For the past two weeks the internet has been aflutter with arguments, tirades, and ramblings over Apple’s finances. It began with Apple reporting record profits, followed immediately with its stock taking a fairly significant dip. The first wave of reporting was how even though Apple made record profits, it failed to meet ‘experts’ expectations, and thus it was in a downward spiral. This was quickly met by a second wave of pundits pointing out how absurd that logic was. Things became even more heated when on Tuesday Amazon reported a 45% decline in profits and subsequently had its stock price go up.¹ Much has been spoken as to why all this occurred, yet I would like to tell you why you shouldn’t give a damn.
The vast majority of people’s interaction with Apple is through its products, not through its stock price. These are the consumers, and probably most people reading this are merely consumers of Apple products and don’t have a cent invested in the company. For consumers, Apple’s stock could be priced at $1 or $1000 a share, and it wouldn’t make a difference. All consumers care about, or should care about, is what products Apple is producing. That is all I care about, whether Apple is producing and will continue to produce great products. If its stock price is artificially low or artificially high, I don’t care, and neither should anyone else who hasn’t invested in that stock.
I realize the counter-argument is that if the stock price is too low, it will affect the company negatively and eventually start affecting the products they make. Yet, a lot of the complaints I’m reading are not that Apple is hurting financially because of the low stock price, it’s that the stock is too low despite the fact they are doing so well financially. Basically people are mad about the contradiction they see between the stock price and the actual financial viability of the company. That’s a financial analyst problem though, and I don’t think regular consumers should care at all.
The products are what consumers should care about, and if the products are beginning to look bad, that is when they should begin to be concerned. Apple’s stock price is irrelevant. It’s the same with Amazon. I don’t care that Amazon doesn’t make a profit, or that its stock may be artificially high, all I care about is I can order cheap stuff and have it quickly delivered to my house. Whether a company is actually making money is not my concern, up and until it starts to raise prices or make crappy products.
I realize though that Apple is a lightning rod for righteous, irrational, and just plain stupid stories in the press. It’s just the nature of things when you are one the most popular companies in the world. I think the lesson one should take away is just to ignore all these stories about Apple’s finances or stock price and enjoy the actual products it produces.
On second thought, there might be a more valuable lesson – don’t invest in the stock market.