Wednesday, January 14, 2009

Time To Sell Apple

No, not all at once. I will be looking for action, trying to figure out trend. But sell I will.

I'm holding Apple (AAPL) since 1999. My greatest pick ever. I started having some doubts last May, wrote about it here. Those reasons are still valid. Apple is becoming almost mainstream in computers, iPod is so mainstream it's hard to see any growth there.

Of course, Apple is a great company. It has great products and religious following among customers. It has great balance sheet: $25 billion of cash and short term investments is a nice pile to have, especially now, when cash is the king.

But there is one problem with Apple which is becoming way too important. Steve Jobs is the Apple. Without Steve, this would be a completely different company. There will be nobody to say about new product "There is no sex in it!". There will be no stop to so-so products which will be released just because it's time for Christmas sale, or MacWorld, or something else.

Steve is seriously ill. I wish fast recovery and excellent health, I wish him live long and happy life. I hope he spends more time at Apple torturing developers and bringing great products to us.

But I don't invest on hope. Health of Steve Jobs is not private matter, not when he is the soul of Apple. We never had good information since his cancer scare. Jim Cramer says that accounting irregularities mean "sell". I say that any information irregularities mean "sell". I am selling at least half of my position on Thursday. Remaining part will be sold depending on action, but no later than May.

I always claim the right to be wrong. I can be wrong about Apple. Company can stay great without Steve. Maybe. If I see something to change my opinion, I will buy Apple back.

Full disclosure: at the time of publication author had a long position in AAPL. Positions can change any time.

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1 comment:

Anonymous said...

Mr. Filinov's expression in the photo on the Seeking Alpha site is rather telling in itself. Does he not appear more than a little smug? His writing sounds that way as well.

"Steve Jobs is Apple" has been the rather shrill chorus from the less-informed press for some time now. Sure, why not pile on? "Everybody" loves to hate Apple, or exaggerate even the most ludicrous of rumors. Making provocative, albeit silly, statements is a proven way a good way to generate web site traffic; ergo income for anyone with a keyboard and an internet connection.

Do the "Steve is Apple" crowd _really_ believe that Jobs is doing everything on his own? As my octagenarian mother said, "They are insulting everyone else at Apple!"

Here's the latest news flash: "Jobs did not act alone!" Gasp!! That's right, folks. Neither iMac, nor iPod, nor OS X were created by one man alone!!!

Take a moment to catch your breath and recover from that shocking, yes, shocking! revelation.

Anyone who's ever applied for, or gotten a corporate job (outside of the stores) can tell you that it's a rigorous process. Several higher level engineers and product managers agreed, "It took me almost 3 years to get in." The hire the cream of the crop, people. Always have. Most are perfectly capable of doing their work without their revered/reviled leader. Imagine that.

Yes, Jobs has re-shaped the company, and influenced the "look and feel" of Apple's products. In the 10+ years since he's been back at Apple, isn't it possible that more than a few capable folks there have either joined to support the "insanely great" products, or have learned the routine by now?

See the Forbes article, "The last time Tim Cook ran Apple."

I'll be waiting for the panic to die down, and will be _buying_ Apple shares at a significant discount.