
Is Apple a candidate for acquisition? - shawndumas
http://www.asymco.com/2011/01/24/wall-streets-infinite-loop-the-tragic-tale-of-apples-valuation/
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nika
I think this is another way of looking at the "Steve Jobs Risk Premium."
(what's the opposite of a premium?) Apple's stock price is not highly valued
relative to growth and income, making the company undervalued. The best
argument for this undervaluation being rational is that people think that all
of the magic comes from Steve Jobs.

I think Jobs is a good leader, but the Magic is more widely distributed than
that, and this means that Apple is probably a good buy.

While nobody may be able to raise the cash to do a complete acquisition of the
whole company, the same financial metrics that make this appealing (if you
could raise the cash) make the stock appealing for those who can raise the
cash to buy only $3,000 of the company, or $30,000 of the company, or whatever
fraction.

Personally, I'm being irrational. When Apple was $13 a share and had $6 in
cash, I thought it was a screaming buy, but didn't invest because of fear. Now
that failure then is holding me back, as investing now would be confirmation
that failing to do so then was a mistake. I felt Apple was outside my circle
of competence... but that was a rationalization.

That Apple is the most valuable tech company in the USA is a rationalization
that somehow they must go down in value. I don't think that is wise.

~~~
brudgers
_"But the Magic is more widely distributed"_ still relies on magic to justify
Apple's market valuation. It's bascially a "this time the rules are different
argument," - the sort of argument that historically precedes the bubble's
burst.

Considering how Apple came to their current position doesn't provide much
reason for optimism that they can repeat their success of the past ten years
(hence the talk of magic). Apple got where they are by leveraging commodity
MP3 players into an entire product line of Pods, Pads, and Phones based upon
being an early mover in the post Napster music business (and with the app
store they even managed to sell a fair number of Macs to iPhone developers).
The importance of Napster's demise towards Apple's success should not be
underestimated.

Apple could encounter such good fortune again, but it is difficult [of course]
to see anything in their current product portfolio, the regulatory
environment, or the logistics of digital content delivery that offers similar
opportunities [again of course].

Looking deeper, the dearth of new iPad competitors may be more indicative of
the size of the actual market for slate devices than an indicator of the
shortcomings of Apple's competitors - e.g. the slate type device my UPS driver
carries indicates the sort of dedicated device design which benefit businesses
and some of the shortcomings of Apple's vision within a business model. Magic
doesn't cut it.

~~~
sdsdfvsdf
Given that Google has not even existed as long as Steve Jobs has in this
second coming, there is no reason to think they can do anything consistently
ever ... or learn from their mistakes in they way Apple has done better than
the great majority of companies.

You could apply your negative reasoning to most tech companies in this new Dot
Com Bubble.

Fact is, Apple has been through positive learning curves.

