Apple being treated like they’re totally broken is NUTS

So Apple is now down to almost $450.  As a long term investor I’m still up almost 300% on the name, but having watched it drop from $700 hasn’t been fun.  That said, I don’t lose any sleep over this stuff.  The market is a voting machine in the short term, and is wrong often.  In the long term the market is a weighing machine, and the only thing that matters is results.

Side note – I still remember having the most crazy of arguments with someone on an equity sales desk about this.  Apparently I’m wrong and all stocks are valued based on momentum, forever

Anyway, back to Apple.  If you adjust for the 13 week quarter this year (vs 14 weeks last year), they posted their most profitable quarter ever.  If you consider that they were supply constrained on iMacs, they’d have done even more revenue on a comparable basis.  Oh, and they didn’t build nearly as much channel inventory on iPhones this quarter.  People forget about that stuff.

Still, margins are coming down.  That freaks out analysts and investors.  It doesn’t freak me out.  I want to see Apple’s products, like the iPad Mini, sold at attractive prices so when tablets cannibalize PC sales, Apple simply kills Microsoft.  It will be brutal for Redmond, but it’s going to happen.  Yeah, Apple loses out on some Mac sales too, but since they’re still a tiny sliver of the worldwide PC market, they end up benefiting from this trend – bigtime.

Oh yeah – and China revenues grew 67% last quarter for Apple.  Show me another tech giant posting that kind of growth in China.

(insert cricket sounds … rustling leaves in the wind)

I wrote about all this in more detail over at iMore.  Check it out and drop me a comment.