A few weeks ago, after hedge fund manager Doug Kass told us all about the imminent doom headed to our favorite fruit-themed company (including a kick at Apple’s customer base), the Macalope wondered how being mouth-breathingly wrong about Apple made a great advertisement for your investment business.
Philip Elmer-Dewitt has the answer:
If he was correct in mid October, it would follow that he was even more correct this week, when Apple—which was trading for $674 a share when Kass started his campaign—traded for as low as $533.74.
But no. Having helped knock more than $130 billion off Apple’s market valuation, Kass on Friday cheerfully announced that he is buying Apple again.
Ahhh, so that’s the pitch! “First I’ll help downplay Apple, then when the share price is low I’ll buy!” Well, that does make more sense. Nicely played, Doucheolo Machiavelli!
“Hey, I never said it was a forbidden fruit,” he told the Wall Street Journal.
Hey, I never said I wasn’t lying through my teeth!
Then he preceded to tick off five reasons he’s turned bullish on the stock.
All of which can be boiled down to “I’m pretty sure myself and others can’t talk it down any more than we already have. And I know it’s going to go up, so … cha-ching!”
It’s sleazy work if you can get it!
It is, of course, hard to gauge just how much Kass’s
manipulation “analysis” might have affected Apple’s stock. But it is a rather huge coincidence that he thought Apple was dead a few weeks ago, after playing with an iPhone 5 for “about a minute,” and now thinks that there’s still life in it.
Here’s the thing: None of his five reasons for buying Apple now address the fundamental concerns he raised in October. Steve Jobs is still dead, Apple’s products are still more expensive than the competition, etc. etc.
Owning stocks is all about growth. You don’t buy a stock just because it went down and is now relatively cheap. If it’s not going up, it’s not going to do you any good unless your only other option with it is to spend it developing another Ghost Rider sequel. And the Macalope suspects a guy like Kass has other options.
Years ago the Macalope bought a very small amount of Apple at about $20 (since sold). Years later he did, of course, wish he’d bought a ton. Sadly, he doesn’t have the facilities of guys like Kass to actually make that happen in retrospect, to just make the stock go back down to a price he’d want to buy some at.
Or the moral ambiguity.
[Editors’ Note: In addition to being a mythical beast, the Macalope is not an employee of Macworld. As a result, the Macalope is always free to criticize any media organization. Even ours.]