Apple Stock

Can you buy shares in a company when everybody knows the inside dope, that the corporation is firing on all twelve cylinders, that it is a fountain of innovative products?


I remember my old friend Robert, buying Disney stock after the company issued a stellar earnings report. Didn’t he want to wait for the dip? But before Eisner’s megalomania got the best of him, Disney just went up, the company was doing everything right when everyone else had it wrong.

Same deal with Google. Despite IAC and Yahoo’s efforts, Google’s share of search has only gone up, as has its share price. Is Apple going to continue to go up too?


Let us look at the drivers.

iPods. They’re synonymous with hand-held music players. It’s a generic moniker, akin to "Kleenex", but there’s really no competition. And you no longer have to pay a premium. There’s an iPod for every wallet. If you can’t afford a $79 Shuffle, then you’re homeless. Actually, many consumers have multiple iPods. The big capacity one for travel, and the Shuffle or Nano for exercise. And if you believe that music is going mobile, as in wireless, as in cell phone, Apple’s got a solution there too. Not only are iPhone sales red hot, the device represents a pathway to the future. Therefore, the stock has legs, it will not dip.

Then there’s the Mac. Dedicated users know that Leopard was not ready for release. Steve Jobs rushed it out to avoid missing the deadline twice, disappointing analysts. But analysts tend not to use Macs, they had no idea that in many cases Time Machine didn’t work after installing Leopard because the OS couldn’t communicate with attached FireWire drives. Comb the Net, the number of people with Leopard installation problems is legion. Furthermore, certain "improvements" were actually steps backward. The 3D Dock, the glowing ball open app indicator within said Dock… Leopard ain’t Vista, it ain’t a piece of shit, but it’s not Tiger either, a rock solid operating system that never crashes with amazing utility. Supposedly, the next update, due in January, will solve some of Leopard’s problems, but this hiccup by Apple is significant. It raises the question whether the company has enough engineers.

But, as stated previously, most analysts, most drivers of the stock, don’t know about Leopard’s problems, so the stock has not been hurt. Furthermore, like a baseball fan who can’t believe Roger Clemens took steroids, the Apple faithful are still selling Macs. This is the phenomenon, not the iPod or the iPhone, but the rapidly increasing Macintosh installed base. Not in business, but in the consumer world. The combination of the iPod and evangelizing by the faithful has not only made the Mac a reasonable choice, but in many people’s minds the ONLY choice. New users want the iTunes/iPod usability. And the Mac is cool. So, they want to join the club.

And this brings us to Macworld. This January, Steve Jobs is going to release more desirable products. Rumor has it, a flash-memory based tiny laptop is finally ready for prime time. The cognoscenti, the intelligentsia, are going to snap this thing up immediately. Then, there will be the 3G iPhone.

The iPhone success is stunning because those who buy it are not BlackBerry users, they’re new to SmartPhones. And they too are evangelists.

Apple is everything the record companies are not. It has a great bond with its customers, and its products are desirable hits.

Apple is the new IBM, crossed with Mo Ostin’s Warner Brothers Records and BMW. The polish upon the fruit is amazing. Don’t be a naysayer, get on board. Just like all the companies who make iPod accessories. Most shareholders are not aware of the company’s future roadmap, and the products in the pipeline will only dazzle them upon release.

When I told you to buy Apple a year ago, it was under $100. Today, in the afternoon, the stock eclipsed $200, closing at an all time high of $198.95.

So what have we learned here?

Success is not about consensus. It’s about excellence. One charismatic, draconian leader is worth more than a boatload of consensus builders.

Marketing is no longer king. Great products not only sell themselves, those who purchase them sell them too.

People want to align with a winner. And when stars are sold out to corporations, people would rather believe in the unsullied products of the corporation itself.

This is not Facebook, Apple is no longer run by a mercurial twentysomething unskilled in business, rather it’s ruled by someone twice that age who although mercurial, is now experienced, he’s learned from past mistakes.

The consumer is king. Apple plays not to the business community, but end users. Its online help is the best in the business. "Consumer Reports" rates not only its products the best, but its service. You can buy a PC for under $500, but people will pay more for a Mac, because they want functionality. Apple sells no crippled products, no sports cars with four cylinder engines.

If you play the market, and I don’t, I possess not a single share of Apple Inc., buy stock. It will probably dip after Jobs’ speech at Macworld, it always does, when insane product expectations are not met (flying computerized cars anyone?) But then, it always bounces back. Recently, within twenty four hours. CONSIDER THIS A HEADS-UP!

This is a read-only blog. E-mail comments directly to Bob.