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Unfathomable, but Someday.........

Tim Knight from Slope of Hope's picture




 

I'll begin with my usual Apple-exclusive caveats.........I worked there for years......... I bought my first Mac in early 1984......... I bought the iPhone on its release date......... as well as the iPad........ Steve Jobs is my lifelong hero, long before most of you ding-dongs even knew who he was.......and so on.

Having said all that, take a moment to look at this chart:

0820-aapl

I have been quite vocal with a target of $735 (plus or minus a few bucks -- unless it falters, in which case I will be jumping with joy), which for a permabear like me, shows how strong I feel about this company's momentum.

However........

One day - - maybe in a month, a year, a few years - God knows - - - Apple is going to make the first in a series of stumbles. I cannot conjure what kind of epic screw-up Apple would have to make in order to surrender its firm grasp over Earth, but there is no such thing as a company that thrives and dominates until the end of time.

If you had told anyone in 1997 that Apple would be the largest and most respected (and feared) company on the entire planet, you would have been prosecuted for murder since people would have died laughing.

Likewise, today, if anyone were to suggest that there will come a day that Apple will be seen as long past its prime - - perhaps even a fallen great - - you would like equally mocked. It seems completely ridiculous.

I say again, I have no earthly idea what kind of series of mistakes Apple could possibly make to lose its way. At this point, only if every iPhone manufactured were found to explode unexpectedly and fatally, there's no way Apple is going to lose its place on the pedestal.

But it'll happen. Someday. It'll be interesting to see when and why.

 

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Mon, 08/20/2012 - 20:01 | 2722148 buzzsaw99
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It isn't just the phone. Their customers have to buy everything everytime it comes out. new ipad, ipod, iphone, whatever. even gubbermints are buying a ton of ipads. will they all keep buying new ones every year or two or will they realize it was an overpriced fad + scam at some point?

Mon, 08/20/2012 - 21:05 | 2722281 Almost Solvent
Almost Solvent's picture

And if the new connector is true, then these iDiots will have to spend more fiat to upgrade ALL their docks & adaptors.

Mon, 08/20/2012 - 17:54 | 2721854 atomicwasted
atomicwasted's picture

Any company whose mantra is "ship it shitty" (Guy Kawasaki - look it up) can't sustain a share price this high.

Mon, 08/20/2012 - 21:47 | 2722362 i-dog
i-dog's picture

Correction: Any company whose success was built on the vision and attitudes of one man (Steve Jobs - outstanding 12 point summary by Kawasaki here: http://news.cnet.com/8301-13579_3-20117575-37/what-i-learned-from-steve-jobs/) who's been replaced by a committee of technocrats ("a camel is a horse designed by a committee") can't sustain a share price this high.

Apple is/was Steve Jobs. RIP Steve Jobs. Imminent RIP Apple.

Mon, 08/20/2012 - 17:34 | 2721785 css1971
css1971's picture

Noo bubble there then.

Samsung is Apple's nemesis. I see the word everywhere I look.

Mon, 08/20/2012 - 17:20 | 2721749 wang (not verified)
wang's picture

from one of the ding dongs who clicks for some unfathomable reason on your posts

"Steve Jobs is my lifelong hero"

 why not just tell everyone that you proudly display an image of the HMS Zong above your fireplace

 

 

Mon, 08/20/2012 - 17:04 | 2721699 JohnKing
JohnKing's picture

I bought AAPL at 8 and change in 1990.

 

later sold at 12 after some macworld expo spike...

 

can you feel my pain?

Mon, 08/20/2012 - 17:52 | 2721850 atomicwasted
atomicwasted's picture

50% profit is nothing to sneeze at.  Well played!

Tue, 08/21/2012 - 01:49 | 2722906 Uncle Remus
Uncle Remus's picture

It was 1 share.

Mon, 08/20/2012 - 17:49 | 2721597 Zero Govt
Zero Govt's picture

"One day... Apple is going to make the first in a series of stumbles..  I have no earthly idea what kind of series of mistakes Apple could possibly make.."

One day Tim, your house is going to fall down. It probably won't be one single event but one brick crumbling after another.. a series of structural decay.

Ok that's the 'news' for the day.. now back to you watching paint dry and having no clue how it happens (please don't take this as a cue for another dull article)

PS. is this your 1st article in journalism?

PPS. My advise, pack up, go home, don't write again

Mon, 08/20/2012 - 15:56 | 2721481 mumbo_jumbo
mumbo_jumbo's picture

what's gonna bring apple down is most are gonna realize that buying a new phone every year is a wast of money and then the REALITY of how poorly they are constructed will come home to roost.   my sons phone calls me 3 times a day and he has no idea why and tells me his friends phones do the same.....and it's about 1/2 as fast as it used to be...at 15 months old.

APPLE = the mother of all shorts.

Mon, 08/20/2012 - 15:50 | 2721464 DavidC
DavidC's picture

Isn't this the same Apple that missed on its results a month ago?

DavidC

Mon, 08/20/2012 - 15:11 | 2721322 ebworthen
ebworthen's picture

With Steve Jobs gone, Apple is teetering on a giant precipice.

They may be able to balance there for a time, but without Steve I kind of doubt it.

Mon, 08/20/2012 - 14:48 | 2721255 Papasmurf
Mon, 08/20/2012 - 14:49 | 2721251 becky quick and...
becky quick and her beautiful mouth's picture

the main selling feature of the iphone, at least for me, is that it is designed out of the box to synch with my laptop's email account, files, etc. via me.com. i don't have to do anything other than enter a username and password, and everything on my phone magically ports itself over to my computer and the cloud. android does not do this in 2 seconds out of the box. you can do it, but there's a lot of dicking around with 3rd party apps, etc. with apple, it's done.

Mon, 08/20/2012 - 19:13 | 2722004 Tippoo Sultan
Tippoo Sultan's picture

"Dicking around"

Rebecca ! Sugar shame ! Such a potty mouth for a lady. What would Uncle Warren have to say ?

http://1.bp.blogspot.com/_F-2ybd60FlE/SHTNwT0hYwI/AAAAAAAADVk/C5Yrt48Fyy...

Mon, 08/20/2012 - 15:58 | 2721483 Uncle Remus
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Your government thanks you for your cooperation. And it's not magic, it's stupid electron tricks.

Mon, 08/20/2012 - 21:02 | 2722274 Almost Solvent
Almost Solvent's picture

It's the difference between folks who will pay extra for "full service" vs. those who enjoy the savings of DIY - and that's the target market for Apple products, locked into their ecosystem. 

Mon, 08/20/2012 - 14:31 | 2721199 Tango in the Blight
Tango in the Blight's picture

I thought about buying Apple stock back in 1996 but didn't. If I had and still would have had it I would have sold it when Steve Jobs died.

Mon, 08/20/2012 - 14:03 | 2721105 Centurion9.41
Centurion9.41's picture

Tim, how about you put that on a log based chart.  The one posted makes you look like a Wall Street Snake Oil Salesman marketing to his ... marks.

Mon, 08/20/2012 - 14:35 | 2721205 centerline
centerline's picture

Log based charts warp people's thinking.  Makes bubbles look less bubbly.  Like asking for bad statistics.  Thanks, but no thanks.

Mon, 08/20/2012 - 15:09 | 2721313 Centurion9.41
Centurion9.41's picture

Wow, are you really that ignorant?  Log charts create correct relationships, if one uses the correct base.  

As for "bubbles look less bubbly" in log based charts, no they don't.  True bubbles look like bubbles.  Go look at a long term chart of the Dow; you'll see the real bubbles and crashes very clearly.

And you'll see the bubble in APPL, clearly. 

Mon, 08/20/2012 - 16:57 | 2721623 centerline
centerline's picture

"A logarithmic scale is a scale of measurement that displays the value of a physical quantity using intervals corresponding to orders of magnitude, rather than a standard linear scale."

"Orders of magnitude" is the operative concept.  Both linear and log have a place in trading.  But...

The graphical difference on the Y-axis stands out more pronounced in linear format... which is more CLEAR to the average person as opposed to a log scale.  Hence, why Tim most likely chose a linear scale for his post.  It is more DRAMATIC.

Edit - you are thinking too much like a trader and missed the point.

 

 

 

Mon, 08/20/2012 - 20:19 | 2722192 Centurion9.41
Centurion9.41's picture

Wow, you really dont get it do you.

First of all, I know the definition of log scale; hence my refering to the "base". 

And yes, I know Tim's point was to be dramatic.

But that's the problem. 

That's what Snake Oil Salesmen and politicians DO. 

They paint "pictures", e.g. charts, that do NOT reflect reality but rather as they want their "marks" to see things the way they want their mark to think.

ANY, any long period chart that is NOT drawn to a log/% scale Y-axis, and not reasonably scaled in time along the x-axis, is created that way to SELL the mark something.

Want the proof, ask them to include a log/% scale chart in the piece so people can compare "realities".

The reason talking heads on CNBC, sellers of "financial services" and Wall Street marketeers do not do such an easy thing is simple.  The perception they are trying to get you to buy into will be hurt by their doing so.

You Centerline are off-line and missing the point you should be seeing.

Stop drinking the Kool-Aid kid.

 

Tue, 08/21/2012 - 11:24 | 2723874 centerline
centerline's picture

The differences between statistical methods, charts, etc. are used more often to persuade.  Mark Twain's famous quote comes to mind... something about "lies, damned lies, and statistics" - lol.  You and I both agree on this it seems

However, I analyze data for a living.  Every chart has merit in some way.  Different perspectives for different reasons.  It ALL forms a more complete picture of reality if used in proper context.  Linear scales are not so good for most trading activities.  However, acting like linear scales are only for snakeoil salesmen is foolish.  Even in trading, this would be akin to driving with blinders on.  

Mon, 08/20/2012 - 14:03 | 2721103 alien-IQ
alien-IQ's picture

I wouldn't touch the stock at this price simply because it's out of my comfort zone...but the company is far from done. They still have room to grow. Lots of room.

Mon, 08/20/2012 - 13:43 | 2721028 Arnold Ziffel
Arnold Ziffel's picture

The Lucent soaring curve once looked like that...until it didn't.

Mon, 08/20/2012 - 14:05 | 2721112 alien-IQ
alien-IQ's picture

There's at least $100 billion in cash difference...and that's just the starting point.

Mon, 08/20/2012 - 13:41 | 2721016 adr
adr's picture

The first stumble will be the iPhone5. The product will never live up to the hype. You could make the case that the iPhone4 was the best smartphone available when it launched. But it was rapidly taken over by entry level Android phones. LG and Samsung have phones offered by carriers for $1 that beat the iPhone4 in every aspect, other than subjective design.

The iPhone5 needs to be a god phone to trump the other offerings in the market, and has to be light years beyond the iPhone4 to get the majority of users to upgrade. If the design is a step back, the product will fail.

Apple has become a lifestyle product. Actual use of the product has become secondary to the mere fact of holding it. Lifestyle products come and go in cycles. At one time everyone has one, the next nobody has one. If everyone has something, it isn't cool anymore.

Remember Starter apparel, MySpace, son to be Facebook or any number of fads. Apple is a fad product now. The youth believe they need to have Apple to be cool. Once the trendsetters dump Apple to seperate from the loser followers, the company is toast. Or at least the $700 share price.

When a 13 year old tells you Apple is cool, but can't tell you why and responds cause it is, the writing is on the wall.

Mon, 08/20/2012 - 17:37 | 2721804 css1971
css1971's picture

The word you are looking for is "iFad".

Mon, 08/20/2012 - 16:00 | 2721487 Oldballplayer
Oldballplayer's picture

If what I have heard about them changing the connection size...something that probably costs them pennies, it will piss off a lot of college aged kids.  And their loyalty is suspect to begin with.

 

For lack of a connector....the great empire shall fall.

Mon, 08/20/2012 - 20:55 | 2722265 Almost Solvent
Almost Solvent's picture

But from their view high up in their Cupertower, the new connector makes ALL the business sense in the world since you have a captive market segment that now HAS TO BUY ALL NEW APPLE CONNECTORS - for the house, the car, the boat, the office, the train, etc, etc, etc.

 

Apple is finding out that you have to give away the razors to sell the blades . . .  

Mon, 08/20/2012 - 14:03 | 2721104 DCFusor
DCFusor's picture

Most of their stuff can't and doesn't live up to the hype.  It never seemed to matter all that much for either Apple OR microsoft - people bought the next version in the vain hope that the old bugs would be fixed until...well, still.

I think the stumble has already begun with their irrational "going nuclear" on anything android in court.  There are already boycots, and fanbois jumping ship over a company that no longer innovates, but just litigates.

Once you get to a certain size - you can't keep up a growth rate anyway.  No new customers, you already have 'em all.  We're getting there now.

 

Mon, 08/20/2012 - 13:57 | 2721080 centerline
centerline's picture

Not to mention reality that is at some point reality bound to assert itself.  The fact that the economy is still so bad for so many only shows how much of a lifestyle product these things have become.

 

 

Mon, 08/20/2012 - 13:37 | 2720996 centerline
centerline's picture

What's the business model going forward?  And remember that Steve is pushing up daisies.

At some point Apple could invent a cure for cancer and still would not impress the market.  Expectations are everything and the bar keeps getting raised.

Cram a few more folks in this barn, and the smallest of fires is going to end in a disaster.

By the way, I bumped into a nieghbor the other day who went on to tell me all about the virtues of Apple products.  He as Apple phones, Apple computers, Apple TV, Apple Tablets... probably wearing underwear with Apples on them.  He swore that Apple stock is going to the moon simply because Apple is the greatest thing since sliced bread and breathable air.  To me, this means the party is over soon.  The little guy is ripe for the picking.  None different another neighbor of mine who told me how he was going to start flipping houses (this was sometime in late 2007).

Mon, 08/20/2012 - 14:09 | 2721128 Matt
Matt's picture

On the other hand, Egypt ran for thousands of years under the Pharoahs as a theocratic state. Science has shown that when an Apple Fanatic makes a new purchase, it lights up the same part of the brain as people having a religious experience. If you view Apple as a religion rather than a corporation, it looks like it could have quite a bit of longevity. 

Mon, 08/20/2012 - 14:29 | 2721179 centerline
centerline's picture

The pace of society, information, progress, etc. moved at a snail's pace back then.  Religion turns on a dime now.

Plus, the same feedback works for most consumer purchases.  People have been conditioned over the last few decades to associate self-worth and happiness with objects instead of relationships or accomplishments.  That is the current western religion.

Mon, 08/20/2012 - 13:32 | 2720980 SmoothCoolSmoke
SmoothCoolSmoke's picture

I grew up in Pittsburgh in the 60's.  At that time US Steel was the largest and most powerful company on earth.  If you had said that by 1980 US Steel would be virtually gone...... they would have dropped a net over you.

Mon, 08/20/2012 - 20:50 | 2722250 Almost Solvent
Almost Solvent's picture

Standard Oil was once the ONLY source of liquid hydrocarbons in the USA . . .

Mon, 08/20/2012 - 13:23 | 2720942 Uncle Remus
Uncle Remus's picture

Isn't the fall of Apple a sign of the End Times?

Mon, 08/20/2012 - 16:35 | 2721565 Zero Govt
Zero Govt's picture

no that'll be the busting of the public sector bubble

when Govt 'pops' you'll be amazed how many other bubbles pop around our society, how rigged and suffocated our economy is by Govt and its corrupt cohorts 

everything from propped up utility monopolies, energy monopolies (particularly Big Oil), Big Education, Big Pharma, Big Healthcare, Big Industry (military, GE etc etc), Big Retail of course Big Banks and 'pop' goes the protection rackets of Microshite, Goofball and others wholly dependent on protection from the free market and small competitiors

Bring It On ..Stop Paying Your Taxes

Mon, 08/20/2012 - 16:49 | 2721630 Hobbleknee
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If you had a newsletter, I would subscribe to it.

Mon, 08/20/2012 - 13:22 | 2720935 dolph9
dolph9's picture

AAPL's a bubble, period.  Everything could go right for the company, and the bubble will still pop and Wall Street will laugh and the muppets will get fleeced.

Remember, all of this fake capital is searching everywhere, anywhere, for any kind of yield which explains all of these repeated asset price bubbles.

Also remember that very little of this fiat has found it's way into the precious metals yet.

Mon, 08/20/2012 - 13:20 | 2720932 otto skorzeny
otto skorzeny's picture

slave labor really helps your margins

Mon, 08/20/2012 - 15:05 | 2721300 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

"Whip differently" ;)

Mon, 08/20/2012 - 14:05 | 2721111 Matt
Matt's picture

Don't worry, all those whinny humans will be replaced with robots that only need a few KwH a day to keep going with no complaints or rooftop dramatics. Then the margins will grow even fatter.

Mon, 08/20/2012 - 18:31 | 2721941 GFKjunior
GFKjunior's picture

We can only hope it happens sooner than later.

 

 

 

Adapt or die as they say.

Mon, 08/20/2012 - 14:14 | 2721148 Muppet Pimp
Muppet Pimp's picture

Humans are on the cusp of becoming obsolete.

Mon, 08/20/2012 - 13:09 | 2720893 Precious
Precious's picture

Macintosh for President

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