I’ve written more articles about Apple than any other company we’ve ever owned. If I were to lie on Dr. Freud’s couch, then you’d find there were two Vitaliys writing these articles. First, there was Vitaliy the contrarian. Despite Apple’s ginormous size and the several dozen Wall Street analysts following the company, I felt it was misunderstood by investors. Wall Street rarely looked beyond the next quarter or two. Investors always drew parallels between Apple and Nokia/Blackberry, expecting the iPhone to eventually follow their path into oblivion.
This was the theme of my earlier articles on Apple: Look past the next year or two; Apple is not Nokia; the iPhone is software in a hardware package, and thus there is a recurrence of revenue that is underappreciated. (Nokia with its Blackberry did not have the brand relationship nor the recurrence).
And then there was Vitaliy the geek, who – I am almost embarrassed to admit – has owned every iPhone (except 8: I skipped to X). I cannot remember a single company I ever owned that elicited such a strong emotional response from me, both as a stock and as a maker of great products.
But lately my articles about Apple have been of a different kind: bittersweet goodbye letters to the stock. I became disillusioned with Tim Cook’s efforts to create a new category of products (Apple failed at building a car), and the stock price has appreciated to the point where the valuation demands that I have to a clearer crystal ball about Apple’s future than I possess.
I get a feeling I am not saying final goodbyes. Investors’ relationships with Apple are somewhat binary – it’s either love or hate; there is no middle ground. Today Apple is loved. At some point in the future that will not be the case.
And one more thing…
I am not a journalist or reporter; I am an investor who thinks through writing. This and other investment articles are just my thinking at the point they were written. However, investment research is not static, it is fluid. New information comes our way and we continue to do research, which may lead us to tweak and modify assumptions and thus to change our minds.
We are long-term investors and often hold stocks for years, but as luck may or may not have it, by the time you read this article we may have already sold the stock. I may or may not write about this company ever again. Think of this and other articles as learning and thinking frameworks. But they are not investment recommendations. The bottom line is this. If this article piques your interest in the company I’ve mentioned, great. This should be the beginning, not the end, of your research.