It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness ~ Charles Dickens’ A Tale of Two Cities
Researching some historical data lately, I stumbled across an old article about Apple Computer, circa 1997. As a value investor, my interest was peaked, one search lead to another, until my focus zoned in on one particular date: July 9, 1997. I was mesmerized.
Here are a few snippets of my findings:
”We’re out of the business of predicting when this company will return to profitability,” Fred Anderson Apple CFO New York Times, July 10, 1997
“The brand name is still worth something,” said David Wu, an analyst with ABN Amro First Chicago Cincinnati Enquirer 7/11/1997
Headline: “Apple shares hit new low – Investors voice concern over Power Computing’s Shift to PC Clones” – CNN Money 7/3/1997
“…Apple badly needs a sense of direction and vision if it is going to come back,” Richard Shaffer from Technological Partners, New York Times, July 10, 1997
On July 9th, 1997 Gil Amelio was relieved of his duties as Apple’s CEO, leading to Steve Jobs becoming the interim CEO.
Lest hindsight bias makes you think the barrage against Apple (APPL) ended on that date, Business Week piled on with the July 28th story, “Is Apple Mincemeat?” In that article, David B. Yoffie, a professor at Harvard business school and a director of Intel was quoted, ”Apple has lost the OS war, and there’s no point fighting it again and again.” The author also referenced a Harvard seminar pulling in 160 “industry bigwigs” who came to the voted conclusion that Apple should be “broken up and the software piece sold or spun off.”
On March 5th, 2015, it was announced that the $745 Billion market cap Apple would be joining the Dow Jones Industrial Average. This year has seen the Apple Watch, Apple Music, updated iMacs, a revamped Apple TV, updated iPads, iPad Pro, Stylus Pencil, iPhone 6s and 6s Plus, updated operating systems, and on January 27th, April 27th, and July 21th, Apple respectively released record first, second, and third quarter earnings.
The point? Twofold. Some of the greatest investing opportunities have accompanied the greatest pessimism. Are we on the cusp of seeing some dislocations in the market that will present opportunities where the Captain Obvious types deem your idea “mincemeat”? Secondly, when your April 2015 round of golf is accompanied by the same Captain Obvious going on ad nasuem about the Dow stock he just bought, maybe it’s time to pause.
Thanks for reading.
Heart Capital does not offer investment advice via this medium. Under no circumstance whatsoever do these postings, opinions, charts, or any other information represent a recommendation or personalized investment, tax, or financial planning advice.
Twitter: @HeartCapital
No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the view or opinions of any other person or entity.
