You are an idiot if you sell your Apple stock tomorrow

It’s too late to sell your Apple stock. If you sold it today, you are a genius. But tomorrow? You’ll be the biggest loser.

Why? Apple has the best team, the best distribution, the best supply chain, the best management in the business.

Everyone, from Palm to Microsoft to Google wants to be like Apple.

Hint: they can’t.

Hint: they won’t (although Palm got very close by hiring a ton of key iPhone execs and developers and PR people away from Apple).

Apple is more than just Steve Jobs. Now you’re about to find out just how much more.

If you sell your stock you’re an idiot. Yes, it’ll be down big in the morning. Yes, the news is sort of shocking. But Apple is fine and we’ll all buy the next big thing that they do no matter who brings it to us. Steve Jobs has built a killer team that everyone wants a piece of and that culture will be around for years. I met many of them in China and they are regarded among supply chain guys there as the best in the business (and the most demanding). That won’t go away because Steve isn’t at the helm anymore.

Oh, and to Steve Jobs: I wish you and your family all the best. This is a tough business to be in front of all the time and you’ve set the standard very high for your team. Now stand back and watch them shine.

148 thoughts on “You are an idiot if you sell your Apple stock tomorrow

  1. I think that Jobs, in the early days, did what the organisation is doing itself NOW. He was the “consumer”. If he didnt get it, if he wouldnt buy it – then start again.

    This consumer centric approach has always been pivotal. Many organisations have teams that try and emulate this – but in most cases the company has evolved out of a technology driven environment and so develops a technology push culture.

    Consumers do not want technology, they want nice solutions.

    Example would be mobile internet – who cares if its WiFi, 3g, 2g, LTE, WiMAx….is it quick and does it just WORK? If so – job done.

  2. In his book “Good to Great” Jack Collins’ research found that many companies could be great performers when they had a good CEO but crumbled when the CEO left. He found that great companies had great CEOs who didn’t build a house of cards which tumbled as the CEO left. Steve Jobs has helped make Apple a great company and it will endure.

  3. In his book “Good to Great” Jack Collins’ research found that many companies could be great performers when they had a good CEO but crumbled when the CEO left. He found that great companies had great CEOs who didn’t build a house of cards which tumbled as the CEO left. Steve Jobs has helped make Apple a great company and it will endure.

  4. Everybody seems to forget that there’s another Steve Jobs at Apple, Jonathan Ive. He worked with Job to design the iMacs, the iPod and the iPhone. If you’re looking for someone with Jobs’ design savvy minus the attitude, look no further.

    Now if Jobs made a succession plan naming Ives to his post… but that’s not his style.

  5. Everybody seems to forget that there’s another Steve Jobs at Apple, Jonathan Ive. He worked with Job to design the iMacs, the iPod and the iPhone. If you’re looking for someone with Jobs’ design savvy minus the attitude, look no further.

    Now if Jobs made a succession plan naming Ives to his post… but that’s not his style.

  6. BTW Robert we have an overall recession with the macro environment really difficult. I dont think you should be offering any stock advice given that you and most others know so little about financial markets anyway.

    I sold my Apple stock a while ago (along with all others) to be in 60% cash.

  7. BTW Robert we have an overall recession with the macro environment really difficult. I dont think you should be offering any stock advice given that you and most others know so little about financial markets anyway.

    I sold my Apple stock a while ago (along with all others) to be in 60% cash.

  8. i am sure you are right robert that there is a great team assembled who can keep the magic alive, but it’s really hard to replace the intensity that founder brings. look at Microsoft without Gates at the helm, for example.

    but what really bothers me is the misinformation that Jobs and Apple have been supplying the market about his health.

    i sold all my apple a week ago, and blogged about that decision before i executed the trade. this is what I said:

    “The story on Apple is Jobs and his health. There were eight of us in all at dinner and not one of us, I mean nobody, that believed Jobs is healthy. And none of us believed the Apple’s PR team is being straight on this issue. As good as the company is, I just can’t own a stock when I don’t believe the company is being straight with investors. So I am selling my entire position in Apple this morning including the stock I bought earlier than last fall.”

    trust is my single most important factor in evaluating a company and its management team and i can’t trust Jobs and the Apple PR/IR team anymore.

    i can understand why Jobs feels his health is nobody’s business and i feel terribly for him, but it doesn’t change my view that he’s broken the trust of his shareholders and that’s a very bad thing to do.

    fred

  9. i am sure you are right robert that there is a great team assembled who can keep the magic alive, but it’s really hard to replace the intensity that founder brings. look at Microsoft without Gates at the helm, for example.

    but what really bothers me is the misinformation that Jobs and Apple have been supplying the market about his health.

    i sold all my apple a week ago, and blogged about that decision before i executed the trade. this is what I said:

    “The story on Apple is Jobs and his health. There were eight of us in all at dinner and not one of us, I mean nobody, that believed Jobs is healthy. And none of us believed the Apple’s PR team is being straight on this issue. As good as the company is, I just can’t own a stock when I don’t believe the company is being straight with investors. So I am selling my entire position in Apple this morning including the stock I bought earlier than last fall.”

    trust is my single most important factor in evaluating a company and its management team and i can’t trust Jobs and the Apple PR/IR team anymore.

    i can understand why Jobs feels his health is nobody’s business and i feel terribly for him, but it doesn’t change my view that he’s broken the trust of his shareholders and that’s a very bad thing to do.

    fred

  10. Scoble, the thing is, history is what’s pushing the stock down. History is going to repeat itself, because when Steve left last time, the company fell apart. It’s about the top down mentality, not the team. The team will leave when the top down is no longer around.

  11. Scoble, the thing is, history is what’s pushing the stock down. History is going to repeat itself, because when Steve left last time, the company fell apart. It’s about the top down mentality, not the team. The team will leave when the top down is no longer around.

  12. Robert,

    I too wish Steve and his family the best. I think your strength assessment is accurate. I agree that Palm, Microsoft and Google want to emulate Apple in some ways. I disagree that they can’t. It may be more difficult. In other words, I get your main points.

    My bigger issue is calling people who sell tomorrow “idiots”. It sounds like you’re assuming they are all selling because of today’s announcement. People sell stocks for any number of reasons. There are people who just looks at technical factors of a stock and may not even realize the news events. In some ways, it reminds me a bit of people who get upset when founders sell stock, but don’t realize they need to diversify their assets as well. In the end, the markets will absorb the news and move on.

  13. Robert,

    I too wish Steve and his family the best. I think your strength assessment is accurate. I agree that Palm, Microsoft and Google want to emulate Apple in some ways. I disagree that they can’t. It may be more difficult. In other words, I get your main points.

    My bigger issue is calling people who sell tomorrow “idiots”. It sounds like you’re assuming they are all selling because of today’s announcement. People sell stocks for any number of reasons. There are people who just looks at technical factors of a stock and may not even realize the news events. In some ways, it reminds me a bit of people who get upset when founders sell stock, but don’t realize they need to diversify their assets as well. In the end, the markets will absorb the news and move on.

  14. Robert- One of your best blog comments to date. You have nailed it.

    We all hope that Steve will recover and be OK.

    Apple’s stock has been hammered again and again in this market. The company keeps churning out great products and great results but the stock takes a hit anyway. This is one more example.

    Steve Jobs is a great CEO and one of the reasons for that is his great team building. He has some superstars in place.

    Tim Cook is outstanding. Steve Ballmer could only hope to one day carry Tim’s briefcase for him.

  15. Robert- One of your best blog comments to date. You have nailed it.

    We all hope that Steve will recover and be OK.

    Apple’s stock has been hammered again and again in this market. The company keeps churning out great products and great results but the stock takes a hit anyway. This is one more example.

    Steve Jobs is a great CEO and one of the reasons for that is his great team building. He has some superstars in place.

    Tim Cook is outstanding. Steve Ballmer could only hope to one day carry Tim’s briefcase for him.

  16. It’s not just about Steve Jobs, what does Apple have in the pipeline to keep up momentum in 2009? iPhone and Mac product lines will be on cruise control for the next couple of years, adding incremental upgrades and polishing the software.

    Now that music is DRM free, recreating the music business is basically done. Unless they create a Pandora-like subscription or free service, there’s little left to do to iPod except try to hang onto market share. Which is probably why Tony Fadell quit.

    The Mac line is doing well, but they hardly need Jobs around for that. Build a pretty box around Intel & nVidia’s latest once a year and shine up the OS once in a while. The switchers are coming from word of mouth, not feature upgrades. Maybe they can ship the rumored netbook or Kindle competitor – perhaps leading the category and perhaps not.

    The only thing left is the rumored Mac Mini as set-top. The TV space definitely needs that box, but unless Apple can crack the content suppliers as they did with record labels, it’ll be a weak product. There’s a lot more money in the video business than audio, and the gatekeepers have been less willing to give Apple a piece, much less dominant control. Netflix, Hulu, and Youtube support (all in HD) would be the bare minimum. Really it needs a subscription plan for 1080p movie rentals that cache in the background. If they build it, they need Jobs to negotiate with studios and also introduce it.

  17. It’s not just about Steve Jobs, what does Apple have in the pipeline to keep up momentum in 2009? iPhone and Mac product lines will be on cruise control for the next couple of years, adding incremental upgrades and polishing the software.

    Now that music is DRM free, recreating the music business is basically done. Unless they create a Pandora-like subscription or free service, there’s little left to do to iPod except try to hang onto market share. Which is probably why Tony Fadell quit.

    The Mac line is doing well, but they hardly need Jobs around for that. Build a pretty box around Intel & nVidia’s latest once a year and shine up the OS once in a while. The switchers are coming from word of mouth, not feature upgrades. Maybe they can ship the rumored netbook or Kindle competitor – perhaps leading the category and perhaps not.

    The only thing left is the rumored Mac Mini as set-top. The TV space definitely needs that box, but unless Apple can crack the content suppliers as they did with record labels, it’ll be a weak product. There’s a lot more money in the video business than audio, and the gatekeepers have been less willing to give Apple a piece, much less dominant control. Netflix, Hulu, and Youtube support (all in HD) would be the bare minimum. Really it needs a subscription plan for 1080p movie rentals that cache in the background. If they build it, they need Jobs to negotiate with studios and also introduce it.

  18. I saw a couple comments asking why you are a genius if you sell your Apple stock today. In simplified terms, let’s say you own one share of Apple stock, trading at $85 as it closed today. Tomorrow, when the markets open and this news has propagated, stocks will fall. Let’s say to $50. You buy back your one share at $50.

    You still have one share in the end, but you just made $35.

  19. I saw a couple comments asking why you are a genius if you sell your Apple stock today. In simplified terms, let’s say you own one share of Apple stock, trading at $85 as it closed today. Tomorrow, when the markets open and this news has propagated, stocks will fall. Let’s say to $50. You buy back your one share at $50.

    You still have one share in the end, but you just made $35.

  20. Zach: I do not own AAPL stock. I used to back in 2003 but I sold it back then and haven’t owned it since. Fast Company prohibits me from owning stock in any company I cover, too, and I’ve always disclosed when I have financial interests in or am getting compensated by companies I write in.

  21. Zach: I do not own AAPL stock. I used to back in 2003 but I sold it back then and haven’t owned it since. Fast Company prohibits me from owning stock in any company I cover, too, and I’ve always disclosed when I have financial interests in or am getting compensated by companies I write in.

  22. I agree that they should be fine but there are questions… After all this is a company that was in great shape in the past and managed to throw it all away quickly due to bad management. If Jobs has to end up leaving the company good management can keep it going but if they pick wrong they won’t be immune to being destroyed regardless of their standing today.

  23. I agree that they should be fine but there are questions… After all this is a company that was in great shape in the past and managed to throw it all away quickly due to bad management. If Jobs has to end up leaving the company good management can keep it going but if they pick wrong they won’t be immune to being destroyed regardless of their standing today.

  24. I agree with the best hype. Apple makes good solid products with a lot of glam to them. I don’t know if I can say much more than that.

    Don’t buy the hype!

    I am sure that they will fine, but they need to do more than ride the gravy train that is their iPhone and iLife. The next two or three years will be telling. Also, since Macs are more of a luxury item, I expect that they will take a hit.

    The true test is if these products continue to do well in a sagging economy.

  25. I agree with the best hype. Apple makes good solid products with a lot of glam to them. I don’t know if I can say much more than that.

    Don’t buy the hype!

    I am sure that they will fine, but they need to do more than ride the gravy train that is their iPhone and iLife. The next two or three years will be telling. Also, since Macs are more of a luxury item, I expect that they will take a hit.

    The true test is if these products continue to do well in a sagging economy.

  26. With cash reserves of $25 billion, and 33% gross margins, Apple may tank tomorrow with news of Job’s health, but will roar back! How many companies do you know of that are sitting so comfortably in this economy?
    I will be picking up more shares on dips!

  27. With cash reserves of $25 billion, and 33% gross margins, Apple may tank tomorrow with news of Job’s health, but will roar back! How many companies do you know of that are sitting so comfortably in this economy?
    I will be picking up more shares on dips!

  28. I don’t know if I agree entirely….. sure, you are drinking the apple Koolaid, must like the msft Koolaid from earlier. Apple makes great products.

    1) It depends on what guidance they supply in the next earnings call. I also suspect they’ll be bombarded with questions about Steve’s health that can’t be dodged this time around….

    As soon as the CEO takes a leave, the board must supply details.

    2) Retail is being punished. People are losing their jobs. Food comes before iPods. Computer sales are trending downward on the consumer side. I don’t know how Apple escapes this.

  29. I don’t know if I agree entirely….. sure, you are drinking the apple Koolaid, must like the msft Koolaid from earlier. Apple makes great products.

    1) It depends on what guidance they supply in the next earnings call. I also suspect they’ll be bombarded with questions about Steve’s health that can’t be dodged this time around….

    As soon as the CEO takes a leave, the board must supply details.

    2) Retail is being punished. People are losing their jobs. Food comes before iPods. Computer sales are trending downward on the consumer side. I don’t know how Apple escapes this.

  30. Ontario, I think it’s very possible to agree with Robert and with me here. Apple has a history of innovation, which will continue with or without jobs. They have a sharp management team and have been pushing the Valley around since he came back. But I think we as consumers and Apple as a company will be much better off with Steve than without.

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