GAB’er Page: 1 February 11, 2020

THE GAB’ER
Newsletter of the Greater Albany AppleByters: February, 2020
GAAB is celebrating its 36th year (2019-2020).

The next GAAB Meeting is:

Tuesday, February 11, 2020
7:00 PM at
Panera Bread

161 Washington Ave Ext, Albany, NY

A map can be found at the GAAB website at
http://applebyters.com/index.php/meeting-
information/meeting_map/
GAAB Meeting Agenda
Greetings and Dinner
Discussion: Topics presented by members and
News from Apple including Mac OS X and iOS UpdatesGAAB Help Desk:
Bring your questions

Apple Now Priced To Fall 16%

by John Rhodes Feb. 02, 2020 2:39 PM ET | Apple Inc. (AAPL) |

Summary

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GAB’er Page: 2 February 11, 2020

• Apple's price has more than doubled in one year; P/E ratio has likewise risen by a
substantial amount.
• Apple's dividend is now below 1%, but dividend growth is robust, and coverage is very
strong.
• Given Apple's valuation and starting yield, now is a time to review Buying, Selling and
Holding based on investor objectives and time horizon.

I've just put on my bulletproof vest. And I've covered myself up with a flame retardant
suit. That's because I like Apple (NASDAQ:AAPL), but I'm definitely not in love.
Therefore, because I'm not a raging bull, imagine that I'm looking like this:

So, Apple just delivered a blowout quarter. Not surprisingly, this has pushed it upward yet
again. In fact, as I write this, I'm seeing all-time highs. You can see that as #1 below. And I'll
explain #2, #3 and #4 in just a minute. First, take a peek at #1, which shows you some price
action:

AAPL is now pushing $330. From a capital appreciation perspective, this is fantastic for long-
time investors. For the record, I'm not unhappy. My cost basis is just over $116 and I'm up
around 180%. No complaints there.

PE Ratio in the Last Two Years

However, I'm not too keen on the P/E ratio here, just shy of 26 (see #2 in the graphic above).
That's not a terrible P/E in some absolute sense, but it's a far cry from what I see looking
back.

• P/E 17 in August 2019

• P/E 15 in May 2019
• P/E 13 in December 2018
• P/E 19 in August 2018
• P/E 15 in April 2018

This is all just recent past, too. Over the last 10 years, the P/E ratio has been right
about 15. Quite frankly, once I got past AAPL being a "tech company," I think that a
P/E of 15 was low. In 2011 to 2013 and then again in 2015 to 2016, there were many
times the P/E was hitting 10 to 12. In retrospect, that's kind of crazy.

In any event, P/E isn't the only metric I care about. It's hardly perfect, and it doesn't

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GAB’er Page: 3 February 11, 2020

give you buy or sell trigger points. It just tells you if it's kind of fat, kind of skinny, or
somewhere in the middle. And now, with a P/E of 26, this thing is no longer loaded like a
coiled spring. It's been sprung.

Apple's Dividend in Perspective

Now, another thing is the dividend (see #3 above). There's nothing wrong with AAPL's
dividend. But when I was loading up in 2016, I was looking at the starting yield and the
dividend growth. My yield on cost is around 2.6% in case you're wondering.

So, it's great that dividends have gone from $1.63 per share in 2013 to over $3 in 2020. My
math indicates 10% increases, give or take, over the last six years. The payout ratio has
been in the 25% range, give or take. So, no worries there.

We've got a safe dividend, strong increases and easy coverage. That's great if you've already
bought and you're holding. Dividend Growth Investors can rejoice. But per #3 above, you're
looking at less than 1% starting yield. That's rough for anyone looking for current income.
This is only a good place to enter if you're willing to hold forever, or if you only really care
about capital appreciation. The dividend is low and even with growth, it'll take 25 years to get
your investment back via the dividend.

From a purely income-oriented perspective and getting paid back for your investment, 25
years is a long time to wait. Remember, we're talking about 10% annual growth, and it still will
take 25 years for that money to come back home. Now, let's apples-to- oranges compare this
to Altria (MO). With a starting yield of about 6.6% and a dividend growth rate of around 10%,
you're getting fully paid back in just 10 years. And yes, I know this is (pun intended) an
apples-to-oranges comparison. Apple is a growing tech company whereas Altria is in a dying
industry (pun intended again).

"Experts" Tell Us Valuation is Stretched

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You can see that AAPL is also now ahead of analysts. I generally don't care too much about
this, but AAPL is followed by so many it's almost a bit of wisdom of the crowds in this case.
You can see the one-year target of $297 by looking at #4 above. We're above that by 10%
with AAPL's price today, although it'll revise up soon enough.

In any case, the point is that analysts aren't indicating undervaluation. It's more like a
consensus that we're at fair value. Don't get me wrong, there's nothing wrong with fair value,
if that's true. My point is that AAPL isn't a screaming buy. The analysts are telling us we're at
fair value or above. It's just another data point to put into our brains as we decide to Buy, Sell,
or Hold.

So, if I take this all together, from a dividend growth perspective and current income
perspective, Apple is in a tough spot. It's certainly not "bad," but it's not beating the S&P 500
average yield (around 1.75%). And it's not beating a high income savings account like
Marcus (Goldman Sachs), which is paying 1.7% as I write this. Although I admit there's no
growth in that; only reinvesting the interest in the account.

Apple Priced to Fall 16% in by 2021

If we move past the dividends, my biggest concern is straight up valuation and how that could
play out in the next 18 months according to its historical valuations. It's easily summarized
right here:

Chart by Fast Graphs

By no means is this perfect. However, given historical valuation and growth expectations,
we're looking at a -16% return over the next couple of years.

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I know, I know. This is backwards looking, and we might never regress back even close to
the mean. You don't have to tell me that because I get it.

It's possible that the market has permanently uplifted AAPL's valuation. And yet,

regression to the mean is damn powerful. It's not a predictor, and it's not gravity. But I've
seen the pull down from lofty valuations so many times.

Just looking at the vertical climb of AAPL from May 2019 until now is pretty crazy. Given the
valuation and price history, this is hard to swallow.

Data by YCharts

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The price has gone up over 100% in one year. That's just so different than AAPL's history
going far back in time. Sure, there have been some vertical price movements, but this one
doesn't cause me to rejoice.

• Apple's 100% price increase in one year frightens me as a buyer.

• At the same time, the 100% price increase is wonderful for owners.

I bought well before the 100% increase, so I'm enjoying those gains. I'm also enjoying
the buybacks and dividends. It's all great news as an owner. But the more it's going up
at this point, the less I'm inclined to buy.

I'd have a hard time even recommending AAPL to younger investors with less than a
10- year forward horizon. It's time to wait, not to buy, unless you're legitimately going
to hold for 10+ years given the valuation. And, to be clear, I'm not buying and my
average stock holding period is over seven years. I'm weird like that.

Before summarizing, I'm going to quickly make another point. My comments here about high
price and low dividends have absolutely nothing to do with my feelings about Apple as a
business. And I'm an owner, collecting dividends and enjoying dividend growth. AAPL is a
lovely company with an amazing ecosystem, and overall it's growing. But just take a look at
the recent results, so I can make a related point on that:

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Overall Apple is growing. But I'm surprised that more people weren't surprised, not by the
iPhone sales being up, but by other areas being below estimates. It strikes me as odd.

It's great that the iPhone and wearables were up, especially the wearables. I love the
diversity in income streams beyond the core iPhone. Yet, you can see that the iPad, Mac and
Services were down. Nothing crazy is going on here, but the mantra of

"Services, Services, Services" didn't hold water this quarter. Again, that doesn't bother me.
The point is more that the cheering here is really tied to the iPhone; just look at the $56B
there, it's a thing of beauty.

Cash Cow Versus Services (Or Something Else?)

I suspect AAPL is going to be just fine for a long time. What is less clear to me is how is it
going to get there and what will the market feel like with this uncertainty over time? The
market hates uncertainty, and this quarter actually got me thinking about the iPhone cash
cow instead of Services. And that in turn gets me thinking about why tech always spooks me:
There's a lot of change and a lot of uncertainty.

Now, to summarize, especially if you skipped down here to the bottom. Apple is a wee bit
overvalued, or maybe even well overvalued given historical norms. If you're already an owner
of AAPL, then it's perfectly fine to hold. To be clear, I'm holding.

If you're thinking about becoming a buyer, then it might make sense to wait unless you've got
a time horizon that's 10 years or more, and if you don't care about locking in a higher
dividend. The dividend is low, but it's safe. I suspect given the ongoing thrust of sales, the
brand and the moat in general, the dividend will continue to grow in the 8- 12% range.

Disclosure: I am/we are long AAPL, MO. I wrote this article myself, and it expresses my own
opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no
business relationship with any company whose stock is mentioned in this article.

Use your iPad as a second display for your Mac with Sidecar
From Apple Support

With Sidecar, you can use your iPad as a display that extends or mirrors your Mac desktop.

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Extend or mirror your Mac desktop with Sidecar

1. Make sure that your Mac and iPad meet the Sidecar system requirements.
2. You can use Sidecar wirelessly, but to keep your iPad charged during use, connect it
directly to your Mac with the USB charge cable that came with your iPad.
3. Click the AirPlay icon in the menu bar on your Mac, then choose the option to
connect to your iPad. Or use Sidecar preferences to connect.
If you don't see the AirPlay icon, choose Apple menu > System Preferences, click
Displays, then make sure that ”Show mirroring options in the menu bar when
available” is selected.
4. Your iPad should now show an extension of your Mac desktop. You can move
windows to it and use it like any other display.
5. To mirror your Mac display so that both screens show the same content, return to the
AirPlay menu, which is a blue rectangle while using Sidecar. Choose the option to
mirror your display. This is a great way to share your Mac screen with others.
6. To end your Sidecar session, return to the AirPlay menu and choose the option to
disconnect. Or click the Disconnect button in the sidebar on your iPad.

Learn more about using external displays. For example, you can use Displays preferences to
arrange displays so that your iPad extends the left, right, top, or bottom of your desktop.

Move a window to your iPad display

If you hover your pointer over the full-screen button of a window, you can choose to
move that window to or from your iPad display. It's faster than dragging the window, and the
window is perfectly resized for your display.

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Use the sidebar

The sidebar puts commonly used controls on the side of your iPad screen. It includes
Command, Shift, and other modifier keys, so you can choose essential commands with your
finger or Apple Pencil instead of a keyboard.

Use Sidecar preferences to turn off the sidebar or change its position.

Tap to show or hide the menu bar when viewing a window in full screen on iPad.

Show or hide your computer's Dock on your iPad.

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Command. Touch and hold to set the Command key. Double-tap to lock the key.

Option. Touch and hold to set the Option key. Double-tap to lock the key.

Control. Touch and hold to set the Control key. Double-tap to lock the key.

Shift. Touch and hold to set the Shift key. Double-tap to lock the key.

Undo the last action. Some apps support multiple undos.

Show or hide the onscreen keyboard.

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Disconnect your iPad, ending the Sidecar session.

Use the Touch Bar

Many apps on Mac have Touch Bar controls that make common actions even easier. With
Sidecar, you get a Touch Bar on your iPad screen even if your Mac doesn’t have a Touch
Bar. It works just like the Touch Bar on Mac, and you can tap its controls with either your
finger or Apple Pencil.

Use Sidecar preferences to turn off the Touch Bar or change its position.

If the Touch Bar doesn't appear when using an app that offers Touch Bar controls, choose
Apple menu > System Preferences, click Mission Control, then make sure that “Displays
have separate Spaces” is selected.

Use gestures for scrolling and other actions

Multi-Touch gestures on iPad remain available when using Sidecar. These gestures are
particularly useful with Sidecar:

• Scroll: Swipe with two fingers.

• Copy: Pinch in with three fingers.
• Cut: Pinch in with three fingers twice.
• Paste: Pinch out with three fingers.
• Undo: Swipe left with three fingers, or double-tap with three fingers.
• Redo: Swipe right with three fingers.

Use Apple Pencil

To point, click, select, and perform tasks such as drawing, editing photos, and manipulating
objects on your iPad while it's extending or mirroring your Mac display, you can use your
Apple Pencil instead of your mouse or trackpad. You can also use it to write, sketch, and
mark up documents while seeing the updates live on your Mac.

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Sidecar also supports double-tap, which you can turn on in Sidecar preferences. Double-tap
enables apps that support this feature to perform custom actions when you double-tap on the
side of your Apple Pencil (2nd generation).

Use iPad apps

While using Sidecar, you can switch to an iPad app, then interact with that app on your iPad
as you normally would. This suspends your Sidecar session until you switch back to the
Sidecar app or disconnect Sidecar. The Sidecar app appears on your home screen only while
using Sidecar.

Use Sidecar preferences

Choose Apple menu > System Preferences, then click Sidecar. These preferences are
available only on computers that support Sidecar.

• Show Sidebar: Show the sidebar on the left or right side of your iPad screen, or turn it
off.
• Show Touch Bar: Show the Touch Bar on the bottom or top of your iPad screen, or
turn it off.

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• Enable double tap on Apple Pencil: Allow apps that support this feature to perform
custom actions when you double-tap on the side of your Apple Pencil (2nd
generation).
• Connect to: Choose an iPad to connect to, or click Disconnect to stop using Sidecar.

Sidecar system requirements

Sidecar requires a compatible Mac using macOS Catalina and a compatible iPad using
iPadOS 13:

Mac using macOS Catalina

• MacBook Pro introduced in 2016 or later

• MacBook introduced in 2016 or later
• MacBook Air introduced in 2018 or later
• iMac introduced in 2017 or later, plus iMac (Retina 5K, 27-inch, Late 2015)
• iMac Pro
• Mac mini introduced in 2018 or later
• Mac Pro introduced in 2019

iPad using iPadOS 13

• iPad Pro: all models

• iPad (6th generation) or later
• iPad mini (5th generation)
• iPad Air (3rd generation)

Additional requirements

• Both devices must be signed in to iCloud with the same Apple ID using two-factor
authentication.
• To use Sidecar wirelessly, both devices must be within 10 meters (30 feet) of each
other and have Bluetooth, Wi-Fi, and Handoff turned on. Also make sure that the iPad
is not sharing its cellular connection and the Mac is not sharing its Internet connection.
• To use Sidecar over USB, make sure that your iPad is set to trust your Mac.

Learn more

• If you can't use AirPlay or mirror your device's screen

• Resolve Wi-Fi and Bluetooth issues caused by wireless interference, which can affect
Sidecar performance when using Sidecar wirelessly.
• Use Continuity to connect your Mac, iPhone, iPad, iPod touch, and Apple Watch

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VOICES | LEARNING RESEARCH

The Best Edtech for Students Is Backed by Research. Here’s What to Look
For.

By Megan Silander and Naomi Hupert Feb 6, 2020

In almost any school in the country today, you can find an app or program that claims to
change education as we know it. Yet schools are littered with products that have not changed
anything beyond teachers’ desktop screens.

As researchers focusing on education technology, we see this often: interactive whiteboards

covered in posters, desktop computers holding up plants, older devices that do not work with
a newer assessment system. The list goes on.

Our work at the nonprofit Education

Development Center’s Center for Children and Technology focuses on how education
technology can be used to support learning. The truth is edtech products that foster more

learning than would happen in analogue settings can be difficult to find. When we get to see
effective edtech products in practice, the view is exciting: We see kids engaged, teachers
energized about the kinds of thinking their students are generating and strong learning
outcomes that result from well-made tools matched to the students and educators using
them.

So naturally, one of the big questions we face is, how can we help ensure effective edtech
happens more often? The key lies in helping educators to look at the available evidence and
make careful decisions. In many cases, that’s easier said than done.

Making Time for Research

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The promise of media and technology to transform student learning has led schools in the
U.S. to outlay an estimated $8 billion annually on software and digital resources, not including
hardware. At the same time, educators face difficulty identifying edtech products that meet

their needs and improve student learning. One recent study of school spending estimated
that up to two-thirds of software licenses are never activated.

When it comes to making decisions about edtech purchases, teachers and administrators are
pretty much on their own. There are few systems in place to help identify products that have
been effective in producing positive learning outcomes—yet a flourishing business in
promoting programs based on little or no evidence at all.

We recognize that conducting detailed reviews of evidence requires substantial time and
resources. Teachers should not have ferret out findings from a stack of research studies just
to figure out what programs will be a good fit for their students. But the alternative is even
less palatable: spending money and time on products that don’t work and don’t support
learning. To mitigate the risks inherent in trying out a potentially ineffective product, we
suggest the time and effort spent evaluating the evidence should be proportional to the
amount of time students will spend using the product.

Reviewing research studies to determine effectiveness can be a complex process. Part of

that complexity is that decision-making is not typically linear but rather iterative, unfolding
over time. However, we have identified a set of steps that any educator can work through and
that can help simplify and streamline a search for effective ed tech products.

These guidelines are based on our years of experience designing and conducting studies to
assess the impact of educational technology on learning and draw on what we have learned
about sizing up products and their claims. Our hope is that by sharing these steps we can
help teachers, school administrators and others tasked with selecting ed tech products to
make choices that match the needs and learning goals of students, and that allow the
potential of well- designed and researched edtech to flourish.

Finding Existing Evidence

Your first step in this process is locating any available evidence of impact, including research,
evaluation or impact studies done on the product you are considering. Research databases,
including Google Scholar, ResearchGate and JSTOR can serve as resources for peer-
reviewed studies. A few websites offer summaries of rigorous research on educational
interventions,

including evidenceforessa.org, Best Evidence Encyclopedia and the What Works

Clearinghouse. We also suggest emailing researchers for access to journal articles that are
behind paywalls. (If no studies have been conducted, or if you are not provided access to
them, then perhaps consider other edtech options that do have evidence.)

Here are five questions to ask when assessing the strength of the evidence. You should be
able to find the answers to these questions in published studies—or you may have to ask the

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edtech vendor or research partner to provide the information you need. Once you have
answered these questions you will have developed a rough study rubric to weight your
confidence on whether the claims made about different products will work for your students or
your school.

Does the study design provide a compelling comparison group?

It is essential to understand the comparison group (sometimes called the control group)
because the strength of a research claim hinges on the extent to which there is a plausible
comparison group.

A comparison group represents what would have happened without the intervention. Thus,
the difference between the treatment and comparison groups is the impact. Below we include
several ways in which studies may or may not provide a comparison group, leading to varying
levels of strength in terms of study findings:

Randomized controlled study: These are among the strongest research designs: a
researcher randomly assigns students into either a treatment group that is given an
intervention or a comparison group that does not receive the intervention. Random
assignment is intended to ensure the treatment and comparison groups are the same along
both measurable characteristics such as test scores as well as unmeasured characteristics
such as motivation to learn. Strong randomized designs need to ensure the comparison and
treatment group are similar on baseline characteristics before the intervention begins. This
could mean that the groups of students have similar scores on a state test or a pretest
relevant to the study. But it also means that they are similar in other important characteristics,
such as grade, class size, gender, English language ability and special education services.

Comparison group studies: Comparison group and “quasi-experimental” studies attempt to

identify a roughly equivalent comparison group without randomization. This type of study is
weaker than a well-designed random control trial because we cannot be sure the comparison
group is similar to the group receiving the intervention. For example, a quasi-experimental
study might test out a one- to-one laptop program with School A that is excited about new
technology and then compare gains in state assessments before and after the program with
School B. If School A’s teachers are more motivated and choose to participate in the
intervention while School B’s teachers opted out, it is impossible to disentangle the effects of
an intervention from the qualities of the teachers who elected to use it.

Student data for one group of students:

Some studies include only one group of students—for example, providing teachers with an
online reading curriculum to try out with students and describing change between state
English language arts tests administered before and after using the curriculum. These studies
provide the weakest evidence as it is impossible to distinguish the effect of the edtech
product from the myriad interventions schools typically use, such as other reading-based
activities throughout the school day, during the summer or in other subjects.

How does the study measure success?

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Study-specific measures designed by the research team provide weaker evidence than
commonly used measures with independently documented reliability and validity, such as
state test scores or other third-party assessments. However, some interventions may have
shorter- or longer-term impacts not easily measured in a school year, making use of more
standardized measures a challenge. In this case, looking for indicators of implementation
might provide information about the value of an intervention, such as how many teachers
attended the professional development, how many teachers and students used the
intervention in their classrooms and for how long during the school year.

Who did the research?

It is important to follow the money. Studies paid for by the organization or company that
produced the program or resources tested are typically less reliable than studies that are
externally funded. A company or organization’s interests in positive findings can bias or lead
to selective reporting about the findings.

Mitigating biases is also necessary as even external researchers may add unhelpful
subjectivity. Look for studies where the individuals who assessed children or analyzed results
were blind to whether the students were in the treatment or comparison conditions. Likewise,
place a higher premium on studies that have been pre-registered publicly (for example, with
the Registry of Efficacy and Effectiveness Studies), which keeps researchers from being
tempted to adjust analyses to find a positive effect.

How much learning happened during the study?

Even very small effects on learning can be “statistically significant” with a large sample size.
A statistically significant finding is not enough to indicate a program or product “works.” The
research should describe the size of the effect and explain whether it is meaningful, for
example, describing how much students typically grow on the measure over a year and how
the growth from this intervention is greater than would happen otherwise (e,g., students
gained 3 months’ equivalent of targeted math skills) or how much they have grown from
similar kinds of interventions. Moreover, make sure the outcome—test scores, absence rates,
etc.—is something you care about.

Who participated in the study?

To have confidence that the findings of the study reflect something that would likely happen
in another context, the sample needs to be relatively large. The larger the size, the more
confident you can be about findings. As recommended under the federal Every Study
Succeeds Act, a sufficient sample size should be around 350 students or more, or 50-plus
classrooms or schools that each contain more than 10 students.

Also, the study sample should include a broad range of students, schools or districts similar
demographically and facing similar constraints, capabilities and resources. Edtech can
exacerbate inequalities if it is not accessible or adaptable to students who have different
learning needs or if schools vary considerably in their ability to support things like consistent
tech support or reliable access to high-speed internet.

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Finally, if a tech product has great evidence but does not meet student needs, the evidence is
meaningless. Structure your edtech purchase decision process from the beginning by
focusing on student and teacher needs, identifying the underlying problem or challenge you
want to underlying problem or challenge you want to address and its root cause. Then assess
whether educational technology can be part of the solution.

This story is part of an EdSurge Research series about how school communities across the
country are connecting research and practice. These stories are made publicly available with
support from the Chan Zuckerberg Initiative. EdSurge maintains editorial control over all
content. (Read our ethics statement here.) This work is licensed under a CC BY-NC-ND 4.0.

Megan Silander is a researcher for the Center for Children & Technology at the Education
Development Center. Naomi Hupert is a senior research scientist and co-leads the Center for
Children & Technology.

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