Apple’s Tim Cook Should Develop More Investor Patience

| Editorial

Apple's CEO Tim Cook is a precise speaker, a low-key kind of guy. Sometimes what he says has to be examined very carefully for content, what we call Cook Code. If not done, that can lead to missed clues by investors who desperately need more confidence in Apple's ability to deliver. I want to explore this Tim Cook paradox.

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I have written before, using a military analogy, that there are different kinds of captains of the ship. Some are boisterous, chummy with the crew and often greatly loved. Others are quiet, analytical and composed. There's no doubt they've been selected by their superiors as excellent leaders (and warriors), but not every member of the crew will have the same reaction to certain personality types.

Tim Cook is a low key person. That confuses some observers who equate physical energy with intelligence and leadership. (Think about Steve Ballmer's outrageous "Developers! Developers!")

So when Tim Cook speaks, it's very important to listen and learn from experience that he can be trusted. We must listen carefully and interpret the Cook Code.

Unfortunately, investors are in a big hurry for profits. It would be a lot easier if Tim Cook, instead of putting the company first and developing legendary products, would just amp up the volume, scream about how great Apple is, bow down to the analysts, betray Apple's long term strategy and spill some secrets so that investors could feel good about $AAPL. They want to hear that jingle of money in their pockets. See, for example, "How Apple CEO Tim Cook Infuriates Investors."

Mr. Cook's Words, Lost in the Noise

Back in December, Mr. Cook gave us a Christmas present wrapped in Cook Code. He announced to Apple employees, knowing that his forecast would be leaked: "We have a lot to look forward to in 2014, including some big plans that we think customers are going to love."

We can calibrate that statement. From various supply line leaks we think Apple is working on on an iWatch. Mr. Cook's own statements in an interview with NBC's Brian Williams has provided evidence of "intense interest" in television technology. We know these things are coming, but like kids on Christmas Eve, we jusy can't wait anymore.

Putting two and two together and stirring in some deferred gratification with wise attention to how long it takes to develop revolutionary products that customers love, it would seem that some investor patience is in order.

As usual, investors want their money, and they want it now. Can Tim Cook change his ways to satisfy them? First, we know that in pitched competition with Samsung, it's smart to keep your powder dry and your secrets under wrap. So spilling the beans only drives the stock down when the competition's copying engine heats up. Can he be more energetic and vocal in well timed and well placed interviews? Perhaps, but he's already done a lot of them, and it's hasn't had the desired effect. Can he provide hints in secret sessions with analysts who will then, with enthusiasm, set an aggressive buy rating? The Apple CEO has to be careful there, for the sake of appearance, because his pay is tied to AAPL stock.

In the end, I think it's just that people are hard of hearing. Sensationalism is the word these days, and a low-key professional has trouble making splashy headlines.

And yet.

Tipping the Balance?

I surmise that Mr. Cook, from time to time, does think about how fickle and impatient investors are. He may wish he could excite them and stir them to graceful patience. While tending to Apple, as a good steward, is really more important, I would urge that Mr. Cook think of new ways to instill and restore a certain special optimism in us all. Perhaps frequent, formal chats, with a favored interviewer rather than an obscure ABC discussion on a Friday night. Hope and enthusiasm automatically confer patience. This too is a responsibility of a CEO.

On the other hand, 2014 is the right time to deliver on the promise linked to above about new, lovable products. It'll be all hands on deck. Patience does run thin and money jingles.

It's a fine line for Mr. Cook to tread, balancing his calm cool demeanor and steady leadership against the urgent noise and desperate greed of the crowds. But we always do need something, on a frequent basis, to calm our nerves and build our patience.

Comments

Randell & Koko

Patience is fine. Obstinance in the Tech world will turn you into a Blackberry.

geoduck

As usual, investors want their money, and they want it now. Can Tim Cook change his ways to satisfy them?

Why should he?
Seriously, other than Apple’s stock price going up and down as the speculators panic from this or that rumor and make stupid trades, what is the impact? How is this harming Apple? How is this harming actual investors that bought Apple and are holding it for the long run? At some point if the speculators get screwed by their own short term, day trading, immaturity I see it as a self inflicted would. They get what they deserve. Who else is it harming?

John Molloy

John, both this and your Street article were excellent posts today!

The only problem I see with this article is that you assume that “investors” (i.e. Wall Street) have patience… They don’t. Wall Street is like a May Fly they go to where the action is. The “action” in Apple isn’t there save for shorting purposes. At the moment that helps both Apple the company with their buybacks and anyone who wants to short the stock.

Perhaps when Apple has finished buying back they will actually start to predict where they are going… Until then…

barryotoole

“While tending to Apple, as a good steward, is really more important, I would urge that Mr. Cook think of new ways to instill and restore a certain special optimism in us all.”

Hmm. Another pundit tell Apple what to do!

Lee Dronick

I feel that it is a two street, investors should develop Apple patience. Either that or invest elsewhere.

dtm1

No not all. Investors and Wall St need to have patience of Apple. And Cook should tell them to go to hell - or do as Jobs and ignore them and run Apple.

I think Cook blinked and gave the world the 5C iPhone and I knew it would be a dog in sales when announced. I hope Cook learned from his mistake/blink? Strange how all these experts telling Apple what to do just can’t start and build a profitable business - but they sure KNOW what other companies/CEO’s MUST do. And everyone hears these experts but not a clue of actual Apple earnings just turned in.

Cook has dealt himself tenuous job security by blinking to these people. Let’s hope it never happens again Cook. Run Apple Cook - not appease idiots

adamC

If the investors want more jingle in their pockets they should head over to Amazon and google. These are growth companies and Apple is not only that Apple keep selling more products and make huge amount of money.

And perhaps in that way they better serve Apple.

Paul Goodwin

IMHO, the last thing Apple should ever do is try to appease the short term investors. It’s a no win battle. No matter what Apple did, it wouldn’t be enough, and predicting their response would be a waste of time and energy. That bunch has proved themselves either totally incompetent as investors, or as shady manipulators. Apple’s focus should stay on product development, setting goals they can meet or exceed and executing on time. This recent 10% dip is noise on a long steady slope. 2012’s radical uptick and 2013’s crash merely brought it back closer to that slope. As soon as investors remember that Apple has 10% of the corporate cash, and that the P/E ratio is sound, they’ll buy in.

ibuck

In my view, AAPL speculators want Apple to be something it’s not, and become impatient and upset when reality sets in. Their blue-sky analysts are doing them a disservice, and then try to blame Tim Cook or Apple for squashing their get rich quick schemes. I often wonder if theses anal-ysts, or their companies, are the same ones shorting AAPL to help drive the price down, and start anew (lather, rinse, repeat). And if doing so is legal.

mrmwebmax

+

First, we know that in pitched competition with Samsung, it’s smart to keep your powder dry and your secrets under wrap. So spilling the beans only drives the stock down when the competition’s copying engine heats up.

That has got to be the record for metaphorical density at TMO!

John Martellaro

w00t!  I hold the record!  I’ll tell Bryan Chaffin.

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