Tags: McLean | Apple | cash flow | hoard

You Can’t Tell the Players Without a Scorecard

Friday, 08 Feb 2013 07:47 AM

By Bill Spetrino

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I remember going to my first baseball game at age 6 with my grandpa, who I learned my sense of thrift from, although I didn’t know it the time. At my first game, which was Mickey Mantle's last season with the New York Yankees, my grandpa said, “you can't tell the players without a scorecard.” Given the Yankees were and still are the only team that doesn’t put the name on their jerseys, that was certainly true even though I knew Mantle was number 7.

Here we are now 45 years later and yesterday, I watching CNBC 's Fast Money show, which stars real stock traders who tell you about how to trade the market. I enjoy this show because it is usually very informative and I recommend it more than business school for understanding and learning about how the stock market works.

However, every now and then someone with little or no qualifications gets on the set.

Editor's Note:
Small-Town Ohio Accountant Uses Simple Forgotten Secret to Help Investors Pocket Millions


Bethany McLean is a contributing editor for Vanity Fair magazine. She is not a finance major, but is an English and math major who worked for Goldman Sachs as an investment banker. She did not and does not manage money, and her claim to fame is she wrote a book about the Enron scandal.

“I think psychology is a really powerful thing, and it’s human nature to believe that because something was once worth $700 a share, there’s a reason it should be there again," she said, referring to Apple stock.

McLean also said there was the belief that Apple’s normalized earnings over the past couple of years weren’t as high as widely believed, “and Apple’s true level of earnings is actually much lower, making it more expensive stock than it might appear by the P/E [price-earnings] measure.”

Then she possibly said the most asinine thing in my opinion I have ever heard on CNBC. McLean said that “Apple skeptics” had thrown around a stock price around $200.

“Now, the huge amount of cash Apple has provides a floor under the stock, and tax-adjusted it’s about $111 a share right now. So you’d say it’s hard to believe it’s going to go to that level until they show signs of starting to burn through cash, if they do,” she said.

“There’s an argument that technology companies, once innovation dries up, they do start to burn through their cash hoard, so you’d have to see signs of that before the stock goes below $200.”

To correct all the inaccuracies in her article she was promoting about Apple and in her statement on CNBC would take about six or seven weeks of articles

My complaints are very basic 1) the woman has no qualifications; 2) she has no skin in the game, meaning she is not short Apple stock despite her saying it could drop over 55 percent; 3) she didn’t have any of her own opinions, instead she was quoting what skeptics thought without naming ANY of the skeptics; and 4) no person knows what the “tax-adjusted cash and short-term investments” Apple has on the books and guessing what it is is irresponsible and inaccurate.

The last statement is by far the most asinine thing I ever heard in my life: “There’s an argument that technology companies, once innovation dries up, they do start to burn through their cash hoard.”

Apple has $137.1 billion in cash and Apple’s BOTTOM line cash flow exceeds $1 billion per WEEK.

How can Apple go through their cash hoard if they have a cash flow over $1 billion per week and they have $137 billion of cash????

In fact, Daniel Loeb, David Tepper, Andreas Halvorsen and George Soros all own large stakes in Apple and all paid substantially more than $200 per share.

The four men listed above have something in common — they all are MULTIBILLIONAIRES and manage money for a living.

Why is this woman and CNBC collaborating? I think the “Apple going to $200 per share” gets media attention.

Editor's Note:
Small-Town Ohio Accountant Uses Simple Forgotten Secret to Help Investors Pocket Millions


And if Apple goes down, the woman can say she “predicted it first” and would get a ton of media attention so she can pretend to appear relevant.

McLean has the right to her own opinion, but I think she should go on TMZ or Entertainment Tonight and not CNBC is all I’m saying.

The viewer at home should not be seeing someone who makes no specific arguments, has no specific credentials as an authority and has no position in the stock.

About the Author: Bill Spetrino
Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the Dividend Machine. Discover more by Clicking Here Now.

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