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"The Apple Conundrum": Why One Fund Is Not Buying The iKool-Aid

Tyler Durden's picture


Looking at the parabolic rise in AAPL shares in the past 3 months one would imagine that the company's product line up, so well telegraphed over the past several years, has changed, or at least has found a way to cure cancer, while expanding margins, and also providing loans to cash-strapped US consumers to buy its products exclusively. Truth is nothing substantial has changed - we have merely seen a ramp as every hedge fund and asset manager jumps on the Apple bandwagon (we fully expect at least 250 funds to hold Apple as of March 31: at least 216 were in the stock as of December 31 and then even Dan Loeb jumped in after) which is fun and games on the way up, but pain and tears when the bubble finally does pop. Many have attempted to warn the public about the latest manic phase of Apple expansion, but few have succeeded - such as the the reality of bubbles: they pop when you least expect them. Yet giving it the old college try, here is Obermeyer Asset Management's John Goltermann with an extended commonsensical approach to his perspective on the company with two main growth products, and why unlike everyone else, he is not buying the iKool-Aid.

Some excerpts from the letter:

Most members of the Obermeyer Asset Management team use Apple’s products and highly respect the company and its achievements. We recognize that it has built a cult-like following of both technophiles and ordinary users who aspire to own its latest and greatest gadgets. We recognize the elegance of its platform, the ease, convenience and life-enhancing attributes of its apps, the effortless delivery of media content and how it has even transformed entire industries. We recognize the style element of owning Apple devices, we recognize the status that people derive as Apple users and we understand the mystique the company possesses in the way it operates.


Given our shared appreciation for Apple as a company, why aren’t we making a place for it in client portfolios? We generally separate current and prospective investments into three broad categories: Yes, No and Too Difficult. In the case of Apple, we see this investment as Too Difficult. Let us explain:


With a market value of $550 billion, Apple now comprises 4.4% of the S&P 500 index and, all by itself, is larger than the entire utilities industry. With 932 million shares outstanding, every dollar move in Apple’s share price represents nearly $1 billion in net new capital flowing to its shares. For context, the median company size of those in the S&P 500 is $12 billion, so a 2% move in Apple’s stock is the equivalent of adding a whole new company at the median value to the index.


Since December 31st, Apple’s market value has increased by $172 billion, which is roughly the size of Johnson & Johnson, a large, well-established, innovative healthcare and consumer products company with a 125-year history. Johnson & Johnson has enjoyed many successes, has reinvested high levels of profit and is investing to expand its divisions, products and businesses. Apple attracted the same amount of investor capital in two and a half months that Johnson and Johnson attracted in its entire 125-year history.




Apple launched its first iPad in April 2010 and is now on its 3rd version, so the iPad has about a two-year shelf life for the company (it might milk a few more years out of each version, but the company’s business model is to continually launch new product iterations and slash prices on the older versions). Though it’s not disclosed in the financials, a guess would be that the new iPad will sell 26 million units its first year and 14 million in its second. If each version of the iPad earns $260 per unit, then Apple investors can expect somewhere in the range of $10 - $15 billion in total pre-tax profit for this newest version of the iPad. Unless investors thought Apple’s stock was way too cheap before the new iPad announcement, they seem to be expecting much more value to be delivered to shareholders from the iPad launch than can be reasonably be delivered by sales of the iPad device itself. The $172 billion increase in the company’s value far exceeds the approximately $15 billion that will come from the iPad, so it will have to come from something else. We don’t know yet what that “something else” is.


When we look at our cash flow models, assuming Apple can maintain its current operating margins (a heroic assumption in the face of increased competition in the tablet market), to justify the current stock price, it appears to us that Apple will have to sell about $2.6 trillion worth of total products and services over the next ten years. Last year’s revenues (for the fiscal year ending 9/24/11) totaled $108 billion. If Apple’s margins shrink, it will have to sell a lot more. This level of Apple product sales will make up almost 1.5% of U.S. GDP (of course it  also sells products outside of the U.S.). That means that with the average GDP per capita in the United States being around $50,000, each person must spend $750 on Apple products and services annually (since 30% of sales are domestic, this means that about $225 per U.S.  citizen would go to Apple every year). Since not all 310 million people in America use Apple, those who do need to spend a lot more and the vast majority of those sales will need to be on devices because iTunes sales do not bring much profitability.

Like we said: no stories here. Just common sense.

Full letter (pdf)



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Thu, 03/29/2012 - 11:30 | 2300744 Buckaroo Banzai
Buckaroo Banzai's picture

This market is narrowing down to a point, and Apple is the point. When Apple breaks, LOOK OUT BELOW.

Thu, 03/29/2012 - 11:33 | 2300753 a growing concern
a growing concern's picture

Will its descent speed be approximately 9.8 m/s2?  Accounting for air resistance, of course.

Thu, 03/29/2012 - 11:37 | 2300768 SilverDOG
SilverDOG's picture

Applesauce Bitchez!

Thu, 03/29/2012 - 11:52 | 2300829 tmosley
tmosley's picture

Jackie, it's hunting season.

Thu, 03/29/2012 - 11:58 | 2300844 NotApplicable
NotApplicable's picture


I just went to and saw Professor Fekete listed as a recent donor for the current money bomb.


Thu, 03/29/2012 - 12:05 | 2300867 Ahmeexnal
Ahmeexnal's picture

John Galt also donated.

Thu, 03/29/2012 - 12:17 | 2300892 markmotive
markmotive's picture

A lot of euphoria around this company.

Some nuggets of info:

  1. Market cap is larger than XOM. Bigger than WMT and MSFT combined.
  2. Many investors are too optimistic about forward growth.
  3. Price is well-above 200-day moving average.

Thu, 03/29/2012 - 14:33 | 2301359 SAT 800
SAT 800's picture

Short it right now. This is what bubbles look like;and this is where they come from; public enthusiasm.

Thu, 03/29/2012 - 11:58 | 2300846 Levadiakos
Levadiakos's picture

open wide teabagger "O"

Thu, 03/29/2012 - 12:28 | 2300930 Carl Spackler
Carl Spackler's picture

"Applesauce" is the best term I have heard.

The numbers comprising the fundamentals are astounding.

The business model of Apple seems to have been infected by a worm...the fact that batteries can not facilitate more tablet technology without cooking the device into an apple pie.

Thu, 03/29/2012 - 15:41 | 2301569 Spastica Rex
Spastica Rex's picture

+1 extremely clever

Thu, 03/29/2012 - 20:34 | 2302378 RussellChester8
RussellChester8's picture

my friend's sister makes $74/hr on the computer. She has been out of a job for seven months but last month her check was $17871 just working on the computer for a few hours. Read more on this site ....

Thu, 03/29/2012 - 12:20 | 2300907 gcjblack
gcjblack's picture

Will Apple be limited to falling due to gravity alone, at 9.8 m/sec^2 ?

Once it starts down, powered flight ( all engines with full after-burners spooled up to maximum thrust) will permit much higher velocities to be achieved as it flies towards a new Ground Zero.

Thu, 03/29/2012 - 12:41 | 2300970 PersonalRespons...
PersonalResponsibility's picture


Thu, 03/29/2012 - 13:28 | 2301134 poor fella
poor fella's picture

Imagine the Apple logo on WTC Building 7 then?

Thu, 03/29/2012 - 12:10 | 2300882 patience...
patience...'s picture

Absolutely, it's the best of a bad situation.

In the meantime the  "Obermeyer Asset Management " has been missing out on some major returns.


Thu, 03/29/2012 - 15:05 | 2301464 jcaz
jcaz's picture

not really, because most knuckleheads in this deal won't sell until it's back down to $150-  seen this movie before, always ends the same way.....

Thu, 03/29/2012 - 12:33 | 2300929 vast-dom
vast-dom's picture

Common sense Ty? If there were any Apple wouldn't be valued anywhere near this utter bs! 

this stock is literally double its true price. and the experts are still pushing it. i could give a shit about their expert opinions when the stock tanks.

Thu, 03/29/2012 - 11:32 | 2300747 a growing concern
a growing concern's picture

My iPhone cures cancer, doesn't yours?  

Thu, 03/29/2012 - 11:42 | 2300783 brewing
brewing's picture

they're going to have to do something about cost to wireless carriers.  the majors lost their ASS last year selling it.  i work in the industry, and have been hearing whispers that 1 or more may drop apple products...

Thu, 03/29/2012 - 12:12 | 2300889 patience...
patience...'s picture

Wispers my ass, shoot yourself in the foot by dropping your mayor player, laughable.

Thu, 03/29/2012 - 15:44 | 2301574 Spastica Rex
Spastica Rex's picture

English isn't like Latin. "Js" don't sound like "Ys."

Thu, 03/29/2012 - 12:29 | 2300906 iDealMeat
iDealMeat's picture

+1,  the iPhone is a squid, sucking margin monthly.. Drop it or die..  Sprint is about to fold..

Thu, 03/29/2012 - 12:37 | 2300961 brewing
brewing's picture

this paints the picture pretty well.  in the end, the consumer is the loser everytime...

Thu, 03/29/2012 - 14:35 | 2301365 SAT 800
SAT 800's picture

Short it; do it right now; make the market pay you. I'm sincere; it's ripe.

Thu, 03/29/2012 - 14:58 | 2301445 geewhiz190
geewhiz190's picture

how do wireless carriers lose money when the cost of running one of those ipads is an arm and a leg? i would think their revenues would be up based on data demand.

Thu, 03/29/2012 - 11:46 | 2300797 t_kAyk
t_kAyk's picture

My blackberry causes cancer

Thu, 03/29/2012 - 11:51 | 2300817 tocointhephrase
tocointhephrase's picture


Thu, 03/29/2012 - 11:33 | 2300751 Stuck on Zero
Stuck on Zero's picture

They used to say: "No one ever got fired for going with IBM." 

Thu, 03/29/2012 - 11:49 | 2300818 Kayman
Kayman's picture

And Harold Geneen built a pulp mill where there were no trees.

Beware thine own press clippings.

Thu, 03/29/2012 - 11:52 | 2300830 GeezerGeek
GeezerGeek's picture

Many IBM mainframes in the early 80s needed water cooling. I hear that the new Apple product gets a bit warm, too. 

Thu, 03/29/2012 - 12:10 | 2300878 GMadScientist
GMadScientist's picture

The homeless gadget collector considers this a feature; transferring energy from the socket at the Starbucks to the device for cozier latenight napping.

And my overclocked i7 is water-cooled what? ;)

Thu, 03/29/2012 - 12:07 | 2300871 Ahmeexnal
Ahmeexnal's picture

And you don't need a PhD in fuzzix to figure that one out.

Fri, 03/30/2012 - 17:34 | 2304976 Sokhmate
Sokhmate's picture

Fuzzix: physics of the alternate universe. Just fyi for the not-knowing.

Thu, 03/29/2012 - 13:07 | 2300759 Mercury
Mercury's picture

Stay away...but short a cult stock at your own risk.

In any case the easy money has been made and the rainmaker is gone.

The "life-enhancing attributes" of Iphone/pod apps is a bit of a stretch too...kiddie-crack for the most part.

Thu, 03/29/2012 - 14:36 | 2301370 SAT 800
SAT 800's picture

The risk is always limited with a stop loss order; the chart looks like its ripe to me. You can't win if you don't play.

Thu, 03/29/2012 - 11:35 | 2300761 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

It's only pain and tears if you're still holding it on the way down. I think we'll know when the bubble's popped. Until then, please keep buying Apple stock and Apple toys.


Thank you.


As you were.



Thu, 03/29/2012 - 11:45 | 2300794 SheepDog-One
SheepDog-One's picture

Keep buying Apple stock please, retail sucker, er I mean Apple genius...because someone dumber is trying to sell Apple stock....heh heh.

Thu, 03/29/2012 - 12:18 | 2300902 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

You must feel so smart being a contrarian. Now be a good mutt and roll over.

Thu, 03/29/2012 - 11:35 | 2300764 alexwest
alexwest's picture

why would this guy think he is smarter than rest of ? can I see his trading record ? is he Soros/Buffet/Paulson/etc kind of guy? or just missed THE THING..

and yes Apple is bubble , and will end in tears, but nobody knows then


Thu, 03/29/2012 - 11:44 | 2300791 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

You spelt it wrong. Not Soros, it's Gorog.





Thu, 03/29/2012 - 11:46 | 2300799 SheepDog-One
SheepDog-One's picture

I dont know if he trades based upon insider info like Soros and Buffet.

Thu, 03/29/2012 - 11:36 | 2300765 zuuma
zuuma's picture

Apple 2012 = Tulip Bulbs 1636

Thu, 03/29/2012 - 11:43 | 2300788 AN0NYM0US
Thu, 03/29/2012 - 11:40 | 2300774 monopoly
monopoly's picture

"Common Sense". Please, this is the stock market. That phrase is banned here. Oh well.

Thu, 03/29/2012 - 11:44 | 2300790 dick cheneys ghost
dick cheneys ghost's picture

Is Apple a Chinese Company?

Thu, 03/29/2012 - 11:44 | 2300792 CClarity
CClarity's picture

Better have a lot of pesticides . . . can't let a worm get into apple.

Thu, 03/29/2012 - 11:45 | 2300796 JustObserving
JustObserving's picture

With apple stock you can buy all the silver bullion in the world 17 times over.  Or about 1/6 th of the gold bullion in this world.

Thu, 03/29/2012 - 12:04 | 2300865 Overflow-admin
Overflow-admin's picture

The AAPL:SILVER ratio says it's time to sell your AAPL shares for physical, bitchez!

Thu, 03/29/2012 - 11:48 | 2300805 SheepDog-One
SheepDog-One's picture

As a general rule, I say 'No thanks' to bubble mania stock ramps and sleep better. 

Thu, 03/29/2012 - 11:48 | 2300807 KandiRaverHipster
KandiRaverHipster's picture


Thu, 03/29/2012 - 11:51 | 2300823 Aunty Christ
Aunty Christ's picture

Folks, Apple is a consumer products company, subject to the whims of its customers. There was a time when its products were out of fashion. They are hot now. There'll be a time when they are not cool anymore.

Thu, 03/29/2012 - 12:00 | 2300851 Conman
Conman's picture

i keep thinking the same, but it seems like apple is that attainable luxury item these days. Kind of like Coach bags. They are kind of expensive but not really out of reach for the avg consumer. So until it loses that status itll keep selling although Android tablets and phones od the same for less money.

Thu, 03/29/2012 - 13:44 | 2301184 Buckaroo Banzai
Buckaroo Banzai's picture

Apple's products were out of fashion 15 years ago because they weren't that good. They've fixed that problem.

No, Apple will crash when they saturate their market, and can't launch new products quickly enough to make up the difference. Which isn't too far off.

Thu, 03/29/2012 - 15:54 | 2301610 Spastica Rex
Spastica Rex's picture

I will take issue with this. DISCLOSURE: I fucking hate Apple.

15 years ago System 7 was what Macs ran. It was far to what MS offered. I managed large installations of both; there was no contest. 15 years ago, MS was a juggernaut. Macs became eclipsed even in the education space. This was due primarily to marketing, and the tipping point that MS engineered.

I hope Apple dies; they are as evil as MS ever was.

Fri, 03/30/2012 - 05:33 | 2302880 vato poco
vato poco's picture

Agree on the inevitable 'ran out of cool new gadgets to sell and crashed' thing. IIRC, there was a time when Sony was going to own the world. Sony still makes good stuff, but...the cachet - and the stock - ain't what it once was.

Thu, 03/29/2012 - 14:04 | 2301264 rosiescenario
rosiescenario's picture

Please provide a date....on a lng enough time line....

Thu, 03/29/2012 - 11:57 | 2300831 JW n FL
JW n FL's picture

Newmont CEO on Gold Market, Peru Project Review

P.S. they are Hiring AROUND the World! and Can NOT! find enough people!

Thu, 03/29/2012 - 11:55 | 2300838 Village Smithy
Village Smithy's picture

They fiddled while Rome burned, we played "Angry Birds" while our nation became a debt slave.

Thu, 03/29/2012 - 11:55 | 2300839 CheapBastard
CheapBastard's picture

I never buy at the HIGH......


I'm a Cheap Bastard.

Thu, 03/29/2012 - 11:59 | 2300847 stickywicket
stickywicket's picture

this market is so narrow it is coming to the head of a pin! It's the pin head market:)

Thu, 03/29/2012 - 11:59 | 2300850 sojourner_man
sojourner_man's picture

Can you say -- spell -- B U B B L E ??

And they insist one can't spot a bubble before it pops!

Thu, 03/29/2012 - 12:00 | 2300852 NotApplicable
NotApplicable's picture

I got a new Acer tablet at work this week, and my iTouch is now collecting dust.

Thu, 03/29/2012 - 12:01 | 2300855 Dr. Engali
Dr. Engali's picture


Apple has a nice product and it's pretty cool ,but I also remember when there were lines to get the next version of Microsoft Office. Look at it now. It's at best a tolerated company.

Thu, 03/29/2012 - 12:02 | 2300859 beaker
beaker's picture

Reminds me of the Chairman of the Board listens to a report where every one of his managers tell him everything is so good that it can't get any better.

"Can't get any better?" he asks.

"That's right!"

"Excuse me for a moment, gentlemen.  I'll be right back."

Next the Chairman steps outside of the board room and calls his broker on his cell phone.  "Sell every fucking share of this company that I have!"

Thu, 03/29/2012 - 12:04 | 2300861 Widowmaker
Widowmaker's picture

I share the concerns of the author, with one exception.

AAPL is eating pie from literally every other technology company out there from hardware mfgs to cable TV operators.

It is no longer as high of function of product innovation being the driver going forth (short term) as much as competition collapse.


Thu, 03/29/2012 - 12:56 | 2301023 beaker
beaker's picture

True, but is that priced in at these levels?  Remember that (at least in what was once a normal world) stock prices today reflect the outlook 12-18 months in advance.

Thu, 03/29/2012 - 12:05 | 2300866 penexpers
penexpers's picture

We don’t know yet what that “something else” is.

Hmm, how about iTranshuman? You know those hipsters and trendies will augment themselves with iNanos to one and for all merge with the Apple's iHive.


Thu, 03/29/2012 - 12:06 | 2300869 WhOracle
WhOracle's picture

seems pretty obvious that something else is the true Apple TV set...

Thu, 03/29/2012 - 12:10 | 2300883 SoundMoney45
SoundMoney45's picture

Apple created the iPod to monetize the market Napster initially defined, and the iTunes store with Steve Jobs personally negotiating with the record labels. Apple created the iPhone by obtaining largely unconstrained phone behavior in exchange for exclusivity, again something Steve Jobs personally negotiated. A third, and perhaps a fourth industry redefining products appear to be currently priced into Apple.  That said, buying Apple now and watching it fall to 300 is still a better investment than non-ECB owned Greek bonds.  

Thu, 03/29/2012 - 12:12 | 2300887 devo
devo's picture

This can't end well.

Huge pressure on Apple this earnings season.

Thu, 03/29/2012 - 12:16 | 2300896 monopoly
monopoly's picture

Apple is a great company with great products. What we are arguing about is its valuation. Absurd to the extreme. I love Apple products but 600+. Sorry, cannot drink anymore Cool Aid.

And maybe, just maybe.......the break? 0

Thu, 03/29/2012 - 12:26 | 2300927 devo
devo's picture

The products seem to be in decline, if you're being honest.

e.g. Ipad 3 overheating and underwhelming, iphone 4 antenna issues and underwhelming overall, no new products just reiterations of past products. They also charge a premium for dated specs, notably on laptops.

There's a lot of pressure to come up with new products. I guess they're banking on their TV set being viewed as revolutionary...but is that really going to fuel the growth engine? I imagine the price point will be too high for Joe Sixpack. Then he has to pay for cable on top of it? High end TV business is meh.

The one thing I admire about Apple is they understand aesthetics and form. Samsung is starting to design nice looking machines, and their specs are much better than a macbook.


Thu, 03/29/2012 - 12:17 | 2300899 devo
devo's picture

Apple at $450 seems fair. An investor must factor in down side, not just upside (e.g. low forward p/e, etc).

Google is in for some hurt, too. For some reason investors never learn with Google. It gets crushed a lot and never breaks out. I think $550 is fair, though that's still risky. I had it at $490 last year and felt that was a good entry point. 


Thu, 03/29/2012 - 12:18 | 2300900 monopoly
monopoly's picture

Remember, as Apple goes, so goes the market, at least short term. Confetti still looks good here. And our miners. Yikes, at some point the trade of the decade. But when???

Thu, 03/29/2012 - 12:21 | 2300914 monopoly
monopoly's picture

BBY may have been the straw that broke the Techs back. Apple just following down. Best Buy is history. Slowly going the way of Circuit City. Amazon eating them up. But $200.00 for AMZN with .48 cents in earnings. I think not.

Thu, 03/29/2012 - 12:30 | 2300939 devo
devo's picture

Amazon is a good short. I got it last earnings season.

Amazon's biggest problems is low (and lowering) margins. It's a big ouch.

Thu, 03/29/2012 - 12:27 | 2300918 carbonmutant
carbonmutant's picture

Buyers will always pay more for leverage...

Thu, 03/29/2012 - 12:47 | 2300992 Diet Coke and F...
Diet Coke and Floozies's picture

This stock screams OTM Put Option... Nassim Taleb style.

Thu, 03/29/2012 - 12:51 | 2301001 I am a Man I am...
I am a Man I am Forty's picture

I can rip this analysis apart easily.  These guys don't realize that stocks trade at multiples of earnings and the growth is coming from China, Brazil, iPhone5, iTV, corporations.  Focusing just on the US is stupid.  They have barely put a dent in China.

This blog has become the laughing stock of the world when it comes to Apple.  Why don't you post some analysis that is actually comprehensive and someone who understands that stocks trade at multiples of earnings.  The stock was also very cheap with its growth prior to this latest run up.

This is common sense.  Been defending apple on this board 200% ago.  When I see bullshit I call it out.


Thu, 03/29/2012 - 13:53 | 2301223 Buckaroo Banzai
Buckaroo Banzai's picture

I've been a big AAPL defender. Everything you say is true. But if the entire market turns and tanks, and P/E's drop to an average of, say, 7... that means that AAPL is gonna take a big haircut, even if they keep growing.

This is a narrowing market and narrowing markets are traps.

Thu, 03/29/2012 - 14:24 | 2301324 I am a Man I am...
I am a Man I am Forty's picture

if the market tanks, the market tanks, and everything will go with it, but that isn't what their analysis is based on.

Thu, 03/29/2012 - 14:30 | 2301347 Agent P
Agent P's picture

It's hard for a company of Apple's size to keep throwing off exponential y/y earnings growth.  Even if they ramp sales in China, which keep in mind is still largely a wealthy country of pour people, are they really going to get people to drop iProduct v.X for iProduct v.X+1 every 12 to 18 months?  I would argue that trend is going to quickly decline in the Western world as well.  Look at iPad 3 vs. iPad you think the differences are worth the upgrade?  Also, look at product cannibalization...iPod sales in decline as iPhone sales ramp...what happens as smartphones and tablets converge? 

Don't get me wrong, Apple will continue to churn out great products that people will want, but as soon as one product fails to generate the growth people have come to expect, the stock is going to correct hard.

Thu, 03/29/2012 - 15:10 | 2301478 I am a Man I am...
I am a Man I am Forty's picture

you are correct, this will eventually happen, the question is when, I think there is at least 2 years of growth from here, then who knows, can't see any further than that.  And I don't think people need to upgrade from the iPad 2 for the iPad 3 to have great sales.

Thu, 03/29/2012 - 17:17 | 2301907 Agent P
Agent P's picture

I'm more skeptical than you.  I think a big miss will come within the next 12 months.  iPhone 5 will be successful, but I think iTV (the actual set, not the current STB) whenever it is launched is going to be a flop...I think Apple is going to feel the need to push into a totally new product line as marginal growth in tablets and phones slows from fewer people upgrading to each new iteration.  If iTV is the chosen path, look out!  TVs are very price competitive, and I think few people will be willing to shell out premium dollars for a status symbol that they can't show off in public.

Full disclosure though, I thought the iPad was going to be a non-event (why does anyone with a laptop and a smartphone need a tablet?)...I couldn't have been more wrong on that one.

Kudos to you for making money in the stock...just be careful not to become so enamored with the company that you fail to see the turn.  

Thu, 03/29/2012 - 13:11 | 2301081 FranSix
FranSix's picture

AAPL is the HM of the contemporary deflation.

Thu, 03/29/2012 - 13:21 | 2301105 vh070
vh070's picture

Geeze I wish I could spend only $225 per annum on Apple.  But with a family of five who won't tolerate minimum spec, it's probably somewhere around 10X's that.  And I'm still holding back: it's way past the time to update my 13-year old Cinema Screen with a new, bigger screen that will probably cost 1/3 the sticker price (1/4 if I go off-brand).  My bro', who's got a family of six, doesn't spend any less.  Dang but if we didn't create a monster!

Thu, 03/29/2012 - 13:25 | 2301119 Dingleberry
Dingleberry's picture

I like Apple. I use their stuff a lot. But Apple is like Harley Davidson. It may not be the best, but having one makes you feel like you have a big dick cause it costs the most and makes you looks cooler than your friends.  Same with Apple. Kids use it as a status symbol. Period. End of story.  They can't afford "real" status symbols like Beemers or McMansions, so they judge each other by their having the latest and greatest iPhone.  In other words.....IT'S COOL TO OWN AN IPHONE.  Eventually, Apple will come down to earth. And another company will be "cooler".   But if you can make some money by striking the iron while it's hot, good for you. Just don't load up on this shit for junior's college fund.

Thu, 03/29/2012 - 13:30 | 2301143 Stubert
Stubert's picture

Why couldn't Boom Bust Blog just write something that is as easily understood as what Obermeyer Asset Management just wrote?

Thu, 03/29/2012 - 14:02 | 2301254 q99x2
q99x2's picture

( . i . )  Me ipads.

Thu, 03/29/2012 - 14:14 | 2301302 rosiescenario
rosiescenario's picture

There are a couple of items not discussed that could prove to be black swan events for AAPL: their Chinese supplier is forced to pay workers a living wage thereby halving Apple's margins; the FDA announces that iPads are the major cause of erectile disfunction; employment increases in the U.S. so demand for time wasting toys drops; there is a mega solar flare disrupting the internet for one month and frying solid state devices; Al Quaida decides that iPads could be the letter bomb for this century and begins introducing iBombs through bogus eBay sellers....all programmed to detonate simultaneously at some time in the future; the Feds put a new vice tax on iPads; or, an event no one could possibly have foreseen craters demand for Apple's products....perhaps they spread a dose of H5N1 worldwide?

Thu, 03/29/2012 - 15:00 | 2301452 Whats that smell
Whats that smell's picture

I recall hearing in 1999 or 2000 that Palm had more value than Boeing.

Thu, 03/29/2012 - 15:13 | 2301486 I am a Man I am...
I am a Man I am Forty's picture

yeah, that handheld address book was so bad ass

Thu, 03/29/2012 - 16:42 | 2301799 chunkylover42
chunkylover42's picture

Looks like two guys in their 50s completely missed the run in AAPL and can't believe it.

Fri, 03/30/2012 - 04:49 | 2302866 Bob Bercy
Bob Bercy's picture

Who are these jokers? There are 310m people in the US and 6.7billion in the rest of the world and he does his "analysis" on the base of the US. How charmingly and typically parochial. Get a passport dude...

Tue, 04/03/2012 - 09:37 | 2312608 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture


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