Happy Hour: Would You Rather With Apple Stock?

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Welcome to the end of the week and another edition of Happy Hour!  Just sit back, relax, and enjoy your end of the week roundup of all things interesting in the land of money.

Would You Rather?

I saw a couple of tweets this week that were fixated on Apple’s stock price and a belief that it’s better than spending $700 on something other than stock.  Yet in order for the stock to do well, it requires a lot of people to spend that much for its iStuff.

  • Would you rather have $700 to spend in an Apple store or one share of Apple stock?
  • Would you rather have two pair of LeBron’s new shoes or one share of Apple stock?

Both focused entirely on the share price and not what really matters.  The share price is irrelevant.  It doesn’t tell us, as investors, anything important.  It certainly doesn’t tell us if we can make money if we bought the stock today.

A better question would be…what is the better value $700 to spend in an Apple store or one share of Apple stock?  Throw in a link to the Economist about Apple’s mobile market share and there might be an argument for taking the shares.  At least it offers some insight on the underlying fundamentals that drive the stock price.  But I’m not biting.

In order for Apple to continue growing at its current pace, it must convert Android users and convince current users to upgrade to a new, slightly better, yet still expensive version every year.  At the same time convince those same users to upgrade all their other iStuff to the new, slightly better, yet still expensive versions every…single…year.  If customer fatigue doesn’t set in, one misstep will take a huge chunk out of Apple’s revenue.

The popularity of Apple’s products and the fundamental growth that came with it was a reason to buy the stock four years ago.  What’s going to drive that same growth for the next four years?  I don’t see it, so give me the spending spree!

Last Call


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