The Back Page - Fool vs. Fool: Apple is Rotten and Macs Suck, So There!
by - October 7th, 2004
I always enjoy The Motley Fool's Fool vs. Fool debates over a stock, especially when it's Apple they're talking about. The Motley Fool's stable of writers usually make a good argument on whatever topic they are writing, and when it comes to Apple, it's not hard to get strong opinions no matter what you think of the company. Such is the case today with a new debate on the maker of our favorite computing platform.
On the pro side of the argument, we find a cogent piece titled "In Defense of the iEmpire," written by Tim Beyers. Mr. Beyers makes the argument that Apple is a good buy at US$40 a share, with a P/E of 73, because the company is a "Rule Breaker." Rule Breakers are companies loosely defined as ones that defy conventional investment wisdom.
He lists as examples of rule breaking the fact that AAPL has continued to rise despite having a P/E higher than conventional wisdom for the last two years; that Apple can make money charging a premium in a commodity market because of the strength of the brand; that iTunes will make money for Apple; and that Apple's retail success is proof the company can sell Macs in a retail environment.
A quote from Mr. Beyers' piece on another rule breaking reason that Apple is a solid buy:
Windows is just as good as the Mac; there's no reason to get one anymore.
Sorry, wrong again. But this time I need only five words to prove it: no Mac OS X viruses. (Even the virus that hit my PowerBook was never able to execute. The damage created by deleting my e-mail in-box wasn't due to the bug but instead to an overzealous cleaning job performed by Symantec's.
There's a lot more in the full article, which I recommend as a good read.
I also recommend the con article -- "Apple is Rotten," which was penned by Seth Jayson -- but for different reasons. It's an entertaining, yet vitriolic rant that relies on half-truths, untruths, and really bizarre logic to slam Macs, Mac users, the iPod, and everything else about Apple. Mr. Jayson attempts to couch his contention that Apple's stock is "ready for a mighty big fall" in investment tradition, but really it's just one big attack on everything about Apple. He dresses it up in attempts to be extra snide, cynical, biting, and witty, but that just came off to me as somewhat pedantic and artificial devices.
How could that not be entertaining?
For instance:
Think different, like me!
"Think different?" I've always found this key slogan in Apple's marketing to be troubling, and not just because it shows that CEO Steve Jobs needs to brush up on his fifth-grade grammar. (Hey Stev-o, buy yourself an adverb!) It's creepy and ironic because Mac fans -- especially the ones who write me -- are about as freethinking as the lovely ladies of Stepford. They're like a pack of Moonies telling a congregation of Snakehandlers, "You're brainwashed. Join us to free your mind."Americans have always preferred their rebellion in commercialized and socially acceptable packages -- witness GM's Hummer H2, Harley Davidson motorcycles, or the Mullet -- but wake up, people! Leaving a $300 billion monopoly to support a $15 billion one does not constitute intellectual daring.
In fact, it simply means you've got less consumer freedom, not more. Think I'm making this up? Ha! Count the PC vs. Mac software packages at your neighborhood Best Buy. Try using your iPod with competing software. Try using any non-Apple MP3 player with iTunes. This is more than a question of tech theology: Mac's legendary insularity has always been a huge anchor on growth.
Dude, take a valium. Maybe Prozac. At least get some therapy, because it's OK. You don't have to be a Mac user, and you don't have to be part of the iPod crowd. It's OK, do what you want.
Buried in that verbal sewage are a couple of legit points. Mac zealots can be annoying, and you won't find much Mac software at Best Buy. Wait, you won't find any Mac software at Best Buy because they don't carry Macs or Mac software. That's like saying that it's obvious that sports documentaries are in decline because you can't find any at XXX SUPAR PR0N SHOPPE!!!!11!
It's just not relevant.
The underlying message of that passage, though, is an attack on those who make an argument not to be a Windows lemming. That's extra funny because his wording makes it clear that he feels he is missing out. I find that very amusing.
Something else I find amusing is his assertion that a Wal-Mart computer was better suited at heavy duty publishing duties. From the article:
Every year I get to play with brand new Mac gear -- direct from Apple -- as the "tech guy" at a well-known photojournalism workshop. This year, as usual, I wasted entire days trying to coax the new Mac OS to make nice with a variety of printers. Plug and play? Try plug and pray. Color fidelity, WYSWYG? Not with top-of-the-line Power Macs and cinema displays, I guess. This year, incredibly, I ended up relying on a no-name Windows laptop purchased at Wal-Mart's Sam's Club to do the heavy lifting.
OK, take less of the valium, because that's just whacked. Windows better at color management? Windows being better at plug and play? In other news, black is white, the world is flat, and life began on in the asteroid belt.
In the full article, Mr. Jayson makes a better go at saying that Apple is overvalued, and he may well be right from a technical standpoint. Apple's P/E is sky high, and the company's huge cash reserves no longer support most of that P/E like they did when people like Mr. Jayson first started attacking the company's valuation. That's usually a recipe for a fall in the stock price, especially if anything close to bad news comes out.
It's just hard to see the nuts and bolts financial analysis through the attack on Apple's fan base, and all the other bizarre stuff he throws in with it. So instead, I chuckle in wry amusement.
One last thing: A few people wrote in to suggest that this was an Apple Death Knell. Mr. Jayson's pronouncement of doom strictly concern Apple's stock, and not the company itself or the Mac platform, making it not relevant to the Apple Death Knell Counter.
began using Apple computers in 1983 in a high school BASIC programming class. He started using Macs in 1990 when the Kinko's guy taught him how to use Aldus PageMaker, finally buying a Power Computing Power 100 in 1995. Today, Bryan is the Editor of The Mac Observer, and has contributed to the print versions of MacAddict and MacFormat (UK).
You can send your comments directly to him, or you can also post your comments below.
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Observer Comments
The amazing thing about this is how freaking often the grammar gets criticized. Often without even stooping to the analysis 'What meaning of these words would make this grammatically correct?' Even ignoring poetic license to do anything you damn well please. (Which, being Apple, is the freaking point anyway)
Think Differently.
An imperative command to change one's thinking.
You're to modify your thinking - as directed by the adverb.
Think Different.
An imperative command to think "Gosh, that's _different_".
The statement is we are the _embodiment_ of different.
The command 'Think Red' would bring to mind things that embody 'redness'. Say apples, fire engines etc. Think high, think low, think beige-box. Ok, please _don't_ think beige-box. IOW: Think different.
Seth Jayson felt sufficiently moved to criticise Steve Jobs for his poor fifth grade grammar.
It's a shame that Jayson made similar errors when using expressions such as "especially the ones who write me" and " I wasted entire days trying to coax the new Mac OS to make nice with a variety of printers."
Clearly he's no better qualified to talk of grammar than of Macs.
Alan Audio
Thu Oct 07, 2004 10:13 pm Subject: The truth about publishing, color fidelity, and Mac vs. PC
+
I know nothing about stocks. I admit that. But as a communications professional with 16 years experience, I know more than my share about the professional creative print industry.
And I can say, with no threat of contradiction, that Seth Jayson has gotten into Rob Enderle's stash if he honestly believes that bargain-basement PCs are better than Macs with anything to do regarding print.
As the Corporate and Marketing Communications Manager for my employer, my job is on the line if I pick the wrong hardware, software, or third-party vendor for anything...let alone our yearly Annual Report. My trusty 933 MHz G4 and 17" Apple LCD are so well-calibrated that hard-copy proofs are a thing of the past. This year's Annual Report, like last year's, was PDF proofed only. Try that on a PC? I wouldn't if my job depended on it.
While Rohrich Corp of Akron prints our (II-VI Incorporated) Annual, Copy Craft of Texas handles most all of our other offset CMYK printing needs. And CopyCraft's HUGE...going through 80# offset paper by the semi-truck load on a daily bases. Let's take a look at what computers they prefer:
http://www.copycraft.com/equipment.html
Hmnn...90 Macs to 15 PCs. Perhaps this should tell Mr. Jayson something?
If that's not enough, I'll tell him something right now: Mr. Jayson, I have no idea what "photojournalism workshop" you're a part of, so perhaps you can tell me: What workshop? What software are you running? Photoshop? Quark? InDesign? Now, about those printers...are these professional offset printers, a la CopyCraft? Or desktop lasers and inkjets? In the case of the pro offset printers, who do you use? What equipment do they run? (FWIW, both CopyCraft and Rohrich are 300 line screen -- not DPI; you do know the difference, I assume? -- waterless presses with NO forgiveness for sloppy files.) In the case of desktop printers, are we talking great inkjets from Epson? Color lasers from HP? Ricoh Aficio multifunction machines? Specifics, Mr. Jayson!
I network to all such printers every day. In addition, I have two 75 gig IBM hard drives in my tower, a LaCie 200 gig external hard drive, and a 12 gig VST hard drive all running smoothly. At home, my 800 MHz G4 tower plugs and plays with the VST drive for work-to-home file transport, while an AsanteTalk enables me to use my beloved legacy HP 5MP laser printer via an Ethernet-to-LocalTalk bridge. An Epson inkjet plugs and plaus effortlessly via USB, as does my Kensington Pro mouse. (Drivers? Never had to install any.)
Oh well, perhaps this is all signs that I am merely a brainwashed Apple cultist. But all I know is this: If I don't deliver, I don't have a job. If my color is inaccurate, I don't have a job. How nice it must be for you to have so much inaccuracy in an article, and still have a job.
Wanna talk about corporate loyalty? Back when I was in Seattle, I was part of Microsoft's XBOX game testing program. As I walked to the testing room, I walked through their development offices, particularly ones concerned with graphics devolpment, charachter, and level design. Their platform of choice? PowerMacs.
Fri Oct 08, 2004 1:51 am Subject: Truth vs Visibility
Keep in mind that some commentators like Mr Jayson write controversial articles such as this not because they truly believe what they are writing, but to maintain their visibility. If one is not controversial, one is not visible; not visible is not necessary and will soon be looking for real work.
Fri Oct 08, 2004 10:26 am Subject: The printer thing is true
Not nearly as many drivers for the miriad of PCL printers. I have a Dually G4 and was giving a HPLJ 5M (not MP) and I couldn't get the mac to print to it. Prints fine from my wintel laptop and is a great secondary printer at our company ( we are a very small shop - lots of 'donate hardware' Since I couldn't use it at home with my mac, I use it at the office with my wintel laptop.
I don't agree with Mr. Jayson's attack on Apple, but I feel the Apple's stock price (and not the company itself), is set up for a fall. One bit of bad news--say, missing earnings per share expectations by 3 cents or more--and the stock price will fall 20% or more.
When a stock has a high P/E, as Apple does now, it's because the market expects everything to come up roses; they expect nothing but good news. A single bit of bad news and a stock with a high P/E can come crashing down very quickly.
Don't believe me? Look what happened to Apple's stock after they announced disappointing earnings on September 28, 2000 after the market close. The stock closed at 53.50 (adjusted for splits) that day; the next day, it closed at 25.75, losing more than half its value in a single day.
http://finance.yahoo.com/q/hp?s=AAPL&a=08&b=20&c=2000&d=08&e=30&f=2000&g=d
I'm a big Apple fan, and a former stockholder (who is maybe bitter for having sold at just under $20, though I still made a profie). I believe Apple is a strong company, but do believe the stock is currently overvalued for the short term. 5 years from now, Apple may have gained enough market share to justify the current, or even higher, stock price. But mark my words: IF Apple's earnings disappoint for a single quarter, expect to see a very large drop (20% or more).
Short term, I would not buy the stock at this price. Long term, I'd wait for a large price drop as a buying opportunity, and expect to see sizable gains over a 5 year course.
Of course, I'm no stock advisor, and how seriously can you take a guy who sold AAPL at under $20? ![]()
Fri Oct 08, 2004 11:22 am Subject: Unfortunately UpQuark
is he never specifies his problems. if you tried plug and play with printers older than 3 years, yes, you'd have trouble in os x, because at the time the most support was for nine. crapola pcs were *also* supported at the time.
and your statement that "printer thing is true" is so general, i wonder what you *really* use. in terms of using anything from this year or last, whether in jaguar or panther, there have been no issues.
i, as a freelancer, have to often hook up to printers i'm not in control of, purchased, or set up. and yet time after time, not only do i connect to the client's network without a hitch, but i have always been able to not only find the printer they wanted me to use, but all others on the network.
common response? "huh.. you found THAT printer too?"
yeah. plug and pray my asssssssss.
Fri Oct 08, 2004 12:28 pm Subject: A bit of emotion
I think that the stock is riding a wave of emotion from what is going on in Apple's market. Look at the overall news on Apple:
G5 iMac, getting strong reviews, cheaper than comparable Dells & Gateways and selling very well.
New generation iPods and the iPod mini supply problem is just about over.
Some universities report that iBooks took 60% of notebook sales.
New super computers using Apple G5 servers blowing out the price-performance standards normally associated with speed in this area. Also cheaper on power by a huge margin.
The Music Store moving past 100 million songs and growing.
Internet security reaching a crisis level and Macs are safe while MS flounders, seemingly lost and impotent. Wanna be safe? Get a Mac.
Tiger on course to deliver features in a few months that MS is stripping out of their next OX that comes out years from now.
All the news is on Apple's side right now - hell, even IBM is delivering G5 chips. It's not abnormal that people are reacting to this real world situation by purchasing Apple stock.
Fri Oct 08, 2004 1:46 pm Subject: re: a bit of emotion
Sat Oct 09, 2004 10:28 am Subject: mrmgraphics: FYI
Seth Jayson is a print coordinator for the Missouri Photo Workshop.
He probably has a chip on his shoulder because the Platypus Workshop run by Dirck Halstead is more highly regarded in the profession.
-Dan
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