After more than half a century of experience, it seems that times never change. For example, whenever the topic arises that I write about investing, the response of many naysayers can be divided into one of three categories.
The first is, â€œWonderful, do you have any hot tips?â€ Naturally, there is often a degree of sarcasm dripping from those words. To exploit an equine metaphor and one I am well acquainted with, you can lead a horse to water, but you cannot make it drink, my response is a single word … no.
Then there are those who look at me askance, their faces blanching as they put forth a diatribe on how Wall Street is akin to Las Vegas and am I aware of the volatility on Wall Street?
No sir, they say, their money is staying in fixed income, i.e., bonds and CDs. Tactfully, I do not point out that after taxes and inflation, the return is likely negative.
Finally, there are the well intentioned who have blindly invested in a myriad of mutual funds, or worse yet annuities, and cannot wait to tell you about their investment perspicacity.
Unfortunately, what they know about investing was gained from a glossy marketing brochure or a persuasive sales presentation. The hype from these investments is always high, as are the commissions and fees, but not the performance.
Investing in the equity markets does mean having to deal at times with a diatribe of subjective and often incorrect statements by supposed experts.
And here I must take umbrage to some comments made of late about Apple. It was said that there is no design genius at Apple now that Jony Ive has left to come up with follow-on products to the iPad, iPhone, the Apple watch etc.
This past week saw Rosenblatt Securities downgrade Appleâ€™s shares to â€œsellâ€ from â€œneutralâ€, and said it expected the company to face â€œfundamental deteriorationâ€ in the next six to 12 months.
Do you remember when Apple first introduced its watch, the reception was less than ebullient. Yes, it took a couple of revisions but today look around at all the people wearing it. Yes, I have other watches, but my Apple watch can monitor my heart, allow me to answer phone calls and provide breaking financial news. Enough said.
The idea that Apple has exhausted its potential pipeline reminds me of the often-quoted statement that at one time they wanted to close the patent office because it was thought that everything that could be invented had been.
That statement is a myth, despite its popularity. In his 1843 report to Congress, the then commissioner of the Patent Office, Henry L. Ellsworth, included the following comment: “The advancement of the arts, from year to year, taxes our credulity and seems to presage the arrival of that period when human improvement must end.”
Ellsworth never intended to denigrate the Patent Office. Moreover, the number of patents grew from 435 in 1837 to 25,527 in 1899. In the one year between 1898 and 1899 there was an increase of about 3,000.
Napoleon is said to have told Robert Fulton: “What sir, you would make a ship sail against the wind and currents by lighting a bonfire under her decks? I pray you excuse me. I have no time to listen to such nonsense.”
As I wrote in my column of March 29 of this year, Apple has been pronounced dead 68 times since 1995, according to the Mac Observer commenting on The Apple Death Knell Counter indicator.
A year prior when I was writing about the future of Apple, I noted that Berenberg, a German investment firm, set a price target for Apple of $60.
Berenberg believed that Apple’s financial model was too reliant on the iPhone and predicted at the time that the company’s shares would plummet more than 50 percent.
See what I mean about the so-called diviners of Wall Street.
Appleâ€™s incredible past success has resulted in brand recognition, desirable products, and a loyal consumer base willing to pay a premium. At the same time, the market expects, even demands, both innovative products and continually rising revenues and earnings.
Can Apple meet those ever-increasing expectations? While only time will tell, it is a bit early to ring the death knell on Apple.Â
Lauren Rudd is president of Rudd International, an asset management firm. Neither Lauren Rudd nor his employees hold any shares discussed or have plans to buy them within 30 days, nor is there any intended inducement to buy or sell any security. You can write to Lauren Rudd at Lauren.Rudd@RuddInternational.com or call him at 941-706-3449. For back columns, go to www.ruddreport.com. Lauren Rudd offers commentary Thursdays on SNN News 6 during the 5:30 p.m. live newscast.