Apple’s Cash: What should it do, part two?
page 66 of present 10-k
apple has about 20% (4.9/24.5b) in foreign securities. I don’t know as much as these guys, but if I had that much cash, I’d keep more of it in other currencies. I see some real inflationary threats ahead.
The more I learn the higher I go,
The higher I go the more I see;
The more I see the less I know,
The less I know the more I’m free.
I would like to say something about how unfair the market often is, not that anyone here doesn’t know this already. Years ago, when I was a tennis teacher, I taught at the home of a guy who ran one of the world’s biggest funds. At that time, he spoke to Jack Welch, CEO then of GE, every week. Every week! Now, think about this in context of the Steve rumors: there’s a decent chance that some of the bigger funds in the stock know very well what his condition is, a better than decent chance given what we saw today, which suggests that the selling was mostly constant tax selling when many potential buyers had already closed up for the year.
We’ve often discussed the madness of Apple’s current valuations, especially considering its solid fundamentals, continuing growth, quality products, and of course its cash hoard of nearly $25 billion. When speculators, bears, and haters suggest AAPL could fall to $50, we exclaim that its cash alone equals $27 per share.
Well, I just read a Motley Fool story that observes: ‘Think of how preposterous it would have seemed to buy Apple at that point , even though its share price (around $8) was close to the value of the company’s cash holdings (around $6 a share).’
Of course, back in 2002, tech had recently blown up in spectacular fashion, and few realised Apple’s potential for massive growth. The iPod had only been unveiled the previous year into what many presumed was already a commodity mp3 player market, and Mac OS X was just getting going (10.1-10.2) whilst XP was ascendant. Today Apple is a market leader in many respects, and sales are holding up well despite the disastrous economy.
But if the Motley Fool’s history is correct, seeing AAPL at $60 or less in 2009 seems a little less preposterous.
Ah, love, let us be true to one another! for the world… hath really neither joy, nor love, nor light, nor certitude, nor peace, nor help for pain