Morgan Stanley recommends Apple use cash for share buybacks, dividends - Page 4

No I don't think Apple should rush headlong into something 'else'. Just a wild daydream based on something Ives said and other factoids. A dream really, a wish that somebody who knows what the hell they are doing would tackle the automobile or energy. Look at the mess Google made with their solar investments, ugh.

I sure do know what investor panic looks like. I've seen that movie many times while holding and selling AAPL. I'm just so tired of the panics really. They are continual false rumors and ginned up phony stories and even fat finger Fridays....I think only people who bought in early, the wealthy, and hedge fund monsters own the stock in any quantity.

Truly, I know the company is a responsible one in the main, but they put out such cool things it is sometimes shocking to people. I hope they can keep up the excitement, though it most assuredly won't be by making an electric car.

So, did you have a broker tell you that you were crazy to buy the stock back then? I did. Luckily I bought back in, in a moment of clarity. If I hadn't sold some then, I'd have our retirement x4 instead of x 2 but I'm not complaining.

Heh. I'd like it if they split 4 for one and gave a small dividend too, but not if it's strategically the wrong thing. All of us would like to know what that pipeline is. I remember the first time I saw the patents for the iPad, long before the phone came out. They have this patent on the gesture dictionary...many surprises ahead just on that alone.

Yeah, I had a broker who raised his eyebrows really high when I told him to make those buys back in 1997 (correction: 14 years ago, not 13). Now he calls me a freaking investment genius, though I've made too many poor investments over the years to believe that. But I did make the one really good one. I've sold some but kept most.

You put your finger on it when you mentioned Google and the solar investments. I was going to bring that up as a classic case of loss of focus, and no small amount of a company believing too much in their own propaganda. "Are we not great? We can do anything!" I don't mind a company stepping away from their strengths, but it should be in careful steps, not big leaps. Apple has executed this strategy masterfully over the last dozen years.

I keep thinking of a great line from an old T-Bone Burnett song: "Eventually, like Napoleon, he invaded Russia."

As a stockholder, you don't want to see that.

Apple is not interested, and should not be interested in pleasing shareholders. They are interested in creating insanely great products. That is one of the main reasons they are doing so well, now.

Other than the fact that they control Apple's destiny.


They're not as 'insanely great' as they could be or comparatively as they used to be.

The relationship between stockholders and any public company's destiny is always somewhat tenuous. Control is one thing that most stockholders do not have. The longer you invest the clearer it becomes that the only stockholders who really have any control are the ones who sit around the boardroom table, other insiders, and to a smaller extent, the large institutional investors. The rest of us are along for the ride. If Apple decides to declare a dividend (and I smell one coming) then it won't be a gesture designed to please small investors.

Google lost focus buying into solar? Ah, do you know how much power a large server farm burns? Google HQ has a 1.6MW PV system for reference.

Like LCD panels are part of Apple's supply chain, internet service and electrical power is part of Google's. Hence investment in these two key areas. In any case, Google has moved into larger deployment of solar by investing another $94M into building out 88MW worth of PV capacity around California.

Warren Buffet is also investing in solar so from a purely financial perspective it's not as stupid as you think.

Again you ignore that tech companies can burn through massive CAPEX in order to compete. While Apple is holding a lot of cash it's not that much in comparison to something like LTE buildout. Verizon's 2012 capex is estimated to be $15-16B.

For Apple the equivalent would be building someone (GF, TSMC, probably not Samsung) a new 22nm fab for $5B to lock in exclusive production months ahead of competitors. Or to push a new panel display capability into production. If they need to do three of these to have a crushing tech advantage say for CPU, Display and SSD you're in LTE buildout territory.

In 2012 Apple's CAPEX is jumping up to $8B from 4.6B. Horace's evaluation is their building capacity for growth for iOS devices. Assuming that Apple is going to continue to grow and enter some new market then 2013 could increase significantly again.