Apple share-price-off-a-cliff: Told you that would happen I was allowed to write this piece because in November I wrote to our glorious editor after a London Quant's Group seminar to say that the price of Apple shares would tank sooner rather than later. As you all know, that’s just what happened - from just shy of $800 to the mid $400s. The reason I don’t make all that much money …
I remember a company with a huge cash pile, used to be the darling of "the markets" year after year, fingers in various diversified markets.
Then one year something happened and the shares went from £12 to 2p in the space of a few months.
And shortly after that they were gone.
What was the name?
GEC
Obviously it couldn't happen to Apple, or even MS.
Apple are doing it exactly right.
They are buying up strategic enterprises with one proviso, that being Apple stays mostly below the radar .
The strategy is so far so good. There is simply no point in them spending big if that means they become a big monopoly instead of the worlds biggest cash earner.
Apple are showing a lot of restraint and that's good - the easy option would just be to spend all that cash on massive acquisitions that probably be at a bad price. Instead use the cash to fund their supply chain, increase the dividend a bit etc. Cash is king and it puts them in a very strong position if the right opportunities did come along.
Methinks if certain users of Apple products were responsible for ....... Speak to nations with anything systemically disruptive and/or catastrophically destructive to status quo governance admin systems, developed and successfully stealthily tested underground/privately, with advisories that instructions sets are already deeply embedded and primed for remote virtual detonation with anonymous lead activation ... a proprietary failsafe, non attributable launch configuration ...... and earlier estimates and notions of seven seven figured and eight eight figured sums floated for works and beta tests carried out are justifiably replaced by nine nine figured sums which deliver one billions to spend as a billionaire should in further prime development of such programs and protocols as successfully target and deliver 0day exploits to nations for ..... well, universal defence and global attack weapons are but two immediately available uses which would spring to both the more primitive and the more sophisticated mind, methinks. ...... would Apple have no worries about losing wealth and value and those certain users would have great fun in spending absolute fortunes with lots of free giveaways to whoever helped them. Andrew Carnegie got it just right when he said ..... “The man who dies rich, dies disgraced.”
And yes, it would be true to say that all of that is currently active and live and proposed and nested on a number of round tables with a need to know of such as can be done nowadays with disruptive constructive technology with alternative virtual methodologies which target hearts and minds and money pits and ponzi fiat currency scams.
Sorry, I couldn't make it through the article. The premise just too far off for me:
The Brits are famous for having the most backwards IT environments on the planet, and this fellow is using his experience in those environments to say that Apple (one of the most innovative companies on the planet) will fail?
I don't believe this fellow has a relevant reference point to Apple's culture, nor it's capacity to innovate.
Well, if you bought in at 600 a share, come on people. You deserve to lose your money. It was too high and every one knew it. You also have to understand that in the US market there is this thing called profit taking that happens every Friday, and at the end of quarterly reports. It's a good time to buy some shares if you don't let it go too high on you. The real problem with apple is they need a new visionary leader. They still make the best consumer products on the planet and have been set up very well to succeed, but they no longer have an overall direction with out a new visionary. They need a leader. Until then they are sort of floundering around dabbling and rehashing. They need a new vision.
... of rampaging institutional stupidity in the Pentagon since 1945:
"The inevitable fact is that giving you more and more money compels you to make worse decisions and this is the important bit. No matter how good you are at deciding, more money makes your decisions dumber."
My observation is Tesco. Customers get a good deal, shareholders can't complain, The Board of Directors get their millions and farmers commit suicide at the rate of one a week.
All the company problems we see is from a small group of people in control who maximize their take at the expense of whoever they can screw.
The question is often asked at shareholders meeting "Why are you paying shareholders a dividend when our company made a loss?" And the chairman's answer is "To secure future investment." In other words we are a Ponzi scheme.
When someone earns 100k and possesses 10M, why do they want any more ? I don't know Bernie Ecclestone so I can't ask him. I have a suspicion but if any reader is in that class I would appreciate an answer.
Because of who I used to work with, I've met four 'on the ST Rich List' billionaires.
What the extra £990+ million gets you is very very nice houses in London, Paris, New York, Switzerland, India and anywhere else you want to be, not just a very nice one somewhere. You can arrange things so that paying tax is optional.
If you call presidents and prime ministers, you will get through to them, and politicians in all those countries (perhaps not Switzerland, but I suspect I am being foolish) will do you all sorts of favours.
And when some of your dodgier dealings come out, "you can take it on the chin, call a cab, and begin to recover on your fourteen-carat yacht, what?"
Only one of them was a nice person, and he'd made his money ages ago by taking risks, not taking a cut of a ruling family's corruption (two of them) or hoovering up state subsidies (the other one).
Thank you AC. But I cannot see why any of the options you describe are of benefit.
If I had 10M I could have a yacht moored in Greece and pop out there at weekends. We only get one life so why does anyone want to waste time giving the prime minister an earful ?
I suspect the reason is that it is a game and men get addicted to it. It could be played with a Monopoly board but these people do it with our money.
I am in that class of people and I do not think that I am unique. I an worth 10M and earn a great deal more than 100K (£) p.a., yet I still go to work every day earning more money (and paying more tax than most people earn).
Why, you ask?
Because if I stop now, I will not be able to fund my current lifestyle for the rest of my life and have enough in reserve for disasters, family etc. Satisfied?
You need to use bigger numbers.
Bernie E. Why should he stop earning money? It's a no brainer - he loves what he does (screwing all and sundry). Why do the Stones tour? Because they are musicians and they like performing. There are a gazillion reasons for wanting more money - it's hard to have too much, and sometimes the money comes along as a result of doing something one enjoys - i.e. it's a byproduct not the purpose. Widen your horizon a bit.
As Charlie Munger says, if you can't cope with 50% falls in the market price, you probably don't deserve to own shares in a business.
The combined market cap of the world's carriers is far greater than Apple's, and they apparently hate Apple. Yet Apple is able to milk 50% of its profits from the carriers, because Apple delivers subscribers who pay more, and who switch carrier less. How are the carriers going to put Apple out of the picture when they have to make 3 year volume commitments to get iPhone, and bleed subscribers when they don't have iPhone. Apple changed the mobile customer experience by leveraging government-forced carrier competition, and Google et al walked in through the open door behind Apple. Apple had already forced the music business to get out of the way. And that's what the cash pile is for. There is no industry in the world that Apple cannot extract groundbreaking change and cooperation from, because Apple has the cash to set up as a formidable competitor if they don't get cooperation. Two industries that must be in the firing line next are TV content distribution, and retail banking services. TV is a tough one because the product is not fungible.
The idea that Apple is a gadget company that got lucky is supremely naive. They are an engineering company, and they engineer whole industries and markets. The gadgets, software and cloud services are the result of their success, not the cause of it, and that's why it's never going to matter if Apple's products lack geek appeal.
I realise that Apple is moving away from the Mac and it's a pity.
I'd like to see them investing some of their pile of riches into greatly expanding their mac user base.
They could reduce the cost of the MacPros and make them seriously competitive in price with standard high-end PCs.
They could buy EA and have all their games released first for the mac. They could produce a serious games-oriented Mac.
They could buy Ireland.
They could strive so that from, say, 2014 on, everybody's first computer would be a Mac. The iPad should point the way to get Mac Minis into every bedroom and livingroom. Make it $300 and offer MS Office for almost nothing. Offer greatly subsidised MacBooks to students and schoolkids.
In other words, make them an offer they can't refuse.
Maybe it will cost $20-30 billion, but if it also ups Apple's marketshare of computers (rather than tablets, smartphones and the like) used to 20-30%, it will have been money well spent. Of course, Apple won't be able to keep this up for too long, but the hope would be that the seeds once planted, will take root and remain.
Alas all of this runs contrary to Apple's modus operandi, but it doesn't sensible to me.
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