Now do you think Apple will hit $2 trillion (much less $4 trillion) in market cap in the next four years.
Saul,
I would not could not make a bet,
I would not could not in a house,
I would not could not with a mouse,
I would not could not here or there.
I could not anywhere!
However, I will point out that even Apple knows this. This is why they get licensing from Apple Car play. A chunk of every app sold on the app store, a piece of every movie bought for the Iphone, and they get monthly sunscriptions from me for music and from my wife for cloud storage.
Now I admit, even moan, that Google has better maps and search and Amazon has better music selection interfaces. But, Apple has better privacy. Much better. So much better it even matters, and that matter is growing.
So can Apple hit 2 trillion? Of course! While they have the disadvantage of not being founder led, they are still a good company. Still. . .
Not on a train! Not in a tree!
Not in a car! Saul! Let me be!
I would not, could not, in a box.
I would not, could not, with a fox.
I will not bet them with a mouse.
I will not bet them in a house.
I will not bet them here or there.
I will not bet them anywhere.
Stolen from the Dr. Suess book on my Iphone and posted from my Iphone.
I have a huge library of books at home, but am growing my library on my phone.
After reading your end-of-year report a couple times, I don’t find your review of Vericel in there or how you “catagorize” it. Perhaps you discussed it at length in previous post I missed? If you or anyone could post a link to whereever it was, I’d be most grateful.
Hi Maine Reason, Vericel is a brand new little position and I haven’t gotten to it yet. It’s really Ethan’s recommendation and he has written a couple of excellent reviews on the board. I’ll try to post my notes on it by the weekend.
Best,
Saul
Just to add two more cents to the Apple discussion, it is also possible that Apple’s market cap stays around $1 trillion over the next few years, does not grow to $2T or $4T, yet shareholders make a very nice return on their stock holdings over that span. Apple has, and plans to continue to buy back a huge number of shares with their enormous cash flow, and also pays out a nice dividend to shareholders.
Combining those factors, along with owners that likely have a low cost basis and high taxable capital gains (I do understand that Saul doesn’t typically put much weight on tax implications, but for some of us, if the majority of your Apple holdings are capital gains, and living in a locale with high state and city income taxes can take a big bite out of what you have left to reinvest afterwards), selling Apple shares to buy higher growth companies may not be as much as a slam dunk, as it would appear by simply comparing today’s market cap vs a 3-5 year future market cap.
That being said, I don’t believe that shareholder’s returns on Apple will beat the best performers from our SaaS cloud companies, but it would not shock me if Apple shareholders compounded in the high single digits, potentially close to 10%/year returns over the next few years when you factor in dividends and buybacks even if their market cap doesn’t grow measurably. Probably with less downside risk as well.
-mekong (whose Apple shares only represent 3% of his portfolio, compared to a much larger allocation to SaaS companies)
Saul,
I am surprised by your action on SQ. Just wondering if you would have done that if the stock traded much higher say $80? If I recall when you sold out of SHOP and into SQ you cited increasing growth, and metrics of SQ over SHOP if I recall. Issues such as strength in recession, its competition, its marketcap were well known even then and have not changed. So, apart from the weak price action recently what is new?
CFO departure, and CEO vacation on the minus side.
On the plus side they have improved the payroll app, got into installments, and launched terminal. It is still trying to become a bank and perhaps the recent weak price action suggests the market is unsure of that direction.
What I’m surprised at is why others are surprised. Today 2 years ago it was at $15.00. The year before, around $8.00(vaguely remember as brought at 8 and sold at 29.00. Then back in at 33. Quite a nice return. Sq simply went up too fast in 2018 and into nosebleed territory approaching $100.00.
Approximately what percentage of your new business involves a partner? I’m trying to understand how your products get sold.
OKTA’s response:
We sell primarily as an enterprise and commercial direct salesforce revenue model . We have said publicly that about 15% of our revenue is sold through by partners at this point.
Appartently, OKTA and SAIL have very different models.