Greenwald 2005 on Apple: I don’t think a smart value investor will invest

Gotta love this scribd document from 2005 …

On page 39, Bruce Greenwald opines about Apple:

the customer base is not growing so the earnings base is unsustainable —and they haven’t been. Apple
has made pitiful amounts of return on its capital interrupted by bursts of enthusiasm for the stock when the
stock goes up. I don’t think a smart value investor will invest hoping for bursts of enthusiasm. You invest when
the price is well below asset value

In retrospect, not terrific advice. Since about jan 2005, AAP returned 2607%, compared with the Dow if 32%.

About mcturra2000

Computer programmer living in Scotland.
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2 Responses to Greenwald 2005 on Apple: I don’t think a smart value investor will invest

  1. CantEatValue says:

    I also saw an interview with him around the same period calling Google a great short idea. That didn’t pan out too well either… the thing I dislike about Bruce Greenwald is he has a good idea (that, in general, buying things like assets and proven earnings power cheaply tends to do well) but has developed complete man-with-a-hammer syndrome and cannot fathom how growth could ever be worth something. It’s a perfectly rational thing to say “I can’t predict the growth here, I find it too hard to value, hence it goes in my ‘too hard’ pile” but it’s not to say “growth is never worth paying for, QED Apple & Google are terrible investments” which he effectively does.

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