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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Mark Palmberg who wrote (25533)	7/16/1999 1:35:00 PM
From: MeDroogies	Read Replies (1) \| Respond to of 213186

Cramer just signed a deal w/Fox. I could tell you stories....

To: Mark Palmberg who wrote (25533)	7/16/1999 1:44:00 PM
From: Adam Nash	Read Replies (2) \| Respond to of 213186

Let's be fair: Investing in both Apple and Pixar do require quite a bit of "faith" in the business models that have been described, either explicitly or implicitly, by management. Pixar has a unique business model that really has no comparable match. When Cramer says why would you try to mess with it, he's saying why invest in a company where there is so little empirical data on their business model? I don't take that as negative, just (ironically for Cramer) conservative. There is certainly a valid investment philosophy to only invest in businesses where you know their business intimately. With Pixar, that's impossible, because they are really trying something new. No one has ever tried to be a stand-alone animated movie studio before, and no one certainly have ever been able to outsource marketing and distribution of animated movies to Disney before. And no one has worked on the increased ability to leverage digital studio assets, as opposed to tradition studio assets. I own Pixar, but I personally agree that at some fundamental level I invest because I "believe" that the business model will work. I believe that Pixar will continue to create great animated movies that will produce long-lived revenue streams from their digital studio assets. As for Apple, once again, there is a faith element. Read any business book on success in the technology industry, and whether explicit or not, Microsoft is everyone's prototype for a successful technology company, and Apple is usually the prototype for one with problems. Now, on some levels, Apple is performing very well, and has been for a couple of years. However, we still are not seeing real revenue growth, and we still are not really seeing much of a strategy beyond: "Sell Macs". That being said, I am long Apple because I do believe they have strategies in the pipe for all of these issues. But I can understand someone saying that of the thousands of companies out there, they can find stocks out there that don't involve as much "faith" in change. At some level, there is a faith element with every investment, but I think it is fair to say that there are differences when it comes to Apple and Pixar. I am long Intel, not because I think their chips are great, but because I personally believe they have the best financial management of semiconductor manufacturing in the world. They have the brand, and they are the lowest-cost producer. They have spent over a decade demonstrating this (to me), so my faith here is that I still think they are on track to continue. That's different than the type of faith in Apple, where I believe they are finally "getting it" in terms of managing their market. Intel has been "getting" their market for quite a long time.