wait to get all your money back and on top still own all the assets of the company.    The speculation part exists in those 14 years, will profits continue for that time and if so its a valid investment at least breaking even.

Many think the market is driven by flashy traders but its all centered around long term investors.    This is eventually what brings down markets, such as the sub prime debt setup that was fine for a while.     So we disagree, I think people own Apple to gain a share of the valid company profits.    They made a perfectly reasonable business last year, profited and shared that gain with investors.

It is a brand name in a varied market but so is Coke and they done fine for decades because they held onto something unique and that flavour is valued by enough people they can charge a quite large premium over water and sugar and thats all it is.   Apple is simple and yet also a valid profit in a similar way.

My argument for bitcoin is always it has to be easy to use, its using clever tech and modern communications but it must layer that to give masses of people a 1 click solution.    If bitcoin cant do it, others will.   Capitalism is always about comparison and competition, Im calling Apple valid business for the moment and even though I prefer PC I know many users value it.   Most of the share price reflects normal business expectations and probability.   When optimism is too extreme and not even based on current results, I agree its speculative and unstable; this exists but Apple isnt most guilty or even (most) big Oil AFAIK.

Some accuse Bitcoin of being all speculation, it has a use too though.    Oil price is speculative as we know there are giant reserves but utility requirement for it is there also, I would argue world growth requires oil or very large development in energy alternatives, currently too slow

[14 years roughly equates to 5% interest compound in comparison to a normal savings account.    Then we can compare that to debt such US treasuries which are grossly overvalued and this shows in their rate of return of 2.3% and thats after it rose alot.   The figure for apple excludes the dividend they also pay.   The extreme contrast was early 80's USA debt at 16% yield, low mark for valuations with much fear and low speculation at least in treasuries - today we are at high point]

[praboso96]

For many years we are talking about electric cars, but did not begin to produce them in large quantities.
The oil industry is very strong and it does not allow switching to other types of resources. That is why I believe that there is still scope to invest in this profitable

For the past 10-15 years, there has been no major technological innovation in the electric vehicle sector. There is too much dependence on the Lithium-Cobalt combination for batteries and till now no suitable replacement has been found. And this impedes the widespread adoption of electric cars, as both Cobalt and Lithium are in short supply.

All this once again proves that in the coming years will be very profitable to invest in oil companies. They will always be profitable and grow

They won't be always profitable, oil will become worthless in the future and will be only used for less sectors than now. The car electric isn't very used yet, because the lobby doesn't allow it. It's not interesting for oil estabilishment and many junk countries, so it's not used.
But they can't stop the future for much time. Oil should stop to be used, let it where it belongs, inside the planet, technology is here to help and it's here to give people quality with low costs and in this case electricity can be used instead of oil.

Yes I agree. If there are alternative resources, they need to use. Why destroy the planet and to extort resources.
And I'm sure that in 10-15 years, the oil companies will not benefit

[deisik]

I don't think that most people are going to buy their shares to await 14 years just to return the investments. Obviously, these shares are bought with the purpose of speculating in expectation that their price will rise further and they can be sold for a profit.

14 years isnt a long time to wait to get all your money back and on top still own all the assets of the company.    The speculation part exists in those 14 years, will profits continue for that time and if so its a valid investment at least breaking even

Obviously, you are omitting essential details from consideration

You implicitly assume (either intentionally or inadvertently) that the price per share will remain the same. This is the amount of time it will take to break even if the price doesn't fall and dividends don't run dry. While it might actually rise at the end of this term, but there is by no means any guarantee that it won't go substantially lower in at least some periods of this time span. It is not even guaranteed that Apple will exist at all in 14 years. Further, you can't compare interest paid on bonds with dividends since this interest is fixed while government bonds (say, treasuries) are basically the same dollars, and your principal will remain the same in dollars no matter how the stock market might behave (crash to the floor or rally to the sky)

[criptix]

I don't think that most people are going to buy their shares to await 14 years just to return the investments. Obviously, these shares are bought with the purpose of speculating in expectation that their price will rise further and they can be sold for a profit.

14 years isnt a long time to wait to get all your money back and on top still own all the assets of the company.    The speculation part exists in those 14 years, will profits continue for that time and if so its a valid investment at least breaking even

Obviously, you are omitting essential details from consideration

You implicitly assume (either intentionally or inadvertently) that the price per share will remain the same. This is the amount of time it will take to break even if the price doesn't fall and dividends don't run dry. While it might actually rise at the end of this term, but there is by no means any guarantee that it won't go substantially lower in at least some periods of this time span. It is not even guaranteed that Apple will exist at all in 14 years. Further, you can't compare interest paid on bonds with dividends since this interest is fixed while government bonds (say, treasuries) are basically the same dollars, and your principal will remain the same in dollars no matter how the stock market might behave (crash to the floor or rally to the sky)

A nation can go bankrupt too (crash to the floor).
It is a bit complexer then that though.

E.g. the interest paid could be worth less through inflation  (one of the means to reduce debt). 
Assets in form of stocks and properties usually rise in view of inflation (e.g. QE).

[bryant.coleman]

For many years we are talking about electric cars, but did not begin to produce them in large quantities.
The oil industry is very strong and it does not allow switching to other types of resources. That is why I believe that there is still scope to invest in this profitable

For the past 10-15 years, there has been no major technological innovation in the electric vehicle sector. There is too much dependence on the Lithium-Cobalt combination for batteries and till now no suitable replacement has been found. And this impedes the widespread adoption of electric cars, as both Cobalt and Lithium are in short supply.

All this once again proves that in the coming years will be very profitable to invest in oil companies. They will always be profitable and grow

There is no guarantee for the long-term. A number of countries are forcing private vehicle owners to shift from gasoline to the more cleaner natural gas. The city of Beijing is actively considering a ban on gasoline-run vehicles. The issue of vehicle pollution is attracting growing attention. By 2025 or 2030, gasoline-run vehicles may be completely banned in the major cities.

[deisik]

For many years we are talking about electric cars, but did not begin to produce them in large quantities.
The oil industry is very strong and it does not allow switching to other types of resources. That is why I believe that there is still scope to invest in this profitable

For the past 10-15 years, there has been no major technological innovation in the electric vehicle sector. There is too much dependence on the Lithium-Cobalt combination for batteries and till now no suitable replacement has been found. And this impedes the widespread adoption of electric cars, as both Cobalt and Lithium are in short supply.

All this once again proves that in the coming years will be very profitable to invest in oil companies. They will always be profitable and grow

There is no guarantee for the long-term. A number of countries are forcing private vehicle owners to shift from gasoline to the more cleaner natural gas. The city of Beijing is actively considering a ban on gasoline-run vehicles. The issue of vehicle pollution is attracting growing attention. By 2025 or 2030, gasoline-run vehicles may be completely banned in the major cities.

Beijing might have no other choice but to completely ban gasoline-powered vehicles. Unlike Shanghai which is bigger but located on the coast of the East China Sea (and thus better ventilated overall, so to speak), Beijing is entirely continental (and lies in the basin at that), so it has horrible pollution issues. On the other hand, how good is natural gas for small passenger cars?

Wouldn't it require too much volume for the same distance compared to gasoline?



Unless we are talking about liquid hydrogen as fuel, of course

[Sithara007]

On the other hand, how good is natural gas for small passenger cars?

Wouldn't it require too much volume for the same distance compared to gasoline?

Unless we are talking about liquid hydrogen as fuel, of course

Yes... that is one issue with CNG (compressed natural gas). The cars need to be recharged every 150 or 160 km. But then, there is a massive reduction in pollution. The Carbon Monoxide emissions are reduced by 90% and Hydrocarbon emissions by 60% when compared to the gasoline-run vehicles.

[jaysabi]

On the other hand, how good is natural gas for small passenger cars?

Wouldn't it require too much volume for the same distance compared to gasoline?

Unless we are talking about liquid hydrogen as fuel, of course

Yes... that is one issue with CNG (compressed natural gas). The cars need to be recharged every 150 or 160 km. But then, there is a massive reduction in pollution. The Carbon Monoxide emissions are reduced by 90% and Hydrocarbon emissions by 60% when compared to the gasoline-run vehicles.

It's not quite that bad. There's only one natural gas capable car available in the US I'm aware of, the Honda Civic NGV, but the range is 220 miles, which is about 350 km, more than double the range you listed. Natural gas isn't very practical for the US for consumer cars, but does make an excellent alternative for fleet vehicles and heavy duty trucking, where most of the application is currently focused.

[Sithara007]

It's not quite that bad. There's only one natural gas capable car available in the US I'm aware of, the Honda Civic NGV, but the range is 220 miles, which is about 350 km, more than double the range you listed. Natural gas isn't very practical for the US for consumer cars, but does make an excellent alternative for fleet vehicles and heavy duty trucking, where most of the application is currently focused.

The American cities are not as crowded as the Chinese and Indian ones. So naturally, the atmospheric pollution is not that bad. And also, a lot of Americans can afford the Tesla Model S or the Chevrolet Bolt. They are even better than the Honda Civic NGV in combating pollution.

[Shiroslullaby]

Its actually surprising all the developments that China has made recently in the advancements of 'green' energy.
The US and other counties may actually fall behind, with China becoming the leader in renewable energy from solar and wind.

Especially with Donald Trumps appointments, namely Rex Tillerson (former Exxon Mobil CEO) as Secretary of State,
you can bet the current administration will do everything in its power to pass rules and regulations to help big oil companies have free reign.
Not sure what this means for the price of oil in the long-term, but you can bet the US based companies will be looking for any way to increase profits.

[deisik]

It's not quite that bad. There's only one natural gas capable car available in the US I'm aware of, the Honda Civic NGV, but the range is 220 miles, which is about 350 km, more than double the range you listed. Natural gas isn't very practical for the US for consumer cars, but does make an excellent alternative for fleet vehicles and heavy duty trucking, where most of the application is currently focused.

The American cities are not as crowded as the Chinese and Indian ones. So naturally, the atmospheric pollution is not that bad. And also, a lot of Americans can afford the Tesla Model S or the Chevrolet Bolt. They are even better than the Honda Civic NGV in combating pollution.

Most populous American cities are located either on the oceanic coast (e.g. LA, SF, NY) or on the coast of big lakes (e.g. Chicago) while in India and China the most polluted cities (their capitals) are strictly continental. I guess this has much more influence on pollution than the number of cars as such. Further, I don't think that NY is less crowded overall than, say, Delhi, and it certainly has more cars. On the other hand, how many Americans can really afford electric cars?

They still seem to be pretty much a toy in the hands of the rich and superrich

[Sithara007]

Most populous American cities are located either on the oceanic coast (e.g. LA, SF, NY) or on the coast of big lakes (e.g. Chicago) while in India and China the most polluted cities (their capitals) are strictly continental. I guess this has much more influence on pollution than the number of cars as such. Further, I don't think that NY is less crowded overall than, say, Delhi, and it certainly has more cars. On the other hand, how many Americans can really afford electric cars?

They still seem to be pretty much a toy in the hands of the rich and superrich

You are right. Some of the most populous Indian cities (such as Delhi, Lucknow, and Kanpur) are located thousands of miles away from the coast. And also, the public transport system is horrible in India. So people prefer to use their own vehicles.