Submitted by Bill Blain of Mint Partners
“There’s no time to cry, happy, happy. Put it in your heart where tomorrow shines..“
Can’t not talk about Apple this morning. Y’day’s numbers cap a superb run of earnings from the Tech/Data giants – just as we were beginning to hate them!
Why did we ever doubt? We are not worthy of their infinite love… (Well, we got Tesla coming up..)
Does Apple’s record $100 billion bribe stock-buyback mean we’re all good with the Bright Shiny Things that Make it All Better? Mac want us to focus on non-smartphone earnings from I-tunes subscriptions, apps, cloud and other tech. I do love my Home-pod, but my Apple Watch was a terrible disappointment even before the face fell off and they refused to fix it. As for cordless headphones – er, you buy better ones for a quarter the price, although I accept they ain’t Apple White.
My key issue remains: show me what’s in the magic cupboard, show me the next thing I never imagined could exist. Er? It’s empty? I can’t help but think smartphones are just commodities and Apple just aint as exciting in terms of the long term opportunities as other disruptives. I’m wondering what’s happened to the creative energy that spawned the tech revolution, the big data society and the internet insurrection of the high street? Did it get buried in “same as”, “same as”, and expectations West Coast PVE will buy anything?
Facebook launching a dating app? Please, no one under 30 knows what FB is. I was reading a great article in the FT yesterday about the BIG DATA competition between the US and China. There is a picture that sums up it all: a Chinese Policewoman on the beat wearing a pair of smartglasses with built in facial recognition. We all know China’s concern with civil liberties is more casual than the West’s, but that’s one future, and it’s not dependent on launching BNST Smartphone XI next year… just saying, y’know..
Meanwhile the old world continues to wither and die. One of the iconic guitar makers, Gibson (how I wish I had the dosh to have bought one when I was young: it would have opened my future as a rockstar rather than a middling investment banker… ) went into chapter 11 y’day, a victim of over expansion and unwise over-hopeful App driven spending. (Dang.. there is probably a Gibson sale coming up and just spent my rainy day money on new sails for the yacht..)
This morning the news is about Trump trade negotiations, Trump upsetting stock markets over his inherent naughtiness, pontifications on whether he will succeed or not in getting deals closed and signed. I’m betting he will, but.. does it matter? Or how about the continuing ructions in stocks and bonds: up a bit, down a bit, a bit of worry about liquidity and worries about spreads.
One theme that’s becoming increasingly clear is growing concern on heavily indebted EM and HY companies; they are tumbling like skittles on a championship night. It’s clear from the price action the street is increasingly discounted anything with a whiff of leverage and potential cashflow issues.
Yet as all this is occurring.. it’s important to remember the tau of the long-term investment gods – in the long-term geopolitics and market ructions don’t matter. Growth will beget returns. As the population rises, job rise, incomes rise, then financial assets will inevitably follow.
They do say the single cowrie shell found in an ancient child’s piggy-bank in the ruins of ancient Ur, (perhaps the oldest city in the world), would now be worth more than Apple, Amazon and Tencent combined. If that child had just put into a JP Morgan account – he or she would be on a great pension.
And as the world is set to continue expanding with more and more workers expected to pull their families into the middle classes, and start consuming, travelling and spending with a vengeance, then the long-term outlook looks excellent. Its just the short-term that is more difficult… and as Keynes said.. “in the long-run, we’re all dead..”
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