I was never an Apple perma person. I was never that guy at the cocktail party that subtlety let his fifty dollar cost basis just slip out. Probably much to my own detriment. I am just not a buy and holder, obviously Apple was that exception. Maybe it still is.
I am not a nerd or a geek, and I’m not the first guy to buy a new Apple product at the Apple Store and I hate lines. My family owns two Macs, two iPods and two iPhones. My wife and I are biting the bullet with two pathetic Blackberry Curves, but they will be in the wood chipper in three weeks when our contracts are up and we buy two more iPhones. I still look at everything through the eyes of the market though.
Apple to me is the greatest story ever told. Google and Facebook can go take a number in my “hierarchy of greatness” sweepstakes.
It is true that the current bid in the after market implies that Apple is trading at like twelve times earnings and maybe less on a forward basis, but the market wants innovation. Steve left the planet and also left a few years of blueprints for Apple, or at least that is what is reported. I hope the guys in the cubicles can make great hay with that. Those blueprints are more valuable than The Shroud of Turin.
Apple’s cash position means nothing to me, I could care less, I care (and so does the market) about innovation. Intel and Microsoft have tons of cash. Will Apple still be able to innovate without Jobs? Today’s number was soft and yes I know the next quarter will be strong because the new iPhone will sink in to revenues, but I promise you that the market will demand more from Apple. They will demand and expect constant off the chart innovation. I hope they can still complete the task with that three year blueprint, because the market wont wait that long. Not for Apple. Yeah I know it was one bad quarter, but Jobs was Apple. I just feel squishy going forward.
Apple can still go higher, don’t get me wrong, the multiple in here is nothing compared to some of the frauds that trade publicly, but they need to create and innovate or else future earnings reports will be tepid at best.
My honest worry is that Apple is on its way to becoming a cash rich value play. If that is the case then the chapter ended along with Steve Jobs. You are never too big to fail or get really boring. Hope I’m wrong. I will still trade the stock all the time. I would never pick a fight with Jobs, with Cook I’m not so sure. Good luck.
P.S. If I was constructing a portfolio, $AAPL would be in it. Comments welcome.