Steve Jobs: The Lost Interview

Great interview with Steve Jobs, done in 1995, 19 years ago.

In 1995, during the making of his TV series Triumph of the Nerds about the birth of the PC, Bob Cringely did a memorable hour-long interview with Steve Jobs. It was 10 years since Jobs had left Apple following a bruising struggle with John Sculley, the CEO he had brought into the company. At the time of the interview Jobs was running NeXT, the niche computer company he had founded after leaving Apple. During the interview, Jobs was at his charismatic best - witty, outspoken, visionary. In the  end, only a part of the interview was used in the series and the rest was thought lost. But recently a VHS copy was found in the series director's garage. Now, cleaned up with modern technology, and put into context by Cringely, the entire interview will be screened in Landmark Theatres.

 



 

 

• Entrepeneurship at its best, Apple built up from the ground.
• "I never did it for the money", instead the passion for products and the hard work put in.
• Companies run by product people (like Apple) vs companies run by sales people (like PepsiCo).
• Jobs being at the right time (invention of the desktop, etc) at the right place (Silicon Valley).
• Jobs using simple but very powerful words.

Ryan Carey wrote: The Eight Greatest Quotes from Steve Jobs: The Lost Interview

 



Apple and Barrick Gold

I wrote before about Apple, especially here. I have decided to take profit on the counter (which I bought around USD 450 per share), not because I think the share is expensive, but to hold some more cash. The share price has performed quite well, but is still below its all time high of about USD 700:

For those who are interested in entrepreneurial stories, they might want to consider the movie "Jobs".

Not the best movie ever produced, but quite decent, and it does show how the most valuable company started from its humble beginnings. Will we ever see such a success story in SE Asia? I definitely hope so.


Barrick Gold has not exactly been my most successful share so far, the reason being that gold has performed quite badly this year. Marc Faber mentions in his December newsletter that precious metals and their miners (including Barrick Gold) are some of the rare value plays at the moment.

For me, investing in Barrick is a long-term investment based on the believe that eventually there will be higher inflation due to the actions of the central bankers worldwide. As Marc Faber has indicated, the US dollar has depreciated 95% of its value in about 80 years time (meaning average goods are 20 times more expensive). The US dollar will again depreciate by 95%, but this time it will happen much faster.

From Seeking Alpha, some articles regarding Barrick (the reader might have to sign up for the full articles, which is free of charge):

Barrick Gold: Have We Seen The Bottom?
Barrick Gold - A Contrarian Play Based On Improved Capital Allocation
Has Barrick Gold Deceived Investors?

For those readers who might be shocked about the last link, I would not say this is completely normal practice, but it does happen regularly in the Western markets. All companies do like to polish up their current position and future possibilities, and sometimes they might go to far. Professional investors who buy shares based on information from the company might feel that they have been misled on certain assumptions. Specialized lawyers might want to take up these cases, sometimes for a part of the reward. This type of action is very rare in Asia, I guess the optimal situation would be somewhere in the middle.

Apple: switch to Samsung?

I have blogged about Apple before. The stock had a very nice run up lately, people who bought on dips the last few months are rewarded nicely:

Apple's quarterly results were good. Carl Icahn has bought into the stock and shareholders are hoping that he will pressure the management to increase dividend pay-outs or the share buyback program.

More information can be found here.

However, there are also other voices. One fund manager who I respect advices clients to switch to Samsung Electronics. The reason being that the real growth for the next years is in the mass market space, where Samsung is dominant.

Are you a value investor? Take the Apple test

Interesting posting from Prof. Ashwan Damodaran about Apple on his blog "Musings on Markets".

He writes:

"Based on my estimates, and they could be skewed by my Apple bias, at its current stock price of $440, there is a 90% chance that the stock is under valued."

 

Plus 5 investment tips from the professor:

1. Don't bet the house: No matter how confident you are in your value assessment, don't go overboard and invest a disproportionate amount of your portfolio in Apple. This is not just about you being right on the value but also about the market coming around to your point of view, and that is not in your control or mine; betting more than 10% of your portfolio on this stock strikes me as foolhardy.
2. Don't double down (Dollar averaging): I have never been a fan of dollar averaging, which not only muddies the water about when/how much you invested in a stock but results in increasing your bets as the market goes against you. Take a stand against the market but do not make this an ego trip, where admitting that you are wrong becomes impossible to do. Thus, while I feel more confident now that the stock is under valued than I was a week ago when I bought the stock for $500, I don't plan to buy more shares.
3. Think of buying the business, not the stock: The old adage that you are buying a piece of a company, not a share of stock, is particularly relevant when you make a bet like this one. My intrinsic valuation is determined by Apple's capacity to generate profits and cash flows and is not dependent upon whether portfolio managers are investing with me or analysts are lowering their price estimates. If I buy Apple at $440 today and I can hold the stock, I will get a share of a cash that is paid out and a share of ownership in the cash that is withheld. I have to keep reminding myself of that truth, even if the market moves against me.
4. Do not track the day to day stories: In an increasingly connected world, I know that this is really difficult to do, but there is no harm trying. Turn off your financial news channel, don't read opinion stories about Apple and avoid equity research reports like the plague.
5. Be willing to wait... even if you are not sure what you are waiting for: The big question that those of us who chose to make this bet face is what the catalyst will be that brings the market back to its senses (at least as we see it...). From my experience, it is almost impossible to tell. For instance, how did Netflix, which was a tailspin, a year ago, turn itself around? There was no single precipitating event but a collection of small news stories and solid earnings reports that seemed to settle the fears that investors had about the company's future direction. With Apple, it could be a new product, a couple of healthy earnings reports or a stock buyback.

Disclosure: I have also started to buy some shares of Apple at USD 450, knowing very well that the share might easily go down further.

At the start of each year, Damodaran constructs a spreadsheet with fundamental data from each listed stock. The dataset can be found here. Malaysian and Singaporean stocks can also be found under "emerging markets", in the rather peculiar category "Small Asia". I recommend to first download the file to disk and then to work on it. It might be interesting for value investors who like to work with  filters to find some value ideas.

Apple: highest profits but share drops 12%

Some quick facts on Apple and its earnings release yesterday:

• Apple's calendar year 2012 profits were the highest of any company, ever
• Its Q1 2013 earnings were the 4th largest quarterly profit of any company in history
• Apple trades at 10.2 times trailing earnings, less than 9 times future forecasted earings
• Apple has USD 137 Billion cash, about RM 420 Billion, Apple alone could almost settle the whole of the Malaysian debt
• Excluding cash (USD 145 per share), Apple is trading at 7 times earnings
• It's share has dropped from a high of 700 to 450, a drop of 36%
• But ..... critics will point out that Apple's margins are falling, and they are correct

Apple's history in launching innovative products:

2001: iPod
2004: iPod mini
2007: iPhone
2010: iPad
2013: Will we see another invention? Capital expenditure for R&D is up.

The above written with the help of an article from SeekingAlpha:

"In Defense Of Apple: Battling The Mounting Hysteria" by Helix Investment Management.

The share price is exactly back where it was one year ago:

Worst business move ever?

Ronald Wayne, the "third investor in Apple" sold his 10% share of the company for USD 1,500. The investment would now have been worth RM 46,000,000,000!

"US pensioner Ronald Wayne gave up £15bn slice of Apple" by Nick Allen.

It could rank among the worst business moves of all time. In 1976, Ronald Wayne decided to pull out of his friends' computer company after two weeks, fearing he could be saddled with debts if it failed.

After drawing up the original contract for the firm and designing its logo, he withdrew his 10 per cent stake and walked away with $1,500 (£975).

Speaking from his home in a remote desert town near Death Valley, Nevada, the little known "third founder" of electronics giant Apple said he has no regrets.

Mr Wayne, 75, relinquished a stake that would now be worth around £15 billion and lives on a state pension and deals in old stamps and coins to supplement his income.

More:

http://www.telegraph.co.uk/technology/apple/7624539/US-pensioner-Ronald-Wayne-gave-up-15bn-slice-of-Apple.html