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A Bite Out of Apple: Company Dropped from Preferred List

Written by Gary North on April 3, 2013

Goldman Sachs has dropped Apple off its list of must-own companies. Goldman-Saschs is not alone. Why? Because the company has ceased to offer hot new products.

When Steve Jobs died, I said this would happen on October 11, 2011. You can read my article here. Here is what I wrote:

What goes up eventually falls . . . unless is disappears into outer space and becomes statistically irrelevant. Gravity overcomes the inertia of upward movement. What goes up always falls.

Apple’s relentless descent to earth is inevitable. I can prove it in 15 words.

Here are the first four: regression to the mean. There is no way around this. This is the law of social gravity.

What kept this from happening earlier was the fact that Steve Jobs was a creative genius, like few other men in history. He also had this advantage: he was called back to save the company when its share price was $5. Without both roles – genius and savior – Apple would barely be visible. It might have gone bankrupt.

The person who replaces him will be a corporation man. He will not be a creative genius. He will also be someone who came up from the ranks as a Steve Jobs flunky.

Here is Apple’s plight: everyone in the outfit is Steve Jobs’s flunky, and everyone else knows it. Everyone bent low whenever Jobs entered the room. This position was not always in the form of a bow.

Steve Jobs was a mean-spirited, foul-mouthed, intolerant man. He told people publicly their work was “crap.” He humiliated subordinates. That was his style. He was a personal SOB. He is beloved in death only because he turned out to be right in the marketplace, over and over, but only in the post-1996 period. Before that, the technology was not there to let him implement his vision.

Nobody who is that inconsiderate, that much of a personal jerk, can get the cooperation of highly skilled people unless he makes them a lot of money.

There is no one to follow him. There will never be another Steve Jobs at Apple.

On October 14, 2011, Apple’s shares were at $422. The lemmings rushed in to buy. The price peaked at $700 on September 21, 2012. Today, the price is $430.

Apple is baked.

Continue Reading on ibnlive.in.com

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4 thoughts on “A Bite Out of Apple: Company Dropped from Preferred List

  1. Apple used to be one of those "buy it and forget about it" stocks that always made a great return, but no more. Same thing is happening with Microsoft: after the visionary founder retires (or dies), the innovative spirit goes out of the company and the MBA's take over.

  2. The Jim Hodge Allied story has a number of considerations that every business owner should consider. Jimhodgeallied.com

  3. isn't goldman sachs one of the to big to fail companies that received huge taxpayer bailouts? Apple didn't!

  4. What goes up must come down? Substitute "America" for the word "Apple" and then you will begin to see what is really happening.