Pedro de Noronha, managing partner at hedge fund Noster Capital, ain't got no truck with these newfangled tech companies, including Apple. The problem, he said, is that you don't know where they'll be in 5 to 10 years. Even Apple, according to him, could be "obsolete in two to three years."
Pedro de Noronha on CNBC
"I’m a value investor and I’m a medium-to-long-term investor," he said in an interview on CNBC (full video below the fold). "I need to know where a company is going to be in five to ten years."
He had more, though, saying, "Look at Apple, a company that we all admire. I love Apple. I don’t own its shares but I own a lot of their products. I don’t know where they are going to be in three years. It’s a very competitive landscape. They might become obsolete in two to three years as we've seen dozens and dozens of technology companies."
Sometimes there's a fine line between an Apple Death Knell and merely making yourself look foolish, but Mr. de Noronha is treading that line with gusto. He's not saying Apple will have become "obsolete," a choice of words I attribute to English being his second language. He's just saying, heck, you never know—it could happen.
He has a point. Any company—every company—could lose its way, either overnight or over the course of years. And if you squint your eyes just right and look at Apple's history, its track record, its philosophy, its unique whole widget business model, its recent hires, its acquisition strategy, its massive investment in its supply chain, the pattern of innovation revealed in its patent applications...
If you look at all of those things by printing them out on thousands of sheets of paper, stacking them up in neat piles, put those piles into a wind tunnel, and then turn on that wind tunnel, it's easy to see how Apple could become "obsolete" in 2-3 years.
Mr. de Noronha has a solid record at his hedge fund, but that doesn't mean that he groks the world of technology. Here's the full interview:
*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.