iPhonAsia issues our first Dean Wormer Award
And the winner for September is …. drum roll please …. Fast Money’s Jeff Macke!
Fast Money Panelist Jeff Macke
Lehman Brothers’ analyst Ben Reitzes was a guest on yesterday’s (9/05/08) edition of CNBC’s Fast Money. Sidebar: See post by iPhonAsia Editor (Jan 19, 2007) re Ben Reitzes.
Apple
Jeff Macke responded: “That’s great that you’ve (Ben) dug into it, but I don’t know who these people are” (Tim Cook and Apple’s bench).
Apple COO - Tim Cook
iPhonAsia Comment: Jeff Macke is held up to the Fast Money audience as a knowledgeable money-manager who in theory keeps current with companies he lauds or pans (stock buy or sell recommendations). Why does Jeff Macke win our Dean Wormer Award? Macke has been a frequent critic of Apple, Inc. (AAPL) and (only slight exaggeration) has been especially vocal over not being able to receive daily Apple, Inc. bulletins detailing “how Steve Jobs feels today.” Macke’s preoccupation with Steve Jobs’ health status is almost comical. Yet Jeff apparently has no clue as to the depth and quality of Apple’s executive management team (Steve Jobs, Tim Cook, Phil Shiller, Bertrand Serlet, Scott Forstall, Jonathan Ive, Ron Johnson, Peter Oppenheimer) and has no idea who Tim Cook is!!! Whaaa the??? For an Apple commentator/pundit to not know who Tim Cook is … is tantamount to an Olympic swim commentator not knowing who Michael Phelps is. Yet Macke wasn’t kidding … he’s that dim. And for his comments on yesterday’s Fast Money, Jeff Macke wins our first ever Dean Wormer Award. Honorable mention goes to Joe Nocera and Douglas A. McIntyre.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
For readers who don’t follow Apple, Inc. (AAPL) closely, Apple has a superb bench to support Steve Jobs. And Apple Chief Operating Officer (COO) Tim Cook is an extremely capable executive who could take the helm at Apple and not miss a beat. As an Apple shareholder, I’ve had the pleasure and responsibility of attending Apple, Inc. shareholder meetings and listening to every Apple (AAPL) quarterly earnings conference call. Tim Cook presides at these events and many others. I can tell you that I would be very comfortable with Tim Cook running Apple. He is a confident and capable executive who is very much on top of Apple’s business operations, product development path and and financials. This in no way is intended to dismiss the importance of Steve Jobs’ vision, drive and leadership at the helm of Apple, Inc., but rather to reinforce how deep Apple’s bench truly is.
More on Tim Cook via Fortune Apple 2.0 > HERE
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“Nothin is over until we say it is!”
“If you mention extortion again”
Great job, Dan.
The problem is that many so called pundits come on TV with their and their clients agenda. They want to re-recycle SJ’s health issue ahead of the event. Good thing is that the upcoming event is not too hyped.
Wow… you guys really don’t seem to like me.
Since your stirring defense of Apple’s bench, the stock is down 40% vs. an 11% decline in the S&P. Yesterday, a false report on Jobs’ health sent Apple sharply lower. I don’t know who started the report. I didn’t make money on the lie and I don’t know anyone who did. I do know that, by the end of the day, Apple closed lower than where it dropped when the rumors of Jobs heart attack were reported.
What I can tell you for sure are two things: 1) I hope Steve Jobs lives until he’s 100. 2) Until Apple proves the strength of their bench, Jobs’ health will be a material factor in the stock price.
I didn’t invent the fact that Jobs’ health matters to Apple’s stock. I had the courage to report on what is a trading fact. If you’re too “dim” to realize that fact, then you shouldn’t trade the stock.
I manage my own money and at no point in the last 12-months have I had a position in Apple stock.
I’ve written about this issue extensively at Minyanville.com ( http://www.minyanville.com/articles/AAPL-apple-BRK-A-health-steve/index/a/18152 ).
I don’t trust Apple’s board not to deceive me about Jobs health. I’m not complaining about that fact as I don’t actually have an investment in the company. I’m a telling you in my professional opinion that the board is doing both shareholders and the “talented bench” you defend a disservice. This isn’t a new phenomenon ( http://news.cnet.com/8301-13579_3-9886077-37.html ).
You suggest I’m fat, drunk, stupid, dim and ill-informed.
I discuss stocks on television. I’ve been a vocal critic of Apple’s stock for the last 40% down. You’re calling me names and defending the bench of a cult stock with an obviously ailing leader and a demonstrably disingenuous board.
So tell me, my slender, sober, smart, sharp and well-informed friend, who’s position seems more defensible here?
Yep …
http://idannyb.wordpress.com/2008/05/15/blogger-humor-2/
“Yep” and a dead link?
I stand corrected. Apple is a screaming buy, the tech market is ripping and Friday’s 9pt squeeze was the start of a rally back to $200+ for AAPL.
Don’t worry about the rotation into declining margin business lines. I’m an idiot. And you’re slender and wise.
The credit belongs to those in the arena, Danny.
Link fixed
http://idannyb.wordpress.com/2008/05/15/blogger-humor-2/
You want credit for what exactly Macke? Perpetuating the BS that Jobs was on his deathbed? That RIM was going to eat Apple’s lunch? When a stock is up for reasons you FM jokers can’t justify you beat it down with BS and then when you succeed you play “I told you so.”
Loser.
I’m not remotely saying “I told you so”.
I couldn’t be less interested in saying “I told you so” after the fact of stock breakdowns. It’s bad television and it’s obnoxious. What I’m record as saying for months is always, for want of a better term, on record. I’ve picked stock on television during the worst bear market in 100 years. You folks are bloggers.
Which, do you suppose, takes more balls, “htlr”?
You both confuse love of a company with love of a stock. I couldn’t give less of a crap about your confusion until you call me names. If you can’t handle responses to you calling me Flounder (actually only implying it, not sure if you weren’t smart enough to get the award right or just wanted to be Dean Wormer, Danny).
The link was better when it was dead. Now that I’ve seen it, I’m not sure what it means. I’m obsessed with defending myself against guys who proclaim themselves experts but can’t pick stocks? I’m a fat, drunk, idiot because I thought a stock was a sell 60% higher? I don’t understand the genius of the whole “Let’s pretend Steve is healthy” strategy?
I engaged this board as an experiment in speaking to “the angry” on a more personal basis. I’m a loser but I haven’t own apple stock as it dropped during the 2008 50% decline.
Whatever winning is, I’m not interested. Whatever it takes to impress either of you, I’m sure it involves blind faith in foolish and doomed enterprises. I’m not interested in defending Apple or dressing up for a Battlesar Gallactica convention.
Knock yourselves out, guys.
First of all Macke, don’t post to a blog when you’ve been drinking. Jeezus look at what you just wrote.
Secondly, you’ve addressed nothing concerning what I said to you. You continue to rely on aapl’s drop as proof of your “call.” My point is that your blathering (and the blathering of those like you) is what is causing the turmoil. AAPL’s fundamentals prove my point. The BS rumors that you and your kind slosh about prove yours. Congratulations.
Don’t dismiss the name calling. It’s for real. You’re a loser. If you really knew what the hell you were talking about you’d own your own island rather than acting like you know what you’re doing and collecting a small time check from CNBC. You sure as hell wouldn’t be conversing on a blog. Doing that just shows you’re in the same sad ass boat as the rest of us, except it’s guys like you that poked a hole it and then acted like you had nothing to do with it.
and one last thing Jeff…
Stop thinking about what takes more balls (which you are clearly preoccupied with) and start thinking about what is right. It doesn’t mean squat that you make a call on national TV and I don’t. What matters is whether you realize that you are the one with the responsibility. What you say matters, and you have a responsibility to know what the hell you are talking about. And when it comes to aapl, you don’t. So shut the hell up until you do. Otherwise, you are part of the manipulation/self fulfilling prophecy machine, plain and simple.
If you’d ever traded for a living, you’d understand the “manipulation/ self fulfilling prophecy machine” is a lie. Even if “we” were evil enough to bother to manipulate your stocks, we’d be too drunk or apathetic to do so.
I’m not passing judgment on your for saying what you think on a blog rather than TV. I’m writing on this blog, why would I diminish it? I’m trying to engage on some reasonable level of discourse with people who just seem to be asses by nature.
The ability to freely stereotype those who don’t share your economics or anonymity is more strident and inflexible than my coming on to the board to actually discuss what was said. If I told you to “shut up” it would be the tyranny of the strong and entitled to muzzle the unwashed, unknown masses. You telling me to shut up is sticking it to the Man or whatever the hell you beatnicks call such passive mutterings these days.
My mistake was assuming you folks were grading companies rather than… well… whatever the hell it is you think makes Apple great (”round corners on computers!!!!”).
I haven’t criticized Apple’s stock on TV lately. I don’t think it’s expensive at this point and there are better targets. If Apple rallies, and I talk it down (and, more importantly, if you think my opinion drives down the value AAPL) my advice to you is to buy the dip as my impact will, at most, be fleeting.
If you don’t think expressing what you believe is true when you know it will expose you to death threats and ad homonym attacks (like attacking Coal, Ags and Oil last summer) takes courage (or balls or ovaries or whatever PC term is current) then you need to get out more. I sleep quite soundly knowing I’ve helped people avoid bubbles much larger than Apple’s.
That’s why I collect the “small time check” from CNBC. Not to impress you or your friends.
Nice stopping by. You guys run a really accepting place, provided the visitors are losers who in no way defend themselves.
Soberly yours and out of here,
Macke
Jeff,
My post clearly called you out and you are welcome and more than entitled to come here to defend yourself and post your views.
Neither I nor anyone who has commented here, has suggested that they are “expert” stock traders. I suspect most who visit here are interested in iPhone, Apple, Asia and the telecom industry in China and Asia. And certainly some are also AAPL shareholders. Of those who come here with an interest in AAPL, I think you’d be surprised how many are long-term holders of Apple stock who have done very well over the years. Not necessarily looking to trade in and out. Certainly the current credit crisis and macroeconomic environment have hit AAPL and the majority of stocks in our markets. This has no doubt dampened spirits somewhat and raised sensitivities.
I for one took offense at your constant harping about Steve Jobs’ health status. I understand your point of view and I think we can agree to disagree on the Steve Jobs’ health and Apple Board topic. One additional point … Philip Elmer DeWitt wrote an excellent article on Steve Jobs’ condition, which I would recommend to all who are interested…
http://apple20.blogs.fortune.cnn.com/2008/06/13/steve-jobs-life-after-the-whipple/
And Steve himself discusses this subject quite movingly here… http://www.youtube.com/watch?v=D1R-jKKp3NA
Regarding several of your comments … Apple may have an avid following, but calling it a “cult stock” and “doomed enterprise” may be a bit over the top no? I’d say Apple/AAPL has more than demonstrated its value through market cap and return over the last 5 years.
And since you’ve called me an “ass” and a Battlestar Gallactia conventioneer … I’d say we are more than even in exchanged insults. Battlestar Gallactia? Jeez … Now that one really hurts.
We finally agree on on something. My Battlestar Gallactica comment was harsh and ill-informed. I haven’t actually watched the show since its first iteration in the late 70’s.
My bad.
LOL, peace out
[...] See also > Tim Cook and Apple Exec Mgmt [...]
As a belated observation, I’ve notice Tim Cook the very able formerly relatively obscure underling getting increased amount of ink… including here: http://cgi.ebay.com/FORTUNE-MAGAZINE-APPLE%2FSTEVE-JOBS,-OBAMA-NOV-24-08!_W0QQitemZ220317273714QQcmdZViewItemQQimsxZ20081124?IMSfp=TL081124133003r33582
Smart by Apple. My point was never “it’s Steve Jobs and thousands of idiots” the point (strictly from a trader perspective) was “Apple let itself become a cult of Steve. A company needs to demonstrate (to people beyond those who study the company hours a day) that they have a capable bench; as a BOD that’s your job”. Apple is now doing their job.
You’re all welcome.
Love,
Macke
Ps
You never came up with a 2nd winner for your mis-named contest. Can I claim back to back titles? I’m the Lance Armstrong of the Dean Wormer award, save for my own testicles. And the “Fat Drunk and Stupid is at least 1/3 wrong”.
Jeff,
Thanks for dropping in again. Really. And yes Tim Cook, Phil Shiller, Scott Forstall and Jonny Ive have all been getting more stage time at recent media/product events. That is likely a deliberate move to show the true bench strength of the company. And then there was Adam Lashinsky’s cover story in the Nov. issue of Fortune – The genius behind Steve. http://money.cnn.com/2008/11/09/technology/cook_apple.fortune/index.htm?postversion=2008111010
I think the “Cult of Steve” notion has really been a product of the media and ardent Apple fans. I believe that the majority of analysts have long appreciated the important role of Apple’s COO and CIO (Tim Cook and Peter Oppenheimer) and the rest of the executive management team.
I haven’t had time to come up with another “winner” for the next Dean Wormer award … Do you have someone in mind? Perhaps an ex Battlestar Gallactia conventioneer?
(Jeff Macke’s comment was inadvertently deleted and now added back)
By: Macke on December 21, 2008
at 10:16 pm
Dan,
Now that seemingly everyone is on board in criticizing the Apple board and harping on Steve’s health I’m looking for a long position should real panic set in.
With Apple floating around 90, the Steve health thing out in the open and scores of voices freely taking the “Steve is stick position” I want to be on the other side.
Truly, there has never been a view I less wanted to express. I’ve never shorted Apple but, from a stock picking perspective, I simply felt a need to share what I saw. FWIW, I think Apple has done a decent job of planting “depth” stories over the last few months. I don’t think Steve is well but that’s getting worked into the stock at $90 in a way that wasn’t in the cards at $150.
Strictly on multiples and fundamentals, I’d be looking to get long Apple on a break below 80. Whether you’ve noticed or not, I refuse to say anything about Steve’s health of late. “I told you so” is horrendous under any circumstance… when actual health is involved, it’s simply not something I’ll bit on.
As for the Dean Wormer award, I have no suggestions. I don’t know anyone who actually admits to the Battlestar thing and it’s not my award to toss at folks.
What I can say is that it’s 10 days until the year I turn 40 and I saw Animal House on cable the other day. The shroud of grim I felt when I realized the movie is over 30 was more punishing than the stuff I read about me on the web (no offense).
It’s a shame we gotta get old, Stallion. But trading pays better than melancholy.
Hey, Dan, what do you make of the WalMart news?
Apple and WalMart both have well earned reputations as being merciless at the negotiating table. At the announced price points, how much of a hit is Apple taking per unit?
Any thoughts?
WalMart plans to sell the black 8-gigabyte iPhone 3G model for $197 and the 16-gigabyte model at $297. Only a minimal discount ($2 less) versus Apple Store price. The WalMart discount will have virtually no impact on Apple’s margins. The iPhone will continue to be subsidized by AT&T and will drop healthy amount of revenue to Apple’s bottom line.
I suspect even the most frugal shoppers will choose the closest store (Apple or WalMart) verses make a longer drive to save $2 bucks.
There have been unsubstantiated rumors that the old (discontinued) 4 gig iPhone will re-appear at WalMart for $99. Doubtful IMO.
The 8 gig and 16 gig iPhones have arrived @ 2,500 WalMart and will be available on Sunday, Dec. 28
The big new out of this is simply the expansion of distribution points. 200 Apple stores versus 2,500 WalMart locations.
Gene Munster has estimated that Apple could easily sell as many iPhones through Wal-Mart stores in 2009 as it sells through its own Apple Stores — about 4.5 million units, by his calculation, or more than 1,200 iPhones per store.
More on margins (dated but still relevant) >
http://idannyb.wordpress.com/2008/01/31/apple-iphone-market-share-vs-margins/
I’ll ask a few readers to offer up their guesses on iPhone 3G billable cost of goods + AT&T carrier subsidy. This will show current margins … which are healthy and give Apple room to adjust if/when necessary.
iSuppli Teardown of iPhone 3G – July 16, 2008:
“The bean-counting experts over at iSuppli are at it again with the iPhone 3G, finding that the whole kit and kaboodle tallies up to just $174.33 (give or take) for the 8GB model in material and manufacturing costs. That works out to about $53 less than iSuppli’s estimate for the original 8GB model back in June of last year, an amount saved in part by moving to a single 10-layer circuit board (versus a pair of 6-layer boards). The firm figures Apple’s shelling out about $50 in royalties for each iPhone 3G that rolls off the assembly line, leading to a grand total of $224.33 in costs. Offset that with a healthy AT&T subsidy, and all told, we’re looking at something like a 55 percent margin to help Steve finance his next round of black turtlenecks.”
Source: http://www.engadgetmobile.com/2008/07/16/isuppli-sez-iphone-3g-is-running-apple-53-less-than-original/
Regarding iPhone margins …FWIW here are my “back of the napkin” calculations using iSuppli numbers for cost of goods (COG) …
iPhone 3G 8 gig model COG tallies up $174.33 (give or take) + about $50 in royalties = $224.33 in costs.
iPhone 3G 16 gig model COG is about $20 more than the 8 gig model or $244.33
Apple is selling the iPhone to carriers for about $500 to $550. The retail price is $199 or $299 (knock off a couple of bucks if sold through BB or WalMart).
That makes for healthy margins…
8 gig iPhone
Revenue = $499 ($199 + $300 carrier subsidy)
COG = $224.33 (materials + royalties)
Gross = $274.67
$275/$499 = 55% margin
16 gig iPhone
Revenue = $599 ($299 + $300 carrier subsidy)
COG = $244.33 (materials + royalties)
Gross = $354.67
$355/$599 = 59% margin
Good margins.
As for the stock, and this has nothing to do with health speculation, I think Apple needs to control their PR better. Clintonian language doesn’t ease investor minds in this new age of cynicism. “Nothing has changed” isn’t exactly the same as “Steve is fine”.
When I got my coveted 2008 Wormer, it was for harping on the health issue 6 months and 50% ago. With the stock in the mid80’s and everyone on the story, it’s time to assume health concerns are in the stock. Now Apple trades off the demonstrated abilities of the next generation.
Whatever the status of Mr. Jobs health (and I honestly hope he’s great), it’s time for Apple to start communicating with the street at a level more in tune with the new generation of investors. “Steve is fine, our margins on project XXX are super. We love the terms we have with AT&T. We think the next quarter could come in as high as 60% of the Street’s estimates” etc.
That stuff just doesn’t play as well when everyone who “assumed” the best about the black boxes of every financial company on earth have imploded and the American consumer is going cold.
I am still inclined to buy any negative news out of Apple. What I can’t buy are Kremlin-esque quasi-denials of health reports. The rumors go away only two ways: 1) Own up to them and tell investors in your PUBLIC company what’s next 2) Prove the rumors wrong.
Once either of those happens, I can assess the fundamentals of the company without the emotional overhang.
Like me or hate me, if you want professional investors with stable hands to get long the stock, you should be rooting for Apple to deal with this issue head-on.
[...] Apple COO Tim Cook will fulfill Apple’s CEO role while Steve Jobs takes a temporary medical leave of absence. See Steve Jobs’ letter > HERE. For more background on Tim Cook read iPhonAsia posts > HERE and HERE [...]