Bad religion: The easy explanation for Apple success


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It’s 2017 but there’s still one simple explanation that pundits can fall back on to explain anything that goes Apple’s way.

Writing for The Street, Neil George gives us the four-one-one from one-nine-nine-five.

“Apple vs. Amazon: Why Investors Have Got It Totally Wrong.” (Tip o’ the antlers to Philip Speicher.)

Right now, there's a conundrum in the stock market.

Ugh, what are we going to do with all this money? Burn some of it? Seems like maybe we should just burn some of it.

No, the real problem is that investors seem to like Goofus Apple more than Gallant Amazon! Unacceptable!

Both Apple and Amazon released quarterly reports last week. According to Apple's results, the company is faced with a dwindling market share…

Nobody cares about market share. Apple and Samsung are the only ones making any money in the smartphone market and Apple makes multiples more than Samsung.

Nobody. Cares. About. Market. Share.

The Macalope has “Nobody cares about” tattooed across one bicep and “market share” across the other.

…and shrinking margins.

Apple’s gross margins have been in the 35 to 40 percent range for about three years now. Yes, they’re down a bit from last year but they’re up from the previous two quarters. 2017 could prove tight, but some of that’s due to currency exchange rates.

This should send up a red flag for investors, warning them to get out fast.

If you look at just these two things, one of which doesn’t matter, it looks like the sky is falling! As another example of the same effect, watch what happens when I Sharpie out a word from this headline about bears!

Grizzly Bears Feed On Fresh Salmon, Scientists Say

Grizzly Bears Feed On Fresh Salmon, Scientists █ █ █


But instead, investors are falling over themselves to grab more shares, sending shares of the Cupertino, Calif.-based company higher.

Surely there’s a very good and scientific reason for it.

Clearly, something is wrong here.

Oh, yes. Can’t wait to hear what it is.

My guess is that it has to do with the "church of Apple."

[The Macalope turns to the camera, stares into it so hard the lens shatters]

Are you sure it wasn’t leprechauns? That’s about as plausible an answer as the one you gave.

Dude, the Macalope has a head shaped like a classic Mac and he owns no shares of Apple. Seems like if your theory is remotely true, he would have like a million shares.

But if he had a million shares of Apple, he wouldn’t be sitting here typing up a reply to your lazy Apple tropes. So, no, none of this holds any water.

Apple's fans and investors are like a cult, so enamored with the company that they don't read behind the lines in the company's earnings report.

Turns out there was an extra week in last quarter and you Apple fanbois and fangurls and fangenderunassigneds didn’t bother to notice that in your wild rush to buy up shares, which no one knows how you can afford because Apple products cost so much.

Of course, as the Macalope explained on Tuesday, when you take into account the fact that the company reduced channel inventory, iPhone sales did rise on even a weekly basis year-over-year. But you should only take into account just enough things so that you can blame a rise in Apple’s share price on dumb Apple cultists.

Apple's got other troubles, as well.

For example, troubles I already mentioned like…

The gross margin…

Did I mention the gross margin? So gross.

Perhaps Apple would do well by not picking fights with -- or even suing -- its suppliers, including Samsung Electronics, Qualcomm and Foxconn Technology.

Apple’s suit against Qualcomm is exactly about margins. Qualcomm has a stranglehold on the market for the kind of smartphone chips it makes, one that nets them margins of 61 percent. Apple would be crazy not to try to negotiate for a better deal.

On the other hand, we have Amazon…

Which has a P/E ration of 187 compared to Apple’s ratio of 16. Yet, somehow, when Apple's share price goes up a bit the only explanation can be the zombie acolytes of the Church of Apple.

It’s bad enough when you use the Apple is a religion trope to explain away sales of iPhones and Macs. But when you do it to explain away sales of shares of Apple, you’re really the one who’s practicing a faith-based belief system.

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