Apple spins off more cash than that in one quarter. You do realize that if 5 billion is good, 55 billion is NOT 11 times as good, right?
So maybe they stop at 10 billion? 15? 20? 30? 45? NEVER? They should NEVER give the cash back to its rightful owners, the owners of the company?
Oh I know I know! Because Apple has 60 billion in the bank? Thank god they didn't only have $20 billion, then they could have NEVER afforded to lock up the worldwide supply of touch panels. With 60 billion they can lock up the worldwide supply for 20 years! And they SHOULD! Riiiight.
That 3.9 billion wasn't cash though, it was a committment to buy. Apple didn't use any of its existing cash pile to buy those parts, it used cash from operations. So, sorry, your argument falls flat.
Yeah, they'd be feeling the pain. See my previous post.
Really people, if you don't understand finance, please don't comment. You look ridiculous.
Do you by any chance run a multi-billion dollar company? And, a very very biig one too?
Warren Buffett has so much cash (almost more than Apple), and he does not know what to do with it If he is not very careful any purchase he makes can trigger stock price escalation, and that will affect his buying strategy. He may be able to use your financial expertise.
Oh, by the way, Microsoft has a pile of cash reserve too.even if the company has quite a bit of debt. Their stock price is going down, in spite of all their efforts the past decade. Ballmer may welcome your expertise more than Steve Jobs.
Dell...that is another company that can use any financial and marketing strategy expertise right now. Maybe even Dell will listen to you.
Maybe if you and Dell put your mind together, you combined expertise in running big companies could persuade Steve Jobs that he is hurting Apple for hording so much money.
Tell him stock buyers are fleeing Apple like lemmings because he is too stubborn keeping his 50-60 billion instead of sharing the wealth.
Tell him, Apple may lose its edge being so cash-rich.
But don't cry if he won't take your brilliance. Jobs happen to be dumb and not a financial guru like you. Steve Jobs, the fool that he is might just quip:
"I like our strategy. I like it very much."***
Apple after all, the largest technology company in the world. Just more than a decade after that infamous quip by Micheal Dell.
Now, if you happen to have biilions in your own pocket, or have suckers who are willing to entrust their money to you, maybe start a company, or buy a company (Dell, RIM, Nokia), and apply your expertise saving them. When you succeed, I may even buy your book when your write your memoirs.
Until you can prove your mettle, I doubt very much that your reasoned postings in a site like Apple Insider would make you the financial expert that you pretend to be.
Do you actually believe yourself?
Quote:
Originally Posted by cameronj
I have an economics degree from an Ivy league school for christ's sake.
And this declaration makes your argument infallible? For your information, the economic theory that got us into a debacle, triggering one of the worst economic collapse worldwide were economist from Ivy league schools and even were awarded the Nobel Prize for their economic theory.
By the way, George W. Bush graduated from an Ivy league school too. It did not stop him from invading Iraq because he thought there were weapons of mass destruction in Iraq. And look how many billions and trillions of dollars that cost us. Not to mention the lives not only of Americans but more the Iraqis who were to suffer the "beliefs of an Ivy league graduate".
CGC
***Not that Steve Jobs is prone to quoting other people.
Or how the recent Japan nuclear crisis (soon to impact other nations, or at least scare people like Americans) could have been averted.
The main reason why the Japanese Nuclear reactor failed. and reactors like it are more prone to fail is that it is based on a very dangerous technology -- the light water nuclear reactor technology, a US-developed technology that has its origins from the Manhattan project. Westinghouse, once one of the largest companies during its time, in fact spun all of its other divisions (ca 1970s???) to focus on its nuclear reactor business based on the light water nuclear reactor technology.
Light water (H2O) does not have the extra neutron found in D2O (heavy water) to serve as very efficient nuclear moderator for the splitting radioactive (unstable) isotope of uranium (see below).
This inefficiency of light water as a neutron moderator was not issue with the US because it has been enriching uranium already since World War II -- so nuclear power for "peaceful uses", like electricity production is just adding to the "economies of scale" in using the "enriched uranium" technology that is central in the military power play during the era since World War II.
When Canada wanted to explore the use of nuclear power, it has to take a stock at its capabilities and size as a nation. It does not have a very large population, and more important, it does not have the "enrichment technologies" already in place to use in a light water based nuclear reactor. It would be dependent on the US or other countries as source of the "enriched uranium" for its nuclear reactors. There's more but that will be later.
With this as a backdrop, Canadian scientists explored other possibilities. I do not recall now, if the Canadians pioneered it, but Canada decided to develop a nuclear technology they dubbed CANDU using the concept of "heavy water" nuclear reactor.
Heavy water nuclear technology uses heavy water (D2O), an isotope of water with extra neutron. Under certain conditions, that extra neutron in heavy water (D2O) can be released to a very reactive (unstable) neutron, plus a very safe light water (H2O).
,Asi turned outt the more reactive ( neutron in heavy water(D2O) is very efficient, more so than light water, in capturing and moderating the neutrons released even in only slightly enriched uranium or high grade uranium minerals, not too significantly higher than what is already found in "ordinary uranium minerals.
It is too technical to explain here but there are pros and cons for each technology.
For the US, its huge military-industrial complex almost required further uses of enriched uranium, thus the preference of light water nuclear technology for power plants. It does not hurt that light water is every where and almost free to serve as "coolant" for the reactor.
Heavy water has to be synthesized or "harvested" by enrichment using seawater (as raw material). Too complex to elaborate here, but I think Canada uses the latter (not too sure now). So, it is more expensive in that regard.
However, since the heavy water nuclear reactor does not need highly enriched uranium, that alone would offset the cost of the heavy water. But, there is more"
Remember that the heavy water is needed for the nuclear reaction to be triggered in a heavy water reactor. So, in case some mishap happened. How do you stop nuclear reaction?
Very simple -- just remove the uranium rods from the heavy water pool. There are also neutron absorbers used.to regulate neutron released. The Canadians were even wise enough to "segment" the uranium rods in the reactor pile.
So, because of the simplicity of the heavy reactor nuclear technology, it does not require those very thick metals and "catastrophy" domes that is associated with light water reactors. However, reinforced thick domes are also used even in heavy water nuclear reactors simply because we are still talking about highly radioactive materials.
And, the advantage does not end there. Since the heavy water use only slightly enriched uranium. the spent uranium rods are not as lethal as the by products of spent rods from highly enriched uranium (it includes plutonium as well as highly radioactive materials that last for thousands of years). So, processing the spent rods of only slightly enriched uranium is not much of a problem. [I am not sure now, but if I am not mistaken, the spent rods from CANDU reactors are shipped either to the US or France.]
Oue choices matter. Thus, had Japan opted to use technologies, like the CANDU technology, there would have been no massive evacuations, even in the aftermath of such a catastrophic earthquake and tsunami. In fact, had the main reactor (if based on CANDU, or heavy water nuclear reactor were in place), the loss of the heavy water would have shut down the nuclear reaction (and further minimized with neutron absorbers).
You might ask, if it were that straightforward, why isn't every nation using the heavy water nuclear reactor technology? The 1950-1960's wass the era of the cold war. The power of nuclear weapons played a pivotal role in the "brinkmanship diplomacy at the time. He who has the bigger gun has a greater voice in such scenario. What bigger gun than a nuclear weapon -- that to this day has become the symbol of nations to become part of a very elite club among nations. Enriched uranium is key is the "nuclear socio-political scenario". Its use in a more peaceful setting is just an added bonus, and a great propaganda. Selling the technology also to other nations is big business. And, since it is one of the few high-tech products that the US excelled in, with "political fund junket" pushed by companies, like Westinghouse, I would not be surprised if "buying nuclear reactors technology" from the US was in the agenda.
The other thing is risk-case scenario analysis used in technology deployment. This is well and good, until the unlikely scenario come into play.
Terrorism threat. The other very dangerous issue with spent rods from light water reactors is that the radioctive materials in those spent rods are so lethal. they can be enriched to create nuclear bombs; but even without developing nuclear bombs, as they are they can be used to create what are called dirty bombs. Just like in Chernobyl, their release could render a place inhabitable to human beings for hundreds, if not thousands of years.
Imagine those dirty bombs being released in New York, Los Angeles, Houston. Chicago, and other large cities in the world. September 11, 2001 would pale in comparison. The psychological impact alone, if it happens in the US can destabilize the market, and financial institutions, and eventually the mainstream economy.
The heavy water nuclear reactor, because of the deuterium (in D2O) produced more tritium in the resulting heavy water compared to light water reactors. However, tritium is a very low energy radioactive emitter (a thin plastic film can shield you) and very much shorter half life compared to other by-products of radioactive uranium decay. Just don't drink tritiated water though.
CGC
I should point out that within the reactor itself, light water (not sea water) serves also in the traditional steam generation to produce electricity. The heavy water has a different function in heavy water nuclear reactor technology. The heavy water also serve as a moderator, once more neutrons are released from the splitting unstable uranium. The process lead to thermal energy conversion of the energy released in the splitting uranium atom. This thermal energy is then transferred to steam generation using light water Inot seawater) as intermediary medium. Steam release kinetic energy that turns the steam turbines that then generate the electricity from nuclear reactors.
Note also that the same process, a nuclear fission process, occurs in both technologies. However, because of the difference in raw materials used, what is referred to as spent rods are different in the two reactors, more toxic in concentration from the spent uranium rods in lightwater nuclear reactor technology. The radioactive by-products of the nuclear reaction. such as plutonium may be enriched (or also used in a different way) in breeder nuclear reactors. But plutonium is even more deadly than radioactive uranium. The stable isotope of uranium (the highest proportion in uranium minerals) is not radioactive.
Here's a photo of a CANDU nuclear reactor facility in China, which does not look too different from the usual industrial building:
Wikipedia provides information about both technologies that should be readily understood by the layperson.
I have not followed the technology but the last time I read about it, the Canadians did further improvements from their earlier prototypes, including the use of slightly more enriched uranium for more efficient power generation. Only a few countries have opted for CANDU, and that is not because it is inferior. That is where geo-politics come into play during high level trade agreements.
There is yet a third technology using graphite as the "neutron" moderator.
It's that last part, right before the etc, that I take issue with.
Apple won't keep the hoard forever. And when they bend to the will of their shareholders, you'll believe that they were right to wait so long and keep holding the shareholders' money.
My answer is irrelevant because I see you now understand (concede) that shareholders do not own the cash. Thanks for not dragging this debate into the gutters like others do.
The entire question of who "owns" the cash is ludicrous, if only because it completely misses the point. The board of directors of a public corporation has a fiduciary responsibility to the stockholders. This part of the deal they accept when they go public and seek outside investors. They are supposed to use the money the stockholders invest to grow the company's business, and if the business is a good one, the stockholders will benefit.
The problem with Apple's cash hoard isn't that the stockholders somehow "own" it, but that Apple's board has indicated no plan to use it for growing the company, which under the system called capitalism is its only purpose. Failing that purpose, the board has a fiduciary responsibility to the stockholders to distribute some of it back to the stockholders. They should do one or the other because it's simply good corporate management to either invest cash flow or give it the stockholders if they can't invest it. The matter of ownership never enters in.
It may cower us to argue with someone who has a "Dr" attached to his/her name (Is is MD or PhD?)***, especially after someone who bandied his Ivy league credentials to be one support for his arguments, but let me join the fray.
The ownership of the company does matter and not ludicrous. And, technically the stockholders own the company. In theory, if there are enough stockholders who decide to have contrary views opposed to the decisions of the Board then they could call a point of order to be heard, and for a decision to be made or even oust the Board and change the policies of the company.
It never happens these days because most corporations have as their largest stockholders are cumulatively mainly institutions (non-profits, mutual funds, state or retirement funds managers, etc.) who are themselves run by yet another tier of "professionals".
During his waning days, John Kenneth Galbraith wrote a short book based on his treaties about the management of corporations and multinationals. In that damning book, he bemoaned the ascendance of a Board of Directors mindset that cease to work for the stockholders they represent but more for their own advancement. This is no different from politicians who forgot that they represent the voters that placed them into office.
I do not think stockholders are really true investors these days the way a family run business would make short term sacrifices for the long term good of the family business. Today's stockholders are more motivated by how much their money earns in the shortest time possible. And that is even more true among the professional managers that run mutual, foundation or retirement funds. They know that if their return is not up to par with the "average" returns, they will lose their jobs.
As to the issue of the ownership of the cash, it is not so much that the stockholders do not own the company or do not have a stake to that cash just because they are the last to have a hold of the money in case of a bankruptcy. This is just the law, and a correct law. That as part owners of a company, it is your financial duty to pay all obligations before you get your share of the pie.
Now, as to whether Apple should or should not "return" part of that hoard to the stockholders is another matter. For as long as Apple is doing good, there will be enough stockholders who would not mind entrusting their faith on Steve Jobs and the Board on how to deal with that money -- notwithstanding all the grumblings from "Ivy league" graduates and those with "Dr." attached to their credentials.
As pointed out by one of the posters, the new Apple has not declared any dividends (???) since it came out from its near bankruptcy ca. 1997. For as long as Apple is doing well, there will be enough stockholders who would agree not to rock the boat, and let the Steve Jobs. the management and the Board run the company as they are doing now.
And no judge will have any credence or legal foundation second-guessing the decision of the Management and the Board.
CGC
***What I learned when I came to the US to study, is that those in the academe never use their degree or credentials, except in professional correspondence. This is especially true among those who graduated with a PhD. But, even those with an MD seldom use their degree in more collegial settings, and prefer to be addressed by their first names. The more accomplished ones are even more conscious about this informal "understanding".
It is a different matter when they see patients.
Well, at least that was my experience. I remember when I first came to the US, I arrived well past midnight because the plane was delayed. I did not expect to be met by anyone but was apprehensive because I had never been out of my country before then, and I would literally be lost.
Then, out of the corner along my way to find the baggage claim, this older gentleman puffing his cigar introduced himself simply as "Hi, I am Bob". Even in my befuddled state (time difference, tired and all) and not having slept for more than a day, and not having seen his picture before, I had the presence of mind to know that there was no other Bob, but the Chairman of the Department, Editor and members of the editorial boards of quite a few scientific journals, a recognized authority in his field, etc., etc.
What I found later on was that Department Chairmen were never the ones that meet lowly students, or even their prestigious guest speakers, or Nobel Prize winners. As to why he came and waited for me well past midnight, and even reserved a hotel for me for a week at the Department's expense was another long story.
The thing was, he was not the exception, even those with even more prestigious credentials.
It pleases the stock markets not at all. No metric of stock performance is based on or includes cash. Or debt, for that matter. Cash reserves are utterly meaningless numbers to stockholders unless the company pays some of it out as dividends. In fact a company holding huge cash reserves without any obvious or even theoretical plans for spending it on growth raises all sorts of questions.
'Fraid not. Nobody buys a stock for a company's cash, unless they are planning on taking over the company.
The entire question of who "owns" the cash is ludicrous, if only because it completely misses the point. The board of directors of a public corporation has a fiduciary responsibility to the stockholders. This part of the deal they accept when they go public and seek outside investors. They are supposed to use the money the stockholders invest to grow the company's business, and if the business is a good one, the stockholders will benefit.
The problem with Apple's cash hoard isn't that the stockholders somehow "own" it, but that Apple's board has indicated no plan to use it for growing the company, which under the system called capitalism is its only purpose. Failing that purpose, the board has a fiduciary responsibility to the stockholders to distribute some of it back to the stockholders. They should do one or the other because it's simply good corporate management to either invest cash flow or give it the stockholders if they can't invest it. The matter of ownership never enters in.
Distribute the cash "back" to the stockholders? If you agree we don't own it in the first place, then what's up with distributing it "back" to us? And I think someone else has settled the issue of ownership, or rather non-ownership.
Yes, it is good corporate management to invest it. And they are! No, it is not good corporate management to distribute it to shareholders. That doesn't benefit the company in any way unless the company stock needs a short term artificial boost. Regardless of motherhood statements, good corporate management is not about putting shareholders' desires at the top of the heap. The smartest way to use that money is to give out bonuses to the best engineers to encourage them to keep working 24/7.
You're kidding, right? The money the stockholders invest? Apple does not see the cash we "invest". Oh boy, are you out to lunch!
Technically, you are correct. Unless a company is at incubation stage or issues new stocks for expansion, there is no new capital coming in -- just a change in ownerships of stocks, the seller believing the company is overvalued (or no longer is attractive or meet criteria), while the buyer sees an opportunity. But clueless stockholders believe there is infusion of new cash" into the coffers of the company simply because they bought stocks. This "sense of ownership" make delusional stockholders Iif they even are to start), with Ivy league credentials to think that they can run a company because they finished a finance degree in an Ivy league school, or something. *grins*
The change in ownership of stocks matter only when there are rapid swings that can destabilize the company, or there is a stampede when a company is not in good financial health. The reverse may apply, greedy stockholders, in spite of all their bluster, are not likely to divest of a company that is doing very well, and that lead to overvaluation because other greedy stockholders also want a piece of the action -- if not for the returns, but some hedonistic belief that they may have something to do with the success of such companies.
Alas, there are not too many investors anymore in the strictest sense of the word, investor. Today's individual stock buyers -- daytrade or short term stockholders, short or do long bets in an attempt to beat the average Index.
Majority of the stockholders, do not even know where their money (mutual funds, retirement funds, etc.) are allocated anymore. All that becomes a criteria wold be the rate of return over similar funds.
And many people should not even attempt to own individual stocks to begin with.
As to whether a company should or should not give out dividends is another story altogether. You do realize that some people do require dividends as a form of steady income. Retirees for example have no use for long term gains, especially if they may die any time between now and then. In this case, Apple may not be correct inbestment for them.
However, the issuance of dividends is not strictly speaking incongruent with good management of a company, nor of giving rewards to deserving employees. But, on the whole I agree, that Apple need not succumb to the delusional demands here, simply because they believe that Apple is beholden to them.
There is a simpler solution to that especially if you own only a few shares, if any -- sell your stocks if you do not agree with company management and Board. Or, go to tech companies that provide dividends. Like Microsoft perhaps? Oh wait....
But clueless stockholders believe there is infusion of new cash" into the coffers of the company simply because they bought stocks. This "sense of ownership" make delusional stockholders Iif they even are to start), with Ivy league credentials to think that they can run a company because they finished a finance degree in an Ivy league school, or something. *grins*
...
There is a simpler solution to that especially if you own only a few shares, if any -- sell your stocks if you do not agree with company management and Board. Or, go to tech companies that provide dividends. Like Microsoft perhaps? Oh wait....
CGC
But my point here (along with a couple of others) is that we DON'T own the cash or the company. So I don't understand why you're telling me to sell my stock. I am a happy AAPL share owner.
It may cower us to argue with someone who has a "Dr" attached to his/her name (Is is MD or PhD?)***, especially after someone who bandied his Ivy league credentials to be one support for his arguments, but let me join the fray.
I will ignore posts that begin with idiotic personal insults. This one is more laughable than you can even know, or at least care to apparently.
Quote:
Originally Posted by brucep
sorry
apples stock price is partly based on its cash .
ok
9
Not okay, because it isn't. Stock valuations are based on earnings. Go ahead and look for any measure of stock valuation that includes cash or debt. You won't find one.
Quote:
Originally Posted by stelligent
Distribute the cash "back" to the stockholders? If you agree we don't own it in the first place, then what's up with distributing it "back" to us? And I think someone else has settled the issue of ownership, or rather non-ownership.
Yes, it is good corporate management to invest it. And they are! No, it is not good corporate management to distribute it to shareholders. That doesn't benefit the company in any way unless the company stock needs a short term artificial boost. Regardless of motherhood statements, good corporate management is not about putting shareholders' desires at the top of the heap. The smartest way to use that money is to give out bonuses to the best engineers to encourage them to keep working 24/7.
Again, nothing to do with ownership and everything to do with the fiduciary relationship. Everything else I've said seems to have gone right over your head. No, they are not investing it. If you don't know what I mean by investing cash flow in growing a company, then maybe you need to start with first principles.
No, it is not good management to stockpile cash. Most other companies with large cash reserves pay dividends. Apple is becoming one of a small minority not to do so.
Quote:
Originally Posted by stelligent
You're kidding, right? The money the stockholders invest? Apple does not see the cash we "invest". Oh boy, are you out to lunch!
Again, you don't seem to have a grasp of the first principles of how the equity markets work. It's difficult to have a productive discussion with someone who holds strong opinions but doesn't seem to understand the basics.
But my point here (along with a couple of others) is that we DON'T own the cash or the company. So I don't understand why you're telling me to sell my stock. I am a happy AAPL share owner.
I did not make myself clear. That was a volley shot for the other delusional stockholders who believe they can run the company better than Steve Jobs, the management and the Board. Or that they can demand, and expected to be followed that dividends must be distributed simply because the cash is growing.
This has nothing to do whether we agree or not on who owns the money. After all, if you are a stockholder, and Apple did decide to give away the 60 billion they must now have, then you get a share of that largesse. In this sense, you are a part owner of that cash -- you just cannot demand to have it disbursed simply because you want to.
Unless it is so structured in the charter (like those companies) with dividend earning shares while common shares do not, would it be legal to a situation where dividends are given to only a few select stockholders at the discretion of Steve Jobs or Apple or the Board?
In either scenario, you have a stake in that cash as a stockholder. The caveat is that one cannot insist like a spoiled kid or an arrogant person that one must have it simply they proclaimed that it be so. To this people, any other reaction to their delusions as stockholders is denigrated either "ludicrous" or simply wrong. They have after all the Ivy league degree in finance or whatever higher education to prove the infallibility of their reasoning.
If they believe that they are within the charter of the corporation and the law, they should just band together to topple those "pigheaded" management at Apple, so that they could run the company themselves. Failing that, do what many unsatisfied Apple customers do -- file a class action lawsuit. Not that it will go anywhere.
Quote:
Originally Posted by Dr Millmoss
I will ignore posts that begin with idiotic personal insults. This one is more laughable than you can even know, or at least care to apparently..
And yet, you singled out and responded that very statement -- which wasa significant point of the post by way. It was a response to people who simply dismiss the reasoning of others as ludicrous, ridiculous or incorrect simply because they believe their opinion is the correct one, ergo, everything else is and everyone must be ridiculous, or to use your term, ludicrous.
In response to another poster:
Quote:
Originally Posted by Dr Millmoss
Again, you don't seem to have a grasp of the first principles of how the equity markets work. It's difficult to have a productive discussion with someone who holds strong opinions but doesn't seem to understand the basics.
Wow! Such pomposity! Does a "put down" come as second nature when more logical rebuttal is not forthcoming? Are you in any way implying that you have mastered the principles of how equity equity markets works.... and that only you therefore is capable of "productive discussions" because you have already proclaimed the other person does not seem to understand the basics?
A doctorate in Economics or equity market perhaps gave you those credentials? Something that is outside of the bounds of mere mortals to fathom?
So, how come Apple does not play the laws you have proclaimed to be the principles of how equity economics work? Or Apple not playing by the proclaimed principles of how equity economics work the very logic that the company is in the wrong?
Sound logic that.
Note the nuance in my response to the same person. I may disagree with his/her concept of ownsership but since he did not predicate his response with a "put down", I put forward a clarification of my point without having to couch about his/her lack of "understanding of the basics". I considered the possibility that my response may be flawed, and gave him/her the chance to reason with me, prove me incorrect by clarifying his position.
How does a response: "without understanding the basics" elaborate your position? Unless of course, there is a better discourse to put forward logic more than the Socratic Discourse? A put down discourse perhaps, put forward by a "Dr. Millmoss" school of thought? Soon to replace the Socratic method?
Ridiculous, ludicrous must be less of a personal attack or insult when it comes from someone with a more educated background, perhaps? Or is it nothing, pure and simple, but a put down, to ridicule or denigrate others that do not share our perspective?
Not that I am not prone to taking such potshots, as in making fun of people using the term ludicrous or in the case of the other person, using Ivy league credentials in support of his/her reasoning. *grins*
I can be as insulting to people who predicate their statement or summarize the reasoning of others with generalizations like ludicrous. How preposterous and arrogant -- especially coming from someone who go by a title "Dr.".
One can be an Ivy league graduate, or a Doctor (MD or PhD), or whatever, and yet be wanting in their power to reason, and using ludicrous to denigrate or deride the reasoning of others does not improve the logic of your statement.
But frankly my dear, even if you do not give a damn (to paraphrase someone else), it is bad form among those with advanced degrees to be advertising the level of their education or profession in forums like this. I do not know what circle you are in, but you will be laughed at, and be laughable in the academia or in more serious settings -- at least behind your back.
I cringe even in informal settings
Even among undergraduates, especially in Ivy league schools, you will develop an "impression" simply by usiing such titles. It may impress K-12 or some other junior colleges but even that wil be lost in them if you insist in proclaiming their attempts to reason with you as "ludicrous" simply because they may not see your perspective -- if you have a point at all.
In response to the same poster you ridiculed above with your "put downs":
Quote:
Originally Posted by Dr Millmoss
No, it is not good management to stockpile cash. Most other companies with large cash reserves pay dividends.
Good management is your expertise perhaps? A doctoral research dissertation? Or is it from running a company yourself? Please enlighten us with your grasp of the basic principles on good management. I have no grasp of marketing at all, let alone running a company.
Quote:
Originally Posted by Dr Millmoss
Apple is becoming one of a small minority not to do so.
Microsoft is doing better than Apple for distributing dividends? Can you please name five companies in the technology industry that is distributing dividends and doing better than Apple? Or, do you happen to have a different criteria for good management?
A correlation study perhaps on those dividend yielding technology companies and those not disbursing dividends? Or, is your proclamation simply common sense that everyone should know?
And Apple has been hurting since their stockpile of cash has been growing? For adhering to the mantra: "Think Different!"?
Is it your most educated prediction that they will go down from the pinnacle they now reached because of hoarding this cash?
Just curious, since you decided that they are not really "investing those cash"*** where do you want them to invest the money, if they do decide not to return them to clamoring minority stockholders?
To another poster:
Quote:
Originally Posted by Dr Millmoss
Not okay, because it isn't. Stock valuations are based on earnings. Go ahead and look for any measure of stock valuation that includes cash or debt. You won't find one.
Just exactly how to you define stock valuation? I stopped requesting Charles Schwab detailed reports of companies the moment I decided early on that I do not have time to be poring through thousands of companies then trying to pick a few. I decided to use mutual funds exclusively. But in tohose detailed reports, the "stock valuations" that is the advisory their analyst department gave me including all sorts of parameters, including P/E, debt and cash reserve, growth potential, etc. And, for growth companies, it is a given than they may not be giving dividends, so that is not included in the stock valuation.
Most especially in the case of Apple, analysts put so much emphasis in the personality of Steve Jobs in vakuating the worth of Apple. Thus, every move of Steve Jobs, that may shed light on his health is quite scrutized. So, these tangibles and intangibles are not included in stock valuation?
Just earnings? which by the way is a post facto manifestations of all the above? If I were to invest in a stock, what good is a post facto number? It would be obsolete even before it is out, unless taken in the context of other variables, including non-intangibles.
But, let us presume that the we cannot agree on that and you believe your perspective is infallible. Did the stock valuation of Apple continue to decline, as its cash hoard continue to go up?
It is a rhetorical question of course, but I will give you a chance to use your grasp of good management and how companies are run and should behave take a crack on sorry stage of Apple stock valuation.
CGC
***If I am not mistaken that is why they are called "liquid assets" or "securities", they are almost as secure as cash. Or, do you expect liquid assets to be invested too?
That's not true. There is an end to how it pleases the market. Stock investors value dividends. It's a continuum, not an on/off switch, but past a certain point, additional cash is undervalued by the stock market.
Are you saying that investors would rather own MSFT over Apple during the last 15 or 20 quarters ..... because MSFT pays dividends ... and Apple does not????? How has paying dividends worked out for them?
You just don't get it. Leading with an insult gets no response from me.
You have been asked by others legitimate questions, in response to your posts.
And yet, you specialized in ridiculing others? Dismiss their attempts to reason with you. You must be an exception to your own rule.
Precious.
The funny thing is that you are still responding. *grins"
And really, I am just "clarifying" your proclamations about good management and all that. The responses are rhetorical, exposing the weaknesses and the flaws of your edicts. And need not require a response, per se. They can stand on their own, or rebutted by other who want to engage.
Next time, do not be condescending of others, if you cannot take the heat yourself. Unless you are in any delusion that your responses to a number of people have not been condescending, or that you believed your proclamations must be facts, beyond any shed of a doubt.
Good luck with that. This is supposedly a forum, not a one way street.
I can be very scathing to pomposity, to racist, and to those who tend to bend the truth. Otherwise, I can be very civil, even if I disgree with their perspective. I consider the possibility that I may not be correct -- even in my most scathing moments. *grins*
I'm responding with the basic ground rules for a civil discussion. Every one of your responses includes an ad hominem, or several. I don't read past personal attacks. So now you know how to have a discussion with me. The question is whether you want to.
Comments
Apple spins off more cash than that in one quarter. You do realize that if 5 billion is good, 55 billion is NOT 11 times as good, right?
So maybe they stop at 10 billion? 15? 20? 30? 45? NEVER? They should NEVER give the cash back to its rightful owners, the owners of the company?
Oh I know I know! Because Apple has 60 billion in the bank? Thank god they didn't only have $20 billion, then they could have NEVER afforded to lock up the worldwide supply of touch panels. With 60 billion they can lock up the worldwide supply for 20 years! And they SHOULD! Riiiight.
That 3.9 billion wasn't cash though, it was a committment to buy. Apple didn't use any of its existing cash pile to buy those parts, it used cash from operations. So, sorry, your argument falls flat.
Yeah, they'd be feeling the pain. See my previous post.
Really people, if you don't understand finance, please don't comment. You look ridiculous.
Do you by any chance run a multi-billion dollar company? And, a very very biig one too?
Warren Buffett has so much cash (almost more than Apple), and he does not know what to do with it If he is not very careful any purchase he makes can trigger stock price escalation, and that will affect his buying strategy. He may be able to use your financial expertise.
Oh, by the way, Microsoft has a pile of cash reserve too.even if the company has quite a bit of debt. Their stock price is going down, in spite of all their efforts the past decade. Ballmer may welcome your expertise more than Steve Jobs.
Dell...that is another company that can use any financial and marketing strategy expertise right now. Maybe even Dell will listen to you.
Maybe if you and Dell put your mind together, you combined expertise in running big companies could persuade Steve Jobs that he is hurting Apple for hording so much money.
Tell him stock buyers are fleeing Apple like lemmings because he is too stubborn keeping his 50-60 billion instead of sharing the wealth.
Tell him, Apple may lose its edge being so cash-rich.
But don't cry if he won't take your brilliance. Jobs happen to be dumb and not a financial guru like you. Steve Jobs, the fool that he is might just quip:
"I like our strategy. I like it very much."***
Apple after all, the largest technology company in the world. Just more than a decade after that infamous quip by Micheal Dell.
Now, if you happen to have biilions in your own pocket, or have suckers who are willing to entrust their money to you, maybe start a company, or buy a company (Dell, RIM, Nokia), and apply your expertise saving them. When you succeed, I may even buy your book when your write your memoirs.
Until you can prove your mettle, I doubt very much that your reasoned postings in a site like Apple Insider would make you the financial expert that you pretend to be.
Do you actually believe yourself?
I have an economics degree from an Ivy league school for christ's sake.
And this declaration makes your argument infallible? For your information, the economic theory that got us into a debacle, triggering one of the worst economic collapse worldwide were economist from Ivy league schools and even were awarded the Nobel Prize for their economic theory.
By the way, George W. Bush graduated from an Ivy league school too. It did not stop him from invading Iraq because he thought there were weapons of mass destruction in Iraq. And look how many billions and trillions of dollars that cost us. Not to mention the lives not only of Americans but more the Iraqis who were to suffer the "beliefs of an Ivy league graduate".
CGC
***Not that Steve Jobs is prone to quoting other people.
The main reason why the Japanese Nuclear reactor failed. and reactors like it are more prone to fail is that it is based on a very dangerous technology -- the light water nuclear reactor technology, a US-developed technology that has its origins from the Manhattan project. Westinghouse, once one of the largest companies during its time, in fact spun all of its other divisions (ca 1970s???) to focus on its nuclear reactor business based on the light water nuclear reactor technology.
Light water (H2O) does not have the extra neutron found in D2O (heavy water) to serve as very efficient nuclear moderator for the splitting radioactive (unstable) isotope of uranium (see below).
This inefficiency of light water as a neutron moderator was not issue with the US because it has been enriching uranium already since World War II -- so nuclear power for "peaceful uses", like electricity production is just adding to the "economies of scale" in using the "enriched uranium" technology that is central in the military power play during the era since World War II.
When Canada wanted to explore the use of nuclear power, it has to take a stock at its capabilities and size as a nation. It does not have a very large population, and more important, it does not have the "enrichment technologies" already in place to use in a light water based nuclear reactor. It would be dependent on the US or other countries as source of the "enriched uranium" for its nuclear reactors. There's more but that will be later.
With this as a backdrop, Canadian scientists explored other possibilities. I do not recall now, if the Canadians pioneered it, but Canada decided to develop a nuclear technology they dubbed CANDU using the concept of "heavy water" nuclear reactor.
Heavy water nuclear technology uses heavy water (D2O), an isotope of water with extra neutron. Under certain conditions, that extra neutron in heavy water (D2O) can be released to a very reactive (unstable) neutron, plus a very safe light water (H2O).
,Asi turned outt the more reactive ( neutron in heavy water(D2O) is very efficient, more so than light water, in capturing and moderating the neutrons released even in only slightly enriched uranium or high grade uranium minerals, not too significantly higher than what is already found in "ordinary uranium minerals.
It is too technical to explain here but there are pros and cons for each technology.
For the US, its huge military-industrial complex almost required further uses of enriched uranium, thus the preference of light water nuclear technology for power plants. It does not hurt that light water is every where and almost free to serve as "coolant" for the reactor.
Heavy water has to be synthesized or "harvested" by enrichment using seawater (as raw material). Too complex to elaborate here, but I think Canada uses the latter (not too sure now). So, it is more expensive in that regard.
However, since the heavy water nuclear reactor does not need highly enriched uranium, that alone would offset the cost of the heavy water. But, there is more"
Remember that the heavy water is needed for the nuclear reaction to be triggered in a heavy water reactor. So, in case some mishap happened. How do you stop nuclear reaction?
Very simple -- just remove the uranium rods from the heavy water pool. There are also neutron absorbers used.to regulate neutron released. The Canadians were even wise enough to "segment" the uranium rods in the reactor pile.
So, because of the simplicity of the heavy reactor nuclear technology, it does not require those very thick metals and "catastrophy" domes that is associated with light water reactors. However, reinforced thick domes are also used even in heavy water nuclear reactors simply because we are still talking about highly radioactive materials.
And, the advantage does not end there. Since the heavy water use only slightly enriched uranium. the spent uranium rods are not as lethal as the by products of spent rods from highly enriched uranium (it includes plutonium as well as highly radioactive materials that last for thousands of years). So, processing the spent rods of only slightly enriched uranium is not much of a problem. [I am not sure now, but if I am not mistaken, the spent rods from CANDU reactors are shipped either to the US or France.]
Oue choices matter. Thus, had Japan opted to use technologies, like the CANDU technology, there would have been no massive evacuations, even in the aftermath of such a catastrophic earthquake and tsunami. In fact, had the main reactor (if based on CANDU, or heavy water nuclear reactor were in place), the loss of the heavy water would have shut down the nuclear reaction (and further minimized with neutron absorbers).
You might ask, if it were that straightforward, why isn't every nation using the heavy water nuclear reactor technology? The 1950-1960's wass the era of the cold war. The power of nuclear weapons played a pivotal role in the "brinkmanship diplomacy at the time. He who has the bigger gun has a greater voice in such scenario. What bigger gun than a nuclear weapon -- that to this day has become the symbol of nations to become part of a very elite club among nations. Enriched uranium is key is the "nuclear socio-political scenario". Its use in a more peaceful setting is just an added bonus, and a great propaganda. Selling the technology also to other nations is big business. And, since it is one of the few high-tech products that the US excelled in, with "political fund junket" pushed by companies, like Westinghouse, I would not be surprised if "buying nuclear reactors technology" from the US was in the agenda.
The other thing is risk-case scenario analysis used in technology deployment. This is well and good, until the unlikely scenario come into play.
Terrorism threat. The other very dangerous issue with spent rods from light water reactors is that the radioctive materials in those spent rods are so lethal. they can be enriched to create nuclear bombs; but even without developing nuclear bombs, as they are they can be used to create what are called dirty bombs. Just like in Chernobyl, their release could render a place inhabitable to human beings for hundreds, if not thousands of years.
Imagine those dirty bombs being released in New York, Los Angeles, Houston. Chicago, and other large cities in the world. September 11, 2001 would pale in comparison. The psychological impact alone, if it happens in the US can destabilize the market, and financial institutions, and eventually the mainstream economy.
The heavy water nuclear reactor, because of the deuterium (in D2O) produced more tritium in the resulting heavy water compared to light water reactors. However, tritium is a very low energy radioactive emitter (a thin plastic film can shield you) and very much shorter half life compared to other by-products of radioactive uranium decay. Just don't drink tritiated water though.
CGC
I should point out that within the reactor itself, light water (not sea water) serves also in the traditional steam generation to produce electricity. The heavy water has a different function in heavy water nuclear reactor technology. The heavy water also serve as a moderator, once more neutrons are released from the splitting unstable uranium. The process lead to thermal energy conversion of the energy released in the splitting uranium atom. This thermal energy is then transferred to steam generation using light water Inot seawater) as intermediary medium. Steam release kinetic energy that turns the steam turbines that then generate the electricity from nuclear reactors.
Note also that the same process, a nuclear fission process, occurs in both technologies. However, because of the difference in raw materials used, what is referred to as spent rods are different in the two reactors, more toxic in concentration from the spent uranium rods in lightwater nuclear reactor technology. The radioactive by-products of the nuclear reaction. such as plutonium may be enriched (or also used in a different way) in breeder nuclear reactors. But plutonium is even more deadly than radioactive uranium. The stable isotope of uranium (the highest proportion in uranium minerals) is not radioactive.
Here's a photo of a CANDU nuclear reactor facility in China, which does not look too different from the usual industrial building:
Wikipedia provides information about both technologies that should be readily understood by the layperson.
I have not followed the technology but the last time I read about it, the Canadians did further improvements from their earlier prototypes, including the use of slightly more enriched uranium for more efficient power generation. Only a few countries have opted for CANDU, and that is not because it is inferior. That is where geo-politics come into play during high level trade agreements.
There is yet a third technology using graphite as the "neutron" moderator.
It's that last part, right before the etc, that I take issue with.
Apple won't keep the hoard forever. And when they bend to the will of their shareholders, you'll believe that they were right to wait so long and keep holding the shareholders' money.
My answer is irrelevant because I see you now understand (concede) that shareholders do not own the cash. Thanks for not dragging this debate into the gutters like others do.
The entire question of who "owns" the cash is ludicrous, if only because it completely misses the point. The board of directors of a public corporation has a fiduciary responsibility to the stockholders. This part of the deal they accept when they go public and seek outside investors. They are supposed to use the money the stockholders invest to grow the company's business, and if the business is a good one, the stockholders will benefit.
The problem with Apple's cash hoard isn't that the stockholders somehow "own" it, but that Apple's board has indicated no plan to use it for growing the company, which under the system called capitalism is its only purpose. Failing that purpose, the board has a fiduciary responsibility to the stockholders to distribute some of it back to the stockholders. They should do one or the other because it's simply good corporate management to either invest cash flow or give it the stockholders if they can't invest it. The matter of ownership never enters in.
It may cower us to argue with someone who has a "Dr" attached to his/her name (Is is MD or PhD?)***, especially after someone who bandied his Ivy league credentials to be one support for his arguments, but let me join the fray.
The ownership of the company does matter and not ludicrous. And, technically the stockholders own the company. In theory, if there are enough stockholders who decide to have contrary views opposed to the decisions of the Board then they could call a point of order to be heard, and for a decision to be made or even oust the Board and change the policies of the company.
It never happens these days because most corporations have as their largest stockholders are cumulatively mainly institutions (non-profits, mutual funds, state or retirement funds managers, etc.) who are themselves run by yet another tier of "professionals".
During his waning days, John Kenneth Galbraith wrote a short book based on his treaties about the management of corporations and multinationals. In that damning book, he bemoaned the ascendance of a Board of Directors mindset that cease to work for the stockholders they represent but more for their own advancement. This is no different from politicians who forgot that they represent the voters that placed them into office.
I do not think stockholders are really true investors these days the way a family run business would make short term sacrifices for the long term good of the family business. Today's stockholders are more motivated by how much their money earns in the shortest time possible. And that is even more true among the professional managers that run mutual, foundation or retirement funds. They know that if their return is not up to par with the "average" returns, they will lose their jobs.
As to the issue of the ownership of the cash, it is not so much that the stockholders do not own the company or do not have a stake to that cash just because they are the last to have a hold of the money in case of a bankruptcy. This is just the law, and a correct law. That as part owners of a company, it is your financial duty to pay all obligations before you get your share of the pie.
Now, as to whether Apple should or should not "return" part of that hoard to the stockholders is another matter. For as long as Apple is doing good, there will be enough stockholders who would not mind entrusting their faith on Steve Jobs and the Board on how to deal with that money -- notwithstanding all the grumblings from "Ivy league" graduates and those with "Dr." attached to their credentials.
As pointed out by one of the posters, the new Apple has not declared any dividends (???) since it came out from its near bankruptcy ca. 1997. For as long as Apple is doing well, there will be enough stockholders who would agree not to rock the boat, and let the Steve Jobs. the management and the Board run the company as they are doing now.
And no judge will have any credence or legal foundation second-guessing the decision of the Management and the Board.
CGC
***What I learned when I came to the US to study, is that those in the academe never use their degree or credentials, except in professional correspondence. This is especially true among those who graduated with a PhD. But, even those with an MD seldom use their degree in more collegial settings, and prefer to be addressed by their first names. The more accomplished ones are even more conscious about this informal "understanding".
It is a different matter when they see patients.
Well, at least that was my experience. I remember when I first came to the US, I arrived well past midnight because the plane was delayed. I did not expect to be met by anyone but was apprehensive because I had never been out of my country before then, and I would literally be lost.
Then, out of the corner along my way to find the baggage claim, this older gentleman puffing his cigar introduced himself simply as "Hi, I am Bob". Even in my befuddled state (time difference, tired and all) and not having slept for more than a day, and not having seen his picture before, I had the presence of mind to know that there was no other Bob, but the Chairman of the Department, Editor and members of the editorial boards of quite a few scientific journals, a recognized authority in his field, etc., etc.
What I found later on was that Department Chairmen were never the ones that meet lowly students, or even their prestigious guest speakers, or Nobel Prize winners. As to why he came and waited for me well past midnight, and even reserved a hotel for me for a week at the Department's expense was another long story.
The thing was, he was not the exception, even those with even more prestigious credentials.
It pleases the stock markets not at all. No metric of stock performance is based on or includes cash. Or debt, for that matter. Cash reserves are utterly meaningless numbers to stockholders unless the company pays some of it out as dividends. In fact a company holding huge cash reserves without any obvious or even theoretical plans for spending it on growth raises all sorts of questions.
'Fraid not. Nobody buys a stock for a company's cash, unless they are planning on taking over the company.
sorry
apples stock price is partly based on its cash .
ok
9
The entire question of who "owns" the cash is ludicrous, if only because it completely misses the point. The board of directors of a public corporation has a fiduciary responsibility to the stockholders. This part of the deal they accept when they go public and seek outside investors. They are supposed to use the money the stockholders invest to grow the company's business, and if the business is a good one, the stockholders will benefit.
The problem with Apple's cash hoard isn't that the stockholders somehow "own" it, but that Apple's board has indicated no plan to use it for growing the company, which under the system called capitalism is its only purpose. Failing that purpose, the board has a fiduciary responsibility to the stockholders to distribute some of it back to the stockholders. They should do one or the other because it's simply good corporate management to either invest cash flow or give it the stockholders if they can't invest it. The matter of ownership never enters in.
Distribute the cash "back" to the stockholders? If you agree we don't own it in the first place, then what's up with distributing it "back" to us? And I think someone else has settled the issue of ownership, or rather non-ownership.
Yes, it is good corporate management to invest it. And they are! No, it is not good corporate management to distribute it to shareholders. That doesn't benefit the company in any way unless the company stock needs a short term artificial boost. Regardless of motherhood statements, good corporate management is not about putting shareholders' desires at the top of the heap. The smartest way to use that money is to give out bonuses to the best engineers to encourage them to keep working 24/7.
They are supposed to use the money the stockholders invest to grow the company's business.
You're kidding, right? The money the stockholders invest? Apple does not see the cash we "invest". Oh boy, are you out to lunch!
You're kidding, right? The money the stockholders invest? Apple does not see the cash we "invest". Oh boy, are you out to lunch!
Technically, you are correct. Unless a company is at incubation stage or issues new stocks for expansion, there is no new capital coming in -- just a change in ownerships of stocks, the seller believing the company is overvalued (or no longer is attractive or meet criteria), while the buyer sees an opportunity. But clueless stockholders believe there is infusion of new cash" into the coffers of the company simply because they bought stocks. This "sense of ownership" make delusional stockholders Iif they even are to start), with Ivy league credentials to think that they can run a company because they finished a finance degree in an Ivy league school, or something. *grins*
The change in ownership of stocks matter only when there are rapid swings that can destabilize the company, or there is a stampede when a company is not in good financial health. The reverse may apply, greedy stockholders, in spite of all their bluster, are not likely to divest of a company that is doing very well, and that lead to overvaluation because other greedy stockholders also want a piece of the action -- if not for the returns, but some hedonistic belief that they may have something to do with the success of such companies.
Alas, there are not too many investors anymore in the strictest sense of the word, investor. Today's individual stock buyers -- daytrade or short term stockholders, short or do long bets in an attempt to beat the average Index.
Majority of the stockholders, do not even know where their money (mutual funds, retirement funds, etc.) are allocated anymore. All that becomes a criteria wold be the rate of return over similar funds.
And many people should not even attempt to own individual stocks to begin with.
As to whether a company should or should not give out dividends is another story altogether. You do realize that some people do require dividends as a form of steady income. Retirees for example have no use for long term gains, especially if they may die any time between now and then. In this case, Apple may not be correct inbestment for them.
However, the issuance of dividends is not strictly speaking incongruent with good management of a company, nor of giving rewards to deserving employees. But, on the whole I agree, that Apple need not succumb to the delusional demands here, simply because they believe that Apple is beholden to them.
There is a simpler solution to that especially if you own only a few shares, if any -- sell your stocks if you do not agree with company management and Board. Or, go to tech companies that provide dividends. Like Microsoft perhaps? Oh wait....
CGC
But clueless stockholders believe there is infusion of new cash" into the coffers of the company simply because they bought stocks. This "sense of ownership" make delusional stockholders Iif they even are to start), with Ivy league credentials to think that they can run a company because they finished a finance degree in an Ivy league school, or something. *grins*
...
There is a simpler solution to that especially if you own only a few shares, if any -- sell your stocks if you do not agree with company management and Board. Or, go to tech companies that provide dividends. Like Microsoft perhaps? Oh wait....
CGC
But my point here (along with a couple of others) is that we DON'T own the cash or the company. So I don't understand why you're telling me to sell my stock. I am a happy AAPL share owner.
It may cower us to argue with someone who has a "Dr" attached to his/her name (Is is MD or PhD?)***, especially after someone who bandied his Ivy league credentials to be one support for his arguments, but let me join the fray.
I will ignore posts that begin with idiotic personal insults. This one is more laughable than you can even know, or at least care to apparently.
sorry
apples stock price is partly based on its cash .
ok
9
Not okay, because it isn't. Stock valuations are based on earnings. Go ahead and look for any measure of stock valuation that includes cash or debt. You won't find one.
Distribute the cash "back" to the stockholders? If you agree we don't own it in the first place, then what's up with distributing it "back" to us? And I think someone else has settled the issue of ownership, or rather non-ownership.
Yes, it is good corporate management to invest it. And they are! No, it is not good corporate management to distribute it to shareholders. That doesn't benefit the company in any way unless the company stock needs a short term artificial boost. Regardless of motherhood statements, good corporate management is not about putting shareholders' desires at the top of the heap. The smartest way to use that money is to give out bonuses to the best engineers to encourage them to keep working 24/7.
Again, nothing to do with ownership and everything to do with the fiduciary relationship. Everything else I've said seems to have gone right over your head. No, they are not investing it. If you don't know what I mean by investing cash flow in growing a company, then maybe you need to start with first principles.
No, it is not good management to stockpile cash. Most other companies with large cash reserves pay dividends. Apple is becoming one of a small minority not to do so.
You're kidding, right? The money the stockholders invest? Apple does not see the cash we "invest". Oh boy, are you out to lunch!
Again, you don't seem to have a grasp of the first principles of how the equity markets work. It's difficult to have a productive discussion with someone who holds strong opinions but doesn't seem to understand the basics.
But my point here (along with a couple of others) is that we DON'T own the cash or the company. So I don't understand why you're telling me to sell my stock. I am a happy AAPL share owner.
I did not make myself clear. That was a volley shot for the other delusional stockholders who believe they can run the company better than Steve Jobs, the management and the Board. Or that they can demand, and expected to be followed that dividends must be distributed simply because the cash is growing.
This has nothing to do whether we agree or not on who owns the money. After all, if you are a stockholder, and Apple did decide to give away the 60 billion they must now have, then you get a share of that largesse. In this sense, you are a part owner of that cash -- you just cannot demand to have it disbursed simply because you want to.
Unless it is so structured in the charter (like those companies) with dividend earning shares while common shares do not, would it be legal to a situation where dividends are given to only a few select stockholders at the discretion of Steve Jobs or Apple or the Board?
In either scenario, you have a stake in that cash as a stockholder. The caveat is that one cannot insist like a spoiled kid or an arrogant person that one must have it simply they proclaimed that it be so. To this people, any other reaction to their delusions as stockholders is denigrated either "ludicrous" or simply wrong. They have after all the Ivy league degree in finance or whatever higher education to prove the infallibility of their reasoning.
If they believe that they are within the charter of the corporation and the law, they should just band together to topple those "pigheaded" management at Apple, so that they could run the company themselves. Failing that, do what many unsatisfied Apple customers do -- file a class action lawsuit. Not that it will go anywhere.
I will ignore posts that begin with idiotic personal insults. This one is more laughable than you can even know, or at least care to apparently..
And yet, you singled out and responded that very statement -- which wasa significant point of the post by way. It was a response to people who simply dismiss the reasoning of others as ludicrous, ridiculous or incorrect simply because they believe their opinion is the correct one, ergo, everything else is and everyone must be ridiculous, or to use your term, ludicrous.
In response to another poster:
Again, you don't seem to have a grasp of the first principles of how the equity markets work. It's difficult to have a productive discussion with someone who holds strong opinions but doesn't seem to understand the basics.
Wow! Such pomposity! Does a "put down" come as second nature when more logical rebuttal is not forthcoming? Are you in any way implying that you have mastered the principles of how equity equity markets works.... and that only you therefore is capable of "productive discussions" because you have already proclaimed the other person does not seem to understand the basics?
A doctorate in Economics or equity market perhaps gave you those credentials? Something that is outside of the bounds of mere mortals to fathom?
So, how come Apple does not play the laws you have proclaimed to be the principles of how equity economics work? Or Apple not playing by the proclaimed principles of how equity economics work the very logic that the company is in the wrong?
Sound logic that.
Note the nuance in my response to the same person. I may disagree with his/her concept of ownsership but since he did not predicate his response with a "put down", I put forward a clarification of my point without having to couch about his/her lack of "understanding of the basics". I considered the possibility that my response may be flawed, and gave him/her the chance to reason with me, prove me incorrect by clarifying his position.
How does a response: "without understanding the basics" elaborate your position? Unless of course, there is a better discourse to put forward logic more than the Socratic Discourse? A put down discourse perhaps, put forward by a "Dr. Millmoss" school of thought? Soon to replace the Socratic method?
Ridiculous, ludicrous must be less of a personal attack or insult when it comes from someone with a more educated background, perhaps? Or is it nothing, pure and simple, but a put down, to ridicule or denigrate others that do not share our perspective?
Not that I am not prone to taking such potshots, as in making fun of people using the term ludicrous or in the case of the other person, using Ivy league credentials in support of his/her reasoning. *grins*
I can be as insulting to people who predicate their statement or summarize the reasoning of others with generalizations like ludicrous. How preposterous and arrogant -- especially coming from someone who go by a title "Dr.".
One can be an Ivy league graduate, or a Doctor (MD or PhD), or whatever, and yet be wanting in their power to reason, and using ludicrous to denigrate or deride the reasoning of others does not improve the logic of your statement.
But frankly my dear, even if you do not give a damn (to paraphrase someone else), it is bad form among those with advanced degrees to be advertising the level of their education or profession in forums like this. I do not know what circle you are in, but you will be laughed at, and be laughable in the academia or in more serious settings -- at least behind your back.
I cringe even in informal settings
Even among undergraduates, especially in Ivy league schools, you will develop an "impression" simply by usiing such titles. It may impress K-12 or some other junior colleges but even that wil be lost in them if you insist in proclaiming their attempts to reason with you as "ludicrous" simply because they may not see your perspective -- if you have a point at all.
In response to the same poster you ridiculed above with your "put downs":
No, it is not good management to stockpile cash. Most other companies with large cash reserves pay dividends.
Good management is your expertise perhaps? A doctoral research dissertation? Or is it from running a company yourself? Please enlighten us with your grasp of the basic principles on good management. I have no grasp of marketing at all, let alone running a company.
Apple is becoming one of a small minority not to do so.
Microsoft is doing better than Apple for distributing dividends? Can you please name five companies in the technology industry that is distributing dividends and doing better than Apple? Or, do you happen to have a different criteria for good management?
A correlation study perhaps on those dividend yielding technology companies and those not disbursing dividends? Or, is your proclamation simply common sense that everyone should know?
And Apple has been hurting since their stockpile of cash has been growing? For adhering to the mantra: "Think Different!"?
Is it your most educated prediction that they will go down from the pinnacle they now reached because of hoarding this cash?
Just curious, since you decided that they are not really "investing those cash"*** where do you want them to invest the money, if they do decide not to return them to clamoring minority stockholders?
To another poster:
Not okay, because it isn't. Stock valuations are based on earnings. Go ahead and look for any measure of stock valuation that includes cash or debt. You won't find one.
Just exactly how to you define stock valuation? I stopped requesting Charles Schwab detailed reports of companies the moment I decided early on that I do not have time to be poring through thousands of companies then trying to pick a few. I decided to use mutual funds exclusively. But in tohose detailed reports, the "stock valuations" that is the advisory their analyst department gave me including all sorts of parameters, including P/E, debt and cash reserve, growth potential, etc. And, for growth companies, it is a given than they may not be giving dividends, so that is not included in the stock valuation.
Most especially in the case of Apple, analysts put so much emphasis in the personality of Steve Jobs in vakuating the worth of Apple. Thus, every move of Steve Jobs, that may shed light on his health is quite scrutized. So, these tangibles and intangibles are not included in stock valuation?
Just earnings? which by the way is a post facto manifestations of all the above? If I were to invest in a stock, what good is a post facto number? It would be obsolete even before it is out, unless taken in the context of other variables, including non-intangibles.
But, let us presume that the we cannot agree on that and you believe your perspective is infallible. Did the stock valuation of Apple continue to decline, as its cash hoard continue to go up?
It is a rhetorical question of course, but I will give you a chance to use your grasp of good management and how companies are run and should behave take a crack on sorry stage of Apple stock valuation.
CGC
***If I am not mistaken that is why they are called "liquid assets" or "securities", they are almost as secure as cash. Or, do you expect liquid assets to be invested too?
That's not true. There is an end to how it pleases the market. Stock investors value dividends. It's a continuum, not an on/off switch, but past a certain point, additional cash is undervalued by the stock market.
Are you saying that investors would rather own MSFT over Apple during the last 15 or 20 quarters ..... because MSFT pays dividends ... and Apple does not????? How has paying dividends worked out for them?
And yet... (personal attack deleted)
You just don't get it. Leading with an insult gets no response from me.
You just don't get it. Leading with an insult gets no response from me.
You have been asked by others legitimate questions, in response to your posts.
And yet, you specialized in ridiculing others? Dismiss their attempts to reason with you. You must be an exception to your own rule.
Precious.
The funny thing is that you are still responding. *grins"
And really, I am just "clarifying" your proclamations about good management and all that. The responses are rhetorical, exposing the weaknesses and the flaws of your edicts. And need not require a response, per se. They can stand on their own, or rebutted by other who want to engage.
Next time, do not be condescending of others, if you cannot take the heat yourself. Unless you are in any delusion that your responses to a number of people have not been condescending, or that you believed your proclamations must be facts, beyond any shed of a doubt.
Good luck with that. This is supposedly a forum, not a one way street.
I can be very scathing to pomposity, to racist, and to those who tend to bend the truth. Otherwise, I can be very civil, even if I disgree with their perspective. I consider the possibility that I may not be correct -- even in my most scathing moments. *grins*
CGC