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Today i’m gonna take you guys through why apple stock represents the easiest money you can make in the stock market okay this is my view on apple and i’m going to take you through all the different points on why i view apple literally as the easiest money you can make over the next 5-10 years in the stock market it’s like it’s ridiculous how easy it is when you buy
Apple stock guys and we’re going to go through all the points here now this apple represent the biggest amount of money you can make in the stock market as far as stock that can go up the most i don’t think so i’m not even close but as far as like you know almost almost a guaranteed return of a nice return over the next 5-10 years it pretty much represents that
Guys so let’s talk about apple here into depth i’m going to take you all through this on why i literally view it as the easiest money you can make in the stock market okay so apple the first thing i’m gonna think of is their main part of their business which is iphone okay iphone iphone iphone this is a main part of their business and so you’ve got several key
Factors going into iphone that makes me very bullish on apple overall an iphone overall if you don’t already know by far the apple’s biggest segment is their iphone as far as what to their business after that its services after that it’s mac’s and ipads and all that other stuff accessories and whatnot iphone ok let’s just talk about iphone for a minute right one
You’re gonna have big unit volumes go up okay now not necessarily this year not next year unit units are gonna go up massively when 5g comes out okay 5g the iphone is expected to probably come out around september 2019 is expected when the 5g iphone is gonna come out that is going to create a massive super cycle for people upgrading to 5g okay if you don’t already
Know 5g is a massive improvement over 4g it basically they’re gonna make 4g technology make it look like you have a 3g phone nowadays okay if you have a 3g phone nowadays it’s like a joke right 4g is going to look like such a joke once 5g comes out we’re talking about speeds between ten and a hundred times faster guys it’s ridiculous like you you wanted something
To pull up it pulls up immediately like no question about it okay you can download a midi a video in literally like seconds like seconds entire you know video download or a movie will download verses you know sometimes it takes minutes or hours on 4g okay massive improvement so we’re gonna see unit volumes go up big time when the 5g iphone comes out alright also
We’re gonna continue to see average selling prices go up okay average selling prices are going up significantly because basically as more and more features getting these iphones and not just iphones this is the high-end samsung’s as well and the high-end google phones the pixels and whatnot as you know more and more you know i guess you say value is there guess
What’s gonna happen the price goes up and up and up and that’s been the history of the smartphone right the the original iphone was around $499 the original iphone was around four hundred nine dollars and they thought that was so expensive oh my gosh she was going to spend $499 on an iphone and then just kept going up going up going up now we’re at about a thousand
Dollars if you want the high-end iphone okay thousand bucks okay and it’s gonna continue to go up as you know the basically features become more and more important as i’ve been talking about for a year or two in this channel the the the smartphone represents the most important device in people’s lives over everything okay over everything over there car over there
Tv over everything that phone you take that away from them it’s like this is not cool man especially when you talk about around the world places like china there’s there’s you know in the united states the smartphone is seen as everything right then go to china and it’s like 10 times more valuable there guys so we’re going to continue to see average selling prices
Go up and we’re gonna see major unit volume start to go up when the 5g iphone comes out which is probably september 2019 if it doesn’t come out in 2019 is gonna come out probably in september to 2020 okay so regardless over the next year or two you’ll you’ll end up starting to see units go up so that’s iphone that’s great when you got advert selling prices going up
And you got unit volumes that will start to go up in a major way again this is just you know huge business already in its – it’s gonna continue to get big okay then from there we’re gonna go on to the next part here which is we talk about services okay so now the neck bullets thesis on this one is services alright their services business is continuing to increase
Dramatically okay dramatically we’re talking about services last quarter was up somewhere around thirty percent okay so this is a pretty consistent 20 percent to 30 percent growth engine for apple right now and it’s already the second biggest business and so much as money is just straight profit this is something that’s you know maybe the growth rates will end up
Slowing eventually but as far as you know could you ever see this business going negative no not really services is a category that will continue to grow for apple because of all the innovation the app store so many people sign up for services that are recurring revenue you know think of the netflix or think of about the spotify zoar apple music you know app
Actually you know apple bit branded products and things like that you know think about all the game apps there’s so much that that apple is making money on all that and that’s just a trend that’s gonna increase and increase and increase over time will they always be able to grow it 20 30 % i doubt it eventually the law of large numbers will catch up with them in
The growth rates real slow but you know even when they slow it’s already going to be such a massive business this could be as big as iphone if not bigger than iphone within five years guys that’s how much this business is going up okay so services is gonna continue to be a profit beefs for them alright then let’s go on to the next part which is around there for
Pe right now this is a company that does not have a high value on the forward p/e ratio okay forward p/e on apple right now somewhere around a 14 okay that is low that is really really low especially for a company that has very nice growth look at the growth in profits they had last quarter look at the growth in revenues are extremely impressive they’re actually a
Pretty decently strong growing company and they’re trading like it’s a value stock okay that’s a big mistake there alright next up we’re going to go on to basically what they have as a cash okay cash they have ridiculous amounts of cash on that balance sheet that can be used for so many different things all right that cash can get them through a rainy day if we
Have a recession anytime soon right if we have a recession two three four or five years from now they got so much cash you know they don’t even have to you know fire any employees or anything like that or they don’t want they got so much cash it’s ridiculous and guess what there’s such a profitable business that those tens of billions of dollars they throw off
Each quarter right in profits just go straight to cash okay and then they can do some interesting things with it from there okay they can do some real interesting things so with this cash they go ahead and they do buybacks okay they go ahead and do buybacks which these buybacks take off massive amounts of shares off the market okay which makes their eps go up
Okay eps look even better and better and better now the eps is going up for a few reasons one is they’re doing this massive buyback taking more shares off the market you take more shares off the market that’s less shares to count against the net income which makes your eps look even better and then when you’re making more and more profits because iphone business
Is exploding services business exploding all these type of things and you already have a low for p it just makes it that much better guys when you’re doing a buyback and you’re bringing down that share count out there it’s huge it’s so big guys that’s it’s a massive massive thing okay next part we’re gonna go into here is what i call they’re gonna have more and
More div increases okay dividend increases so basically the dividends are likely going to continue to go up year after year after year as those dividends get bigger and bigger and bigger more and more dividend investors are gonna want to flock to apple stock they could they could literally double that dividend tomorrow and it would hardly even affect the company
Okay in terms of cash and whatnot they could literally double it tomorrow like they could triple it and still be at a safe place they could nearly quadruple it and still be a you know a place where they actually are under some companies as far as what companies pay out in dividends so a dividend is likely to increase in massive massive ways they’re guys right
Then from there well i mean if this isn’t enough bullishness you no reason to want to buy apple stock i don’t know what else we could have here but then we have the accessories category we’ll just call it the new stuff category okay new stuff okay what is new stuff category think about the wireless you know earbuds they have now that a lot of people are starting
To get think about the new home pods that are going into people’s homes think about all those things think about apple watch think about all those different devices okay this is all new revenue new profit stuff okay and new ways to get people in the door to get apple products you see apples master plan is always not just to necessarily make a bunch of money off
Of specific product it’s to get you to become a loyal customer to get on the iphone okay this is our master plan and when you get an iphone you’re going to spend a bunch of money on services okay and they do this very successfully by launching successful accessory products okay so for instance how i got her i was never i never used apple products i refuse to use
Apple products you know i and growing up as a kid and whatnot oh son i’m not 20 21 years old okay i meet my wife and she wins an ipod touch from the company or we were working out okay and so she wins his ipod touch and i start using it and this little teeny ipod touch i started using that more than i was using my actual laptop computer and the next thing you
Know i buy an ipad okay and i love that ipad i’m using all the time and i was using an android phone at that time and i was like i love this software i love the way everything works is so intuitive i was using this hawawa phone at the time and next thing you know a year later i get an iphone in nowadays i’m apple through and through i have iphones ipads macs
The whole deal they won me over as a customer and probably forever okay i buy their services they make you know i have their cloud products they make so much money off me and you know each year it’s insane okay so they wouldn’t me over so all this new stuff it just gives apple and more and more opportunities to win over more and more customers okay the same way
Ipads did for instance i know people in my real in real life that have gotten ipads within the past year and they were diehard samsung and guess what phones they just bought last month last month they just switched over to iphone it’s amazing how it goes guys and that’s how they get more and more customers through the door they delight they make the customer happy
The customer enjoys whatever device they start on and might be an apple watch and a few might be a home pod might be you know headphones whatever and they use that first product and next thing you know they want apple for everything they buy the iphone they get two services everything okay and it’s just it’s just easiest money you can make out there guys it’s
The easiest money you can make i mean are there risk to apple i guess there’s risk to every company who’s gonna come and take them out samsung google no no they’re not gonna come take them out it could be a new company good luck with that okay apple’s probably the last company i would ever want to compete against directly or indirectly like it’s just ridiculous
Guys good luck competing against those guys so when i look at this you you’re gonna have massive increase in unit volume and a high phone once 5g comes out you have average selling prices going up you have services which is becoming their second biggest business increasing dramatically and will continue to okay you have a low ford p of this company under what the
Markets trading at which is crazy because this is a strong growth company you haven’t them having mass amounts of cash reserves and throwing off you know ten billion plus a quarter in profits then they use that cash to do these huge buybacks which makes it eeps go up even more and more because one they’re more profitable to they’re taking more shares off the market
It makes earning per share look even better make some more valuable company dividend increases are likely to come each year over the next you know five 10 years to you know get to a place where they’re gonna probably start paying out five to ten dollars a year in dividends okay and you’ve got all this new stuff which is just gonna drag more and more not just that
This is going to create new revenue no profits for apple but it’s going to bring in more and more customers to become the loyal customers who have the iphone and the services which is the holy grail for apple and easiest money these his money out there guys i’ve been bullish on apple since i’ve been bullish on apple since it was around 100 hundred and two dollars
When they basically came out with iphone 7 i posted a video on this channel about you know being bullish on apple and i’ve just been bullish that flag is nothing else i could say about that since that time apples not quite doubled it’s probably up 80 or 90 percent since then and i don’t see any reason why it’s gonna slow anytime soon maybe they have a year where
You know the stock doesn’t move or it goes down a little bit what i love over the next five 10 years there’s pretty much no easier money to be made out there than apple i hope i hope it goes down i hope you know analysts come out and say oh why phones not gonna grow any more whatever they’re gonna make up in their heads i hope they come out and say that because
I would love to buy more and more apple shares i would love to we have a big apple stake already i would love to double or triple that this year that would be freakin phenomenal so we’ll see what happens guys but anyways easiest money in the market in my personal opinion let me know what you think in that comment section thank you for watching have a great day
Transcribed from video
Why Apple Stock Is Easy Money! By Financial Education