Buy Apple, Sell Apple

‘Eighty per cent of our revenues are from products that didn’t exist 60 days ago.’

This seemingly extraordinary quote is attributed to Tim Cook, CEO of Apple and it was doing the rounds in the papers at the weekend.

It’s obviously supposed to make you stop and consider what an amazing company Apple is (I agree), but as I was reading this in the business section I also presume it’s supposed to make me consider what a great investment Apple shares will be (I disagree).

To start with the products in question aren’t really new products, they’re newer versions of existing products. Not the same thing at all.

But the real reason I wouldn’t touch Apple shares is because eighty percent of their revenues are from products that didn’t exist 60 days ago.

Any business that relies on industrial levels of creativity to succeed is bound to slip on a banana skin eventually. Just ask the bosses of the big pharma’ companies. They had masses of success in the seventies bringing new blockbuster cures to market, so much so that they decided to reinvest their profits to generate even more innovation. Glaxo’s huge R&D operation at Stevenage is testament to their heroic failure. It turns out you can’t buy creativity and original thinking.

My idea of a great investment is the company that had one wizard idea 60 years ago and is still making money from it today.

Love my iPhone5 though.


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