“Apple is trading at more than 70 times trailing earnings. That’s more than twice the multiple of market leader and Motley Fool Stock Advisor pick Dell and three times that of the S&P 500,” Tim Beyers writes for The Motley Fool. “So why in the world would you want to be a part owner of Apple at that kind of premium? Because, dear Fool, the company is a classic Rule Breaker.”
Beyers writes, “For the uninitiated, the core tenet of rule-breaking investing is to find companies that take a stick of dynamite to the conventional wisdom on the way to outsized economic gains and, thereby, investment returns.”
Beyers looks at some Mac myths in his full article, here’s a sample:
Windows is just as good as the Mac; there’s no reason to get one anymore. “Sorry, wrong again. But this time I need only five words to prove it: no Mac OS X viruses,” Beyers writes.
It’s too expensive to sell Macs in a retail store. “Apple now has 86 lavishly decorated stores. For the first nine months of the year, retail sales up 89% over 2003, to $809 million. ‘Nuff said,” writes Beyers.
“The old saw that Apple is the premium player in a commodity market completely misses the point. Here’s the rub: Kids love Apple. Kids love the iPod. Apple has a way of appealing to this crowd more than does Dell, iPod partner Hewlett-Packard or IBM. And that’s good news, because they have deep pockets. Pollster Harris Inactive says Generation Y — kids and young adults born between 1981 and 1995 — has more than $200 billion in annual disposable income. They’re only going to earn more as they get older,” Beyers explains. “Standards that used to lock customers to a platform such as the Mac or Windows don’t matter that much anymore. And they’ll matter even less in the future. That means kids who develop a liking for Apple now may have no obstacles to becoming customers for life.”
Beyers asks, “Does that sound far-fetched? Maybe. But every Rule Breaking endeavor does at the beginning. Now, who’s up for a vacation in outer space?”
Full article here.
MacDailyNews Take: It’s dueling Motley Fool commentators day! Which one do you agree with most?
Related MacDailyNews article:
Motley Fool Commentator: Apple’s ‘a rotten, slowing, sub-par nerd-niche operator with a shiny surface’ – October 07, 2004