Barton Biggs Explains Why Apple Could Go The Way Of Sony

Barton Biggs

In an interview with BloombergTV, hedge fund manager Barton Biggs makes a very unflattering comparison for Apple.

Here’s the partial transcript provided to us.

You can watch the video here.


On Apple’s announcement today:

“I think Apple and its board did the right thing in the long run, for investors, as opposed to speculators. You buy stocks for the future stream of dividend income. It’s a very good sign that Apple is dealing with this cash hoard that they have in this way, by paying a dividend.”

“I think it’s a good sign for big capitalisation technology stocks. It really is what counts. The present value of a stock is the present value of its long-term stream of dividends. It’s good that a big tech company is showing that they are going to pay dividends to their shareholders.”

“Apple’s done exactly the right thing. They could have really screwed this up by making some ridiculous acquisition or a huge one-time cash payout would have been a mistake. The board has a very exquisite dilemma. I think they’ve solved it well.”

On whether he will buy more shares of Apple:

“We have a position in Apple. It is a good sized position. I am not inclined to buy it or sell it. I like Apple the way it is.”

“I think you have to wonder about any technology company that produces a very, very hot consumer product because the history of the modern world is that all technology, electronic consumer products become commodities in the end. In the end, the life cycle of these things is relatively short. With that in mind, I think Apple is appropriately valued.”

“[Apple] is a consumer-products company that’s been selling a specialised type of consumer product that eventually has a definite life cycle. The things Johnson & Johnson sells are consumer products that have a permanently slowly rising demand. You want to compare Apple with something, I think it would have to think back on Sony or a company of that nature — that was producing a very hot consumer product that eventually turned into a commodity. You see what happened to Sony.”

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