Comments on: Why Apple should ignore its shareholders A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: Kaleberg Thu, 14 Feb 2013 04:46:35 +0000 “So, what is the point of owning stock again?
No claim on current profit, no claim on retained earnings.
Is the hope that you find a sucker or sell before management does actually crater value?”

Didn’t some economist win the Nobel prize for explaining this? Was it Modigliani? It’s all beyond me.

By: MaysonLancaster Thu, 14 Feb 2013 01:38:13 +0000 Interesting tidbit re Apple and Amazon: they’re both selling (less cash and to one significant figure) at 2X sales. Mr. Market seems to think that a dollar spent at Amazon (and the promise of more to come) is worth about as much as a dollar spent at Apple. Seems crazy to me, but I’m sure that Mr. Market can stay crazed for much longer than I could stay solvent betting against him, so I won’t (except for possibly being long Apple).

By: FifthDecade Thu, 14 Feb 2013 01:33:54 +0000 It’s funny how many people seem to think that cash is a bad thing to have in a company. I guess Kodak wouldn’t mind a bit now.

When it comes to owners destroying companies though I suspect this is far less likely to happen to Apple (who had a near death experience already thanks to listening to speculator shills) than it is to Microsoft whose share price hasn’t moved in a decade, and whose profits are based on just two, decades-old technologies.

When a years supply of NAND chips costs $7 billion, and the rest of the computer is similarly expensive, you soon get through a pile of cash if an idea doesn’t pay off.

By: Zdneal Wed, 13 Feb 2013 16:27:58 +0000 So, what is the point of owning stock again?

No claim on current profit, no claim on retained earnings.

Is the hope that you find a sucker or sell before management does actually crater value?

This is a serious question. Buffet’s story of reinvested earnings making stocks better than bonds only works as long as management doesn’t destroy the firm before you realize your gain. It also is based on the idea that the earnings would be invested in more productive ventures than stockholders could find. If it’s just going into tbills again it makes no sense.

AAPL’s price shows the flaws in the idea of the stock market and corporations more than it reflects anything about AAPL itself.

By: FifthDecade Wed, 13 Feb 2013 13:53:52 +0000 Well, everyone knows that the Korean Copyshop copies other peoples ideas – they don’t actually have any of their own.

By: mfw13 Wed, 13 Feb 2013 00:58:32 +0000 With regards to Apple, it’s growth has been a function of its product development being one step ahead of those of its competitors, something which currently is not the case.

The iPod, iPad, and iPhone were all groundbreaking products that were way ahead of anything being produced by their competitors at the time. However, these days, Apple looks more like Microsoft…just releasing updated versions of its flagship products. They have no new groundbreaking products in the pipeline, and Samsung has caught up to them, and is now churning out products with similar functionality at a fraction of the price.

Here in China, for example, Samsung products have become much more popular than Apple, something that wasn’t the case as recently as eighteen months ago.

Apple needs to come up with another groundbreaking product if it wants to keep growing….it’s been almost six years since the first iPhone was released, and almost three years since the first iPad was released. Apple can’t live off them forever.

By: FifthDecade Wed, 13 Feb 2013 00:21:53 +0000 Speak for yourself bvanho1! It’s a simple premise: profits are more important than market share, excellence is better than mediocrity, usability is better than features, engineering is better than buying off the shelf, innovation is better than protecting a thirty year old franchise, targeted approaches are better than scatter gun shooting.

It’s called brainpower. It’s got nothing to do with theology.

By: bvanho1 Tue, 12 Feb 2013 20:09:11 +0000 Bert Dohmen called it, check his tweets from last summer. He gave some very good reasons to be out of AAPL in December and January:

But maybe you’re right when you make a theological pronouncement like, “But you can’t time an individual stock like that: no one can. Especially when there was nothing — no thing — which caused the stock to fall.”

I guess the rest of us will have to continue to invest based on information, as the theology of AAPL you espouse is just beyond us.

By: hypermark Tue, 12 Feb 2013 17:09:29 +0000 Apple investors are cry babies, plain and simple. The stock has long traded at a significant discount to immediate peers like Google and Amazon, neither of whom can match the company’s profit picture, operating margins, cash, revenue diversity, nor who pay any kind of dividend.

No less, the company trades at a significant discount to cross-industry ‘gold standard’ companies like Walmart, Coca Cola, Nike, Southwest or Procter & Gamble.

Finally, Apple is exceedingly transparent with analysts and investors in breaking out its sources of revenue, cost structures, channels, etc., in stark contrast to its competitors.

Apple **should** ignore its investors ala the Jeff Bezos approach, as all of their attempts at transparency have only bitten them in the butt, something that I wrote about here:

Cry Babies: The Strange, Confusing Path of the Apple Investor  /2013/01/cry-babies-the-strange-confusi ng-path-of-the-apple-investor.html

Check it out, if interested.

By: WaltFrench Tue, 12 Feb 2013 17:06:33 +0000 Thanks for the reminder that these funny stock ticker thingies are actually connected to companies making products & services.

This is the most cogent reminder I’ve seen in months that whatever else financial engineering might do, it depends on a solid engine of (in Apple’s case) engineering, design, production and marketing.