
Our first blog focused on our bearish sentiment for Apple, specifically regarding the leadership, which translated into blasé product lineups and uncharacteristic marketing missteps. There were other fundamental hiccups including gross margins and business efficiency metrics. And while share prices did seem very cheap when measured against trailing earnings, the company was inline with their competitors in terms of equity-capitalization rates ; in other words, Apple was "okay" but certainly not remarkable.
With shares currently tanking in after-hours trading, have valuations now reached crazy cheap levels? Don't be too sure. The stock was overvalued at $600 and it's still overvalued at $500. They lost Steve Jobs. We lost one of the brightest of business geniuses. That gap can never be filled. We all know what happened to Apple without Jobs.
What investors need to understand is that consumer electronics is a vicious industry : even the tiniest of miscalculations can reverberate for years on end. Competitors that compete both on price and innovation are propping up everywhere. Potential tech bulls should take this moment to avoid being a "knee-jerk contrarian."
Sometimes, there's a reason why the herd is leaving...