Submission + - Apple share-price-off-a-cliff: Told you that would happen (theregister.co.uk)
iComp writes: "I was allowed to write this piece because in November I wrote to our glorious editor after a London Quant's Group seminar to say that the price of Apple shares would tank sooner rather than later.
As you all know, that’s just what happened — from just shy of $800 to the mid $400s. The reason I don’t make all that much money out of that is the economics were inevitable but the timing was viciously hard to call.
The Free Cash Problem
It tells you something about economists that this is what it’s called.
Both history and game theory tell us that cash piles will inevitably be squandered, often doing more harm than good. But if the Powerpoints that senior people at your firm confuse with actually managing are saying “We can do more with less”, you’ll be rightly sceptical of the idea that more money will make you less efficient.
Imagine for a second that Apple is the best tech firm on the planet. Certainly that is what some people tell me. Why would you think that is good for the share price ?
It’s no secret that fondleslabs are selling well and by the time you read this the wrist Jobs may be on offer. Shares only outperform the market if there’s good news, not olds. The share price reflects the expectations of future earnings and so being the best is not good enough when you come to deal with the dangers of success."
As you all know, that’s just what happened — from just shy of $800 to the mid $400s. The reason I don’t make all that much money out of that is the economics were inevitable but the timing was viciously hard to call.
The Free Cash Problem
It tells you something about economists that this is what it’s called.
Both history and game theory tell us that cash piles will inevitably be squandered, often doing more harm than good. But if the Powerpoints that senior people at your firm confuse with actually managing are saying “We can do more with less”, you’ll be rightly sceptical of the idea that more money will make you less efficient.
Imagine for a second that Apple is the best tech firm on the planet. Certainly that is what some people tell me. Why would you think that is good for the share price ?
It’s no secret that fondleslabs are selling well and by the time you read this the wrist Jobs may be on offer. Shares only outperform the market if there’s good news, not olds. The share price reflects the expectations of future earnings and so being the best is not good enough when you come to deal with the dangers of success."
