Is Apple in Its Sammy Hagar Era?
A sobering look at the obstacles Apple shares face.
Chazz: Who's side did you take: Halen or Roth?
Chris Moore: ...Van Halen
Ian: HE'S A COP!
-- From the classic film, Airheads
On Saturday, I began reading the autobiography of a great man.
A man who grew up fighting anti-Semitism on the streets of Bloomington, Indiana.
A man who braved sub-zero temperatures, scaling 20,000-foot mountains.
A man who touched millions around the world, from Hollywood to Haiti.
This man, as you may have guessed, was David Lee Roth, original frontman of Van Halen and author of the memoir Crazy From the Heat:
See, when I was a kid growing up in ancient times (the 1980s), getting cable TV was a big deal. Service wasn't available everywhere, and the expense wasn't easy for my working-class parents to justify.
But when we finally got cable around 1987, I became absolutely mesmerized by MTV (NASDAQ:VIA).
Now you have to remember, this was way before The Real World kicked off American reality TV; MTV mostly showed music videos in those days. I was nuts about them. Whenever I was bored, I was glued to the TV watching Guns & Roses, U2, Madonna, ZZ Top, INXS, Motley Crüe, Run-DMC, Billy Idol, and countless others.
One of my favorite groups of course, was Van Halen.
Too bad there was no Internet in those days -- I didn't even know that the wild and wacky David Lee Roth had left the band years earlier! My only regularly accessible information source was a set of Funk & Wagnalls encyclopedias that my mother bought from a door-to-door salesman during the Carter administration.
Roth-era Van Halen was all about sex, partying, alcohol, and more sex. I knew all of Diamond Dave's lyrics by heart. I didn't know what he was talking about, but to my innocent ears, he sure sounded cool!
So I just about vomited the first time I heard the sappy Why Can't This Be Love, which was sung by this other guy named Sammy Hagar, who did not own one pair of bitchin' leopard-print spandex pants, and who was very unlikely to offend my parents.
After the departure of Diamond Dave, Van Halen became more commercially successful, but the edginess, the absurdist humor, and the excitement was gone.
Is that what's going on with Apple (NASDAQ:AAPL)?
Did the party end with Steve Jobs' official resignation from the CEO position on August 24, 2011?
Now, we have to remember that since Jobs stepped down, the company's made more money than ever, and the stock rose 87% before peaking intraday at $705.07 on September 21, 2012. Even today at $488, the stock's still up 30%, which is a little better than an S&P 500 (INDEXSP:.INX) that's up 25% and a Nasdaq (INDEXNASDAQ:.IXIC) that's risen 26%.
We all need to admit that, for all his strengths as a manager, Tim Cook does not deliver the sizzle the way Steve Jobs did.
Just like how Sammy delivered a lot of money but not much excitement... .
Steve Jobs was wildly passionate and mercurial, sometimes irrational, and always willing to do whatever he wanted. Basically, he behaved like a narcissitic rock star instead of a CEO, and people loved him for it.
Even the people who hated him were still interested in whatever he was up to, whether it was declaring thermonuclear war on Google (NASDAQ:GOOG) or making fun of Microsoft (NASDAQ:MSFT).
And now we have a guy who gets the job done, but isn't quite as skilled at generating good old-fashioned excitement.
Think about the landscape. I can't remember the last time I read a remotely original thought about Apple, on the bull side or the bear side.
Everyone knows about the dominant app ecosystem and the design prowess and the P/E ratio and the cash and the Chinese market and the educational opportunities and the blah blah blah.
And if, as wise folks say, “what the market knows is not worth knowing,” then why don’t we just admit that 99.999% of Apple research and analysis is basically worthless. Even the news isn’t really necessarily news, especially when it comes to supply-chain rumors that are extraordinarily difficult to verify.
Hell, if you offered me a choice between a turkey sandwich and the latest Apple research from all the 63 analysts covering the stock, I’d say, “Extra mayo, please!”
It’s not that people covering Apple are doing bad work. It’s just that the flow of information is so fast that no intellectual edge can be maintained.
So what am I saying here?
Well, it’s very simple, and it’s probably unoriginal, but I’ll toss it out anyway.
Come January 23, Apple had better put up some dynamite numbers because marginal buyers of the stock are hard to come by.
Forget the P/E and EV/EBIDTA ratios and whatever else you’ve got. We’re dealing with a stock with a $460 billion market cap. This ain't no Miami Vice-style speedboat; we’re talking the biggest aircraft carrier in the fleet.
Wanna make a turn?
It’s gonna take some effort.
Steve Jobs and his charisma are gone from this world, and they’re not coming back. Tim Cook seems like a good CEO, but he’s not the type of guy that gives me faith that Apple’s domination of consumer technology will be all-encompassing and never-ending -- you know, the type of stuff long-term faith and multiple expansion are built on.
So the numbers have to do the pulling.
Incidentally, are articles like this more likely to appear at a top or a bottom?
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