The Media


A good piece which highlights how stupid can Media sometimes be!


As an aside, I do not have an intelligent opinion on whether Apple must be paying a dividend or not or what is the rational level of cash it needs to have on its books. But a lot of comments which focus on “Apple must be taking debt since it has such high FCF’s” reeks of academic financial theory. Apple is in a business in which winners and losers can change in a very short span of time. Its FCF can drop to zero in a jiffy if it does not continue innovating. If scenarios do change, having debt on its balance sheet will not give it time to think. Its like being on a ventilator.

The logic of using debt to prep equity returns can be applied to firms like P&G or Coke, defensive businesses which need not bother whether something is going to ruin their revenue stream in next 3 months. But not for Apple. Not too long ago, Nokia was considered as “the” firm in consumer understanding. Blackberry/RIM was considered to have “the moat” amongst business users. No longer. Technology changes are ruthless.


2 Responses to “The Media”

  1. 1 kishor

    Dear Sir,
    What are your views on Titan Ind. If someone holding from very long (10 years+), is it a time/price for investment sell. OR titan can still give reasonable return for couple of more years from here onward. ( From CMP)


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