Why the Smart Money Should Spend Some of It Now

Years ago, I received death threats after writing in the San Francisco Examiner that Apple looked like it was about to go under.  That was in 1997, not long after Steve Jobs returned after a 12-year exile. Ironically, he was fired by the man he’d recruited in 1985 to run the show — cue the hisses and boos — Pepsi CEO John Sculley. Apple shares at the time were trading below $5, and its sub-5% share of the desktop market was in a seeming death spiral. The iPhone was ten years distant, and it appeared that nothing could save the company. How wrong I was! My Examiner column provoked such a firestorm that I recanted its conclusions a few weeks later. Any firm that enjoyed such fanatical support was unlikely to go out of business, I concluded. If only I’d bought a thousand shares at the time.

I mention all of this because last week’s hit-piece on Apple elicited nary a response — not in the Rick’s Picks ‘comments’ section, not on websites that feature my work — not in my own chat room. For all I know, the think-piece went unremarked even in the blogosphere, where the leastmost of our concerns often devolve into bloody battles. Regardless, the premise of my commentary — that shorting APPL and buying TSLA would prove to be the trade of the decade — will be tested by time.

Gates Renounces His Religion

For now, let’s move on to a favorite topic, the fraudulent ‘wealth effect’ that has seized, if not the proletarian mind, then indeed the minds of the 20% who have most benefited from it. The latest faux-wealth superstars are Amazon and Microsoft.  Shares of the latter jumped $23 last week on earnings news that added about $300 billion of quasi-gaseous wealth to shareholders’ accounts. Perhaps it explains why Bill Gates renounced his climate-change religion: he’s grown so rich that he can afford to take on the problem all by himself if it should threaten the millions of acres of prime U.S. farmland that he owns. (Actually, I’m being facetious. Gates changed his mind because Trump brought him to his senses, convincing him in a sit-down meeting they’d just had that there was no longer big money in the climate change racket, or in pretending Greta Thunberg is Joan of Arc.)

Amazon shareholders, especially Jeff Bezos, had a sensational week as well. Last week’s strong but unsurprising earnings news produced a windfall of around $300 billion for them when the stock jumped $27 to $250 in mere minutes. What’s a guy to do with all that money? Bezos already owns a 417-foot sailboat with, of course, the tallest masts in the world, and he could buy five more just like it with the $2.5 billion he made in a single day. As for everyone else who was in on the take, there was still $297 billion of instant booty to go around. An unseemly portion of it will be spent on Lamborghinis, Tiffany bracelets, $400,000 Hermès handbags and other bric-a-brac of the super-rich. The merely filthy rich can take heart, though, since the remaining trickle-down will still suffice to make next summer’s rental in the Hamptons, or yachting in the Mediterranean, affordable.  But the lucky winners should consider spending some of the lucre now, since the coming bear market will destroy wealth even more quickly than the airless gaps that are everywhere on stock charts have created it.