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April 18, 2013


What you said at the end was something I was thinking too. I think Tim Cook already addressed this point of not putting too much faith into a single single supplier of a single component, because even if the data is true, it doesn't mean much in the grand scheme of Apples massive supply chain due to yield rates, switching suppliers/components, etc. Yet the investors still fall for it everytime. So you really gotta wonder if someone with no integrity isn't pulling a few strings behind the scenes.

Dear Sir:

In mid-2010 the antenna was front page news. Apple responded. In early 2012 the Chinese supplier issue was front page news. Apple responded. Today the stock price is front page news. And yet silence so far.

Apple's stock price has become a major PR problem. People think what they want to believe. It's called Confirmation Bias.

Stock price --> belief about the company --> thinking about the company --> media coverage of the company --> brand of the company --> halo.

Stock price down 50% --> fear --> negative thinking --> negative supplier/employee/media leaks --> brand tarnished --> competitors products.

So this is a PR issue. It's getting bigger each day.

The most ingenious solution would be a major stock buyback. Share buybacks create permanent value. Everyone benefits equally: current employees, current owners, future employees, future owners. Higher cash flow numerator / lower share count denominator = greater value for each share of ownership. Someone please get Tim Cook a copy of "The Outsiders: Eight Unconventional CEOs". Plus it's tax efficient as Apple wouldn't pay 40% of the cash to the government as income taxes.

The financial community (not wall street, smart people) has folklore that Apple is a poor capital allocator. Let's home Tim Cook and Peter Oppenheimer can prove us wrong. The way I see it:

Apple is a great capital allocator --> stock price rises --> belief in Apple --> positive thinking ("I do love this X") --> positive media coverage (no more negative leaks) --> brand rejuvenated --> halo.



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