Kass: Lessons Learned From Apple’s Collapse

Thursday, January 3, 2019
By Paul Martin

by Doug Kass
Thu, 01/03/2019

* Apple’s abrupt and sizable preannouncement heralds the end of the company’s growth and best days
* Apple pushed the envelope of demand elasticity
* The miss is a sign that the dangerous path of China/U.S. trade negotiations may lead the U.S. into recession

“For everything there is a season, and a time for every purpose under heaven: a time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted; a time to kill, and a time to heal; a time to break down, and a time to build up; a time to weep, and a time to laugh; a time to mourn, and a time to dance; a time to cast away stones, and a time to gather stones together; a time to embrace, and a time to refrain from embracing; a time to seek, and a time to lose; a time to keep, and a time to cast away; a time to rend, and a time to sew; a time to keep silence, and a time to speak; a time to love, and a time to hate; a time for war, and a time for peace.”
– Ecclesiastes 3:1-8

As it is said in the Bible injunction, to everything there is a season. And this winter season has enveloped Apple (AAPL) – after the disappointing lowering of guidance after the close of trading on Wednesday. (Here is a solid summary from TheStreet’s Eric Jhonsa)

Companies (particularly of a hardware-kind) and even NBA legends (like Larry “Legend” Bird who had 13 seasons of brilliance) have finite life cycles and careers that never continue forever.

I recently warned that the one of the core problems facing the U.S. stock market was the maturation and expanding problems at Apple and in the ecosystem of Apple suppliers – from “The Top Ten Reasons We May Be Entering a Bear Market” on December 10, 2018:

#6 The Apple Complex (and its Suppliers) Have Been Upended By a Maturing High-End Smart Phone and Weakening iPhone Market and the Social Media Space is Under Increased and Costly Regulatory Scrutiny: These factors have a broad impact on the market leading technology stocks and for the market as a whole. Moreover, over the last decade technological progress has outpaced regulatory supervision – but this is now being reversed as the social media companies now face the existential threat of rising regulations. The costly imposition of regulatory oversight is something I have been writing about for over a year.

The Rest…HERE

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