Dan Pallotta, of Pallotta TeamWorks, and Harvard Business Review contributor (see related articles below), explains why he has a long position on Apple stock.
Short term expectations for Apple are so high that people are hallucinating, they’re missing the big picture. They literally expect Apple to come out with, like a ‘happiness machine’ or a time travel machine… Apple doesn’t have to disrupt at that level to thrive and Apple doesn’t have to innovate every 20 minutes in order to be one of the best investments on the planet.
People are piling on Tim Cook, saying “Oh, he hasn’t introduced a new disruptive product, he hasn’t innovated.” He hasn’t innovated? This is a guy who, in a year, has taken the company through this horrible process of bereavement and refreshed every single product in the lineup. People forget, Steve Jobs didn’t innovate every year. He didn’t come up with some disruptive product every year. You know, it was four years from the time that he retook the reins at Apple until the time that he came up with the iPod. And, when he came up wioth the iPod, everybody says, “Oh, it’s too expensive.” It was six years between the iPod and the iPhone and when he came us with the iPhone, everybody said, “Well, that’s not a disruption… it’s too expensive.” Then another four years, until he comes up with the iPad and then when everybody sees that, they say “Oh, that’s not a disruption, that’s just a bigger iPhone.”
So, what people don’t understand is that Apple takes the time to get things right and that is the disruption. – Dan Pallotta, Pallotta TeamWorks
Direct link to video here.
Related articles:
Apple’s crybaby critics are intellectually lazy – January 16, 2013
Steve Jobs, the world’s greatest philanthropist – September 2, 2011
Businesspeople: Stop comparing yourself with Steve Jobs – September 17, 2010
Best comments on Apple & Tim so far.
+1
Dan Pallotta, makes complete sense.
The impatient youth & misinformed stock investor; desire constant or immediate gratification.
If Apple doesn’t innovate or invent on a 3 month cycle, if the wow factor lacks lustre, if the market share isn’t on target, if component yields and orders are adjusted, if bad press over software is mentioned, if the os is seen as stale, if the word out is negative… they panic and jump ship.
These people have no faith, don’t see the vision, have no patients nor willing to understand – and can not wait for Apple to get things right.
Its the products that matter
not the stocks
not the candy
he has it right.
I saw the interview this morning. He makes a good case. He is long AAPL so he does have a dog in the fight. It’s not like he’s unbiased. But I do agree with almost everything he said. Maybe we’re both wrong? We’ll see next week and in the coming months.
Alternatively you could argue that as he has invested in AAPL, he has put his money where his mouth is. If he’s prepared to put is own money into Apple, then his opinion about Apple is probably worth listening to, whereas all those people who simply talk the talk can say anything and it doesn’t make any difference to them if they’re wrong.
If a pundit says this is what I have been doing with my own money, then I’m far more influenced by him than somebody who sits at a keyboard and tries to attract clicks.
Sure I agree with that.
no matter what happens on the street, I have Apple, and continue to praise them, their products, and the company ethic toward their customers. There are no other companies I know of that effortlessly take care of their user base, and welcome new users.
Sadly, the female host of CNBC kept cutting him off, and making faces while he was talking, clearly indicating that she thought he was nuts.
Of course this was ironic, because the type of people he was talking about, fit her to a tee.
She is always like that. And did you see how she protected her colleague at 4:38. He says, “Business is NOT a zero sum game!” and then she butts in and changes the subject. These clowns are always doing this.
Is she really always that nuts? Dan Pallotta was the only sane person in that video. Those two tv persons were complete idiots.
is she of korean background?
hes so right you don’t throw out the baby with the bathwater ,you don’t make a square wheel because the round one is 500 years old . apple created the form factor for the mobile phone you make a radial tire (a refinement on a working design) not a square one because its “new”
A CAMEL IS A HORSE BUILT BY COMMITTEE (thats how we got windows) don’t wish that on the mac if it ain’t broke don’t fix it
GENIUS!
wow i just watched the interview again , that made CNBC look like fox ! talk about ganging up on a guest because he says something that goes against your agenda !!! again with apples margins !!! apparently apple should go into negative margin like Amazon and subsidize apple customers for buying their product oh wait the pads and phone ARE apples product they cant afford to get market share for selling what is basically an on line catalog for their true profit base cheap stuff to ship where needed. the thing that makes an apple product so good to own is you don’t get a bundle of half ware promo “lite”programs that nickel and dime you for years every time you want to actually do something with the bundled software ( if you ant to record your own movie you must upgrade the windows player to windows deluxe would you like to pay for that now?) (that was a sarcastic parody of a windows type half ware upgrade offer and might not be an actual product ) this sort of thing does not happen on my mac (except for windows office for mac)
mr taylor all the features of final cut pro were still there in the menus. they were just tucked out of the way SOME editors found the interface an improvement .
I am now a huge Dan Pallota fan! He laid down the straight talk, didn’t let the talking heads interrupt him, and refuted their BS when they kept pushing it. I liked his comments about Amazon’s stock price increase while incurring losses. The only other thing that he could have done was to point out that Apple has the best margins in the business and is capturing the vast majority of the profits. So they can afford to lose a little market share while still making billions in profit.
“I just told you…” Priceless.
Apple isn’t perfect. The company does make mistakes. IMO the delay in releasing a major update to the Mac Pro is inexcusable. But that doesn’t mean that you should go ape shit just because you occasionally get the short end of the stick. I strongly encourage you to go somewhere else if Apple is not meeting your needs. You (may) be happier, and we will definitely be happier without the whining.
After watching the video it is clear to me that if you have any common sense at all you just get yelled at. What the hell were those two idiots on cnbc trying to push?
Mr polotta did an excellent job of keeping them at bay, but I wish the segment would have gone longer so he could continue to refute their garbage. It was interesting how the segment ended just as the two morons weren’t getting their way.
Just that, an agenda.
They are all part of the WS crowd that cheat and manipulate stocks. The media are just dumb barbies that do what they are fed, so when something like this comes along, they freak out because it does not match what their bosses told them.
No matter how much common sense is throw at them. It’s not part of the WS plan.
Apple is just their current choice to pick on. Best bang for the buck. Lie and make up stories to push the stock down while shorting it. Then when it gets as low you they want it, they stop the bad stories and rumors, buy stock and ride it back up.
These guys are evil.
They are not content with making money on regular growth, they want to game the system and make it overnight. So what if it hurts or ruins the company. They just pick another one to manipulate.
Can’t stop listening to the interview. How is it that sense like this is so rare?
Dan Pallota, I shake your hand.
I agree totally. But.
“and when he came us with the iPhone”
lol
Don’t link to something that REQUIERS FLASH U FOOLS!
This guy has it exactly RIGHT!! Thank you Dan!
LOL they got annoyed at him. Why does Wall Street have such a hair across their ass about Apple? How can they sit there and complain about Apples margins peaking? Its not like Apple is trading at a big multiple. Why should slight margin reductions hammer the stock? Meanwhile Amazon never had any margins to speak of and trades at a ridiculous multiple.
It’s a hate thing with Apple.
It’s been 20 minutes?!?!?!?
Perhaps the word analyst should be replaced with critic.
Tech journalist make too much money criticizing Apple and there are too many day traders listening to their babble.
You can add this girl to the list of journalist that just don’t get it.
+100
Kudos Dan! (lol what a nightmare you went through!)
It is the advertising money. Samsung pays ten times the amount that Apple does at CNBC. She is also a slope with deep ties to Samsung.
Halle-f*ckin-luyah.
Why should anyone listen to him? He’s a long hack. Apple does have major problems. To say that Tim Cook is doing a good job by refreshing products, etc. is absurd. He’s been in charge for just over a year! He’s NOT responsible for the majority of the products that have come out… that’s all still the Jobs era. Although I do make him responsible for the iPad Mini because I know Jobs would never have released a non-Retina iPad as a new product.
Make an assessment of Cook at the END of this year moving into next and see then. Because that’s enough time for new directions to be taken.
The big question is, will Tim Cook move things in the right direction? From what I’ve seen, I’m not confident. There’s Maps, the Podcasts App, quality control issues on the iPhone, non-Retina iMacs, the corporatization of their retail stores, no Apple TV yet, a non-Retina iPad Mini, a bizarre low resolution iPod Nano, etc. Apple’s product have become more convoluted and confusing.
I think overall he’s taken what Jobs had and products are starting to become less than perfect. If Jobs were around the iPod Nano and iPad Mini would have been Retina, or not products at all. And he would have NEVER spec bumped the iPad 4. That was just stupid.
Tim hasn’t hired the best people over the last year either and several executives, important ones, have left.
There’s some major issues here guys…
Can’t agree more on what Dan said. The fundamental difference between Apple and other competitors is their philosophy. Apple sincerely believe in great products, and put all their focus in creating the greatest products on earth. The drive behind Apple is much deeper than all else. Samsung will probably stop putting more effort on improving the products if they think they’ve earned enough money. But where everybody else stops, Apple will march forward, because it’s just not right, they just won’t be happy until everything falls into place. At least this is the case when Steve Jobs was still alive. The fundamental difference is they have much higher standard when it comes to product, and live up to that standard do takes time, even for Apple. But those time are so well taken because it will bring them way ahead of anyone else. This has not changed after Tim Cook take the reign, this is in Apple’s DNA. What remains to be seen is, whether Apple can still maintain the same level of vision after Steve Jobs passed away. I think that’s where the worry came from. Good thing is Apple still has John Ive, and as long as Tim is willing to listen and empower him, things are still in good shape. Just stay tuned.