{"id":26469,"date":"2013-02-07T18:08:24","date_gmt":"2013-02-07T17:08:24","guid":{"rendered":"http:\/\/feedproxy.google.com\/~r\/zerohedge\/feed\/~3\/3kqVE5Fcg2c\/story01.htm"},"modified":"2013-02-07T18:08:24","modified_gmt":"2013-02-07T17:08:24","slug":"apple-big-hedge-fund-stars-the-sell-sidevaudeville-act-to-burn-your-hard-earned-money-as-a-punchline-thats-just-not-funny","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/breaking-news\/apple-big-hedge-fund-stars-the-sell-sidevaudeville-act-to-burn-your-hard-earned-money-as-a-punchline-thats-just-not-funny\/","title":{"rendered":"Apple, Big Hedge Fund Stars & The Sell Side\/Vaudeville Act To Burn Your Hard Earned Money As A Punchline That’s Just Not Funny"},"content":{"rendered":"
\n

I see many pundits on CNBC commenting on Apple. I believe they are ALL wrong! To begin with, nearly all of them are coming up with revaluations after the fact – which is simply too late and lacks credibility. Second, Apple has someserious steps to take if it is to get back into the mobile computing race<\/a>. David\u00a0Einhorn’s recommendation to return cash to shareholders (on the\u00a0CNBC front page today<\/a>) is not one of them. He’s approaching this from a trader’s perspective, and not from the perspective of a strategic long term investor. To date, Apple has outperformed nearly all hedge funds in the reinvestment of its cash. If Apple does the right thing, the \u00a0ability to replicate this performance by only 50% will whip the pants off of nearly every hedge fund, Einhorn’s included. In addition, Apple is about to go through a depression style bout of margin compression that it will need cash to battle. I explained this to a group of entrepeneurs last year. Basically, Apple’s $137B+ in cash is a call option on future opportunities and a put option on future mishaps. Einhorn is asking management to sell that call\/put option straddle now, and forgo the ability to capitalize on future opportunities while running naked against margin compression at the same time that Apple’s competition has surpassed it in technical ability (product\/service wise) while Apple has shown ineptitude in competing in the cloud (see the maps fiasco), the next battle ground for the end user. This option sale will be had for the one time premium of a cash distribution. Wise, eh?<\/p>\n

Does this mentality smack of the short term-ism indicative of a trader to you, or is it the mentality of the long term, innovative vision of Steve Jobs that got Apple where it is now? See the video below where I delve into this in detail…<\/p>\n

<\/object><\/p>\n

Since I was practically the only one (at least that I know of) to accurately and timely call the turn on Apple BEFORE THE FACT, I would love to take this time to point out what it is that’s wrong with Apple and what it would take for it to regain its shine. Just to illustrate this point, let’s reminisce, shall we…<\/p>\n

\n