More than a few of my friends have heard me complain about how I begged my father to buy Apple stock in 1999 at twenty bucks a share of thereabouts. To be fair, he eventually did buy, once it had cleared the $200 mark. So any time I feel bad about fact that the first quarter-century of my life was basically a fiscal apocalypse from my father’s perspective, I console myself that I gave him the chance to make a couple million bucks and he didn’t take it.
The Twitterati have re-purposed a piece that I wrote about the ephermeral nature of luxury goods as a potential comment on the viability of the Apple Watch. We’ll see how relevant my comments prove to be. Truth be told, I haven’t been terribly sanguine about Apple’s prospects for limitless future growth, which is why I begged Dad to get out of AAPL a year or so ago. He did, but the stock continued to climb — so now I guess I owe him some money, right?
No ;
It’s his punishment for not listening the first time .
-Nate
When I was in junior high, and we had to do that “invest $10,000 in the stock market” school assignment to learn about how the stock market worked, I told my mom, who has done pretty well with her mutual funds and other stock picks, to invest in two companies. S.S. Kresge and Tandy Corp. At the time, Kresge was still operating what were called dime stores and considered old fashioned. Tandy sold leather crafting stuff. The K in KMart stands for Kresge and while the dime stores were circling the drain, KMart was exploding across the land (so quickly that a guy from Bentonville, Arkansas named Walton drove his pickup truck to Detroit (where Kresge was HQ’d) to check out the new idea). Tandy had started a chain of electronics hobby stores selling their own lines of mostly imported stuff called Radio Shack. One of the first retail stores was located around the corner from what was then our new house. Every month, when my brother and I would go over there to get a new catalog and a free battery, the catalog would list more stores.
Had my my listened to me, her portfolio would have ridden the growth of both of those companies in the 1970s and 1980s.
And totally cratered in the 2000’s. Assuming your mom is still alive and investing (apologies if not; I don’t know your age).
But yeah many of the greatest and most untouchable companies eventually miss the memo when some great change comes around and their value goes down the drain. One day it will be Apple, but for now they are a cash machine.
wow. I have faint memories of when there used to be Kresge stores in Eastland Mall (and I think Macomb Mall too.)
Stock Market School Assignment
Yep, I did that in the late ’70s. I ‘held’ stock in Ampex (manufacturer of professional audio equipment) and Rand Corporation (mainframe computer manufacturer later known as UNISYS). After the school year I made no money: virtual or otherwise.
Hey at least he was investing back at the turn of the century. I was still a 28 year old fool accruing 5-figure negative equity in trucks because I couldn’t keep a ride more than a year. My BK in 2003 was well-earned. 🙁
I didn’t even add my company’s stock to my 401k when it had its IPO. Now it is 6x the share price that it was back then (2011 I think). Sigh…
I might have been a “whiz kid” in many respects when I was a lot younger, but I grew up with ZERO financial sense. I have 20 years left to make up for how badly I wasted the previous 25.
The Apple Watch will at least be Apple priced and deliver the Apple experience in whatever apps and abilities normally attributed to the brand.
Your essay on the nature of luxury goods centered on the Hublot Gangbang, which is a product that only exists because of its exorbitant and unmerited price. As a product, in the sense of its actual physical value, the Gangbang is basically the anti-Apple.
Apple’s success is tied directly to the company’s ability to add value to their consumers’ lives while Hublot’s success is tied directly to the fact that money cannot buy taste or knowledge of what makes a quality timepiece, and that self-awareness is seldom found in the wearer of a Gangbang.
Put another way, I’m neutral on the Apple watch. The Hublot can go blow.
Tandy, a name I remember for the computers they made. I think I saw those in issues of Popular Mechanics that my father used to buy. He never invested in anything though, sadly.
I found it amusing to have visited a Tandy leather crafts store more frequently in the past 5 years than I have its Radio Shack spinoff. Fit their circular punches to a cordless drill and you can quickly create radial hole perforation patterns in repro door panels.
How are the sales of the Samsung smart watch and its competitors?
What is the Apple watch bringing to the table?
Why should anyone buy one of either?
Because Apple. It doesn’t have to make sense, it just has to bear the logo.
And the $10,000 gold plated watches? They will sell every single one with ease. Much like Jack’s table article (which I really wanted to comment on), those folks are “paying for the price.”
I don’t buy the because Apple thing. I won’t deny it pulls a lot, but they have to bring something to the table on top of the shiny logo for the customers to bite.
Apple also has failed product in their graveyard, Newton comes to mind, and Wintel still dominates the PC market.
Apple is a first rate design and marketing company shackled to a second rate computer company. Apple agreed with me when they removed “Computer” from their official name.
Being part of BBY’s big Apple Computer push in the early 90s along with the ill-starred Newton, I was well aware of the system’s capabilities and real world failures; the Newtons suffered a form of handwriting recognition schizophrenia brought about by scores of users scrawling across the screen each day. After perhaps 50 total system resets to clear the conflicting input data, the units became completely unresponsive and were retired. The success of USRobotics’ PDA must have stung badly; a tightly constrained subset of the Newton’s overreach in a now familiar and easily handled form factor made Palm Pilot a ubiquitous term shortly after Newton was consigned to the “Where Are They Now” bin.
And as for Wintel . . . what gets things done? Cheap MIPS. You can’t get those from Apple.
When I was 16 I wanted to make my corvette faster than concrete sam. Now I can and don’t care. Maybe one day if I have excessive finds I’ll turn it into the death machine of my 16 y/o dreams.
I told you (in the comments section, repeatedly) that was one of the finest things I’ve read, Jack, and I served as an apostle of that essay & the philosophy/mantra behind it, as I must have sent it to at least 50 people via email.
It’s a timeless classic (ironically, given the subject matter), and many of its contentions will be as valid 50 years from now as they were in 2012 when it was written.
I remember your comment on the article and I appreciate your help, believe me!
I didn’t mean to point to myself as some sort of JB promoter for ingratiation points, but rather, to point out that there was a deep, abiding wisdom in that which you wrote in that article, and that its appeal was severely limited by the relatively narrow audience (auto aficionados on a website that was Bertel BDSM hampered at the time) it was broadcast for.
Now the Greg Koenigs, Francois Jordaans, Daniel Comptons, et al. of this world have discovered it, in a circuitous fashion, two & a half years later, and are rightfully singing its virtue.
Oh, I figured as much, and I am sincere about my appreciation.
I think most of the people who will buy the Apple Watch are going to do so more for the “Apple” part than the “watch” part. It’s kind of weird, this is probably the first Apple product I care almost nothing about (good or bad.) I’ve never worn watches, and this isn’t going to make me start.
It’s actually working in reverse for me—I won’t buy an Apple Watch because I don’t want to be seen as “that guy.”
But what happens to the person who buys the gold iWatch and has to get a new one after 2-3 years like the other apple products seem to require?
Jack,
Your comments re: conspicuous consumption are very much on target, of course. Reading it reminded me of an article John Gruber posted shortly after the Apple Watch was announced last fall. He is an Apple fan, for lack of a better term, and expects the Watch to succeed, but he noted that the gold watch represents an inflection point for Apple. This is their first product where additional cost doesn’t confer additional functionality. Presumably this is why the egalitarians at the Atlantic are now saying ‘Apple has lost its soul’. (Humorous that such vocal opponents of ‘corporate personhood’ confer a ‘soul’ on Apple…)
Gruber also compares the Watch to the iPhone and makes some interesting related observations: http://daringfireball.net/2014/09/apple_watch
Personally I’m underwhelmed by the Watch and I’m interested to see how it evolves. Certainly it seems that most of the Apple products in the last 7 years are in the shadow of the convergence and convenience of the iPhone.
Great to see that article get some new life, it really resonates with those who grew up in the 80s as a car lover to see the change of luxury from durable crafted goods passed between generations to the sort of short term flash that we see now.
You could make a case for the Apple watch either way. If you just want the “movement” you can get the basic model which could possibly be a useful device, and brilliant on their part to realize people are going to want some amount individualization with the range of models which the competitors are doing. They are definitely cashing in as you go up the chain though…same guts more price, maybe a steel band is worth a few hundred bucks who knows. It does feel different than the iPhone which is the same price for everyone, the only luxury is the ridiculous prices they charge for a large flash memory chip.
Me I just bought the elusive Microsoft Band out of curiosity when I found out it was briefly in stock online. I never pick the fashionable stuff whether intentionally or not.
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That’s too funny, Jack. I did *exactly* what you told your dad to do with AAPL: bought in 1999, sold in 2013.
My next call: Bitcoin.