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12-05-2012, 09:17 PM
  #664
DAChampion
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Quote:
Originally Posted by HCH View Post
As far as NHL teams go, there are operational profits and the "potential" capital gain on a sale in the future. You have conveniently muddied the waters and mingled the two together. Eventually, though, an enterprise does have to have operational profits if it hopes to continue to grow in value. Otherwise you are operating on the greater fool theory and that doesn't last until infinity. Ask the speculators who bought US real estate in 2006 and 2007.

As for Apple, you have no idea what the shareholders care about first and foremost. You don't know if they have a long term time horizon or a short term time horizon, you don't know if they bought it for the dividend or for growth. You can guess but you don't know... it seems a bit presumptuous to me.

And by the way, the majority of Apple shareholders aren't billionaires.
I'm not muddying the waters, it's well-known that people care about the value of their investments and not just the annual return from dividends/profits. For example, I own some mutual funds. When they send quarterly reports they state the total change in valuation of my investments -- not the aggregated weighted profit margin of each stock/bond/etc. This is how all investment funds report: as a return on investment.

That's why Forbes magazine includes percent change in valuation among the 4 or 5 columns it reports for each team: because it's clearly one of the most important attributes.

As an example, Molson and co recently paid ~550 million for the Habs+Bell Center, who report a total profit of 50 million a year total (I think?), I think. Once you factor in taxes, interest on borrowing costs necessary to finance the purchase, and the fact the money could have been invested elsewhere, this looks like a losing investment. Is it? No, it's not. You also need to factor in that the investment itself has resale value in the future.

Teams are not just profit streams. They are hard assets as well. Owners who invest in the NHL pick up both a hard asset and, 17 times out of 30, a profit stream.

Finally, WhiskeySeven has done an good job of explaining how owning a team and an arena can be a sound investment even if the operating income is flat or slightly negative. There is no need for me to reiterate.

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No where did I state or imply that Apple shareholders are billionaires, I'm not sure how you got that from my post.

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