At what point should investors short Apple shares? Not now, says well known industry pundit and all around crabby guy John C. Dvorak.
Dvorak writes:
People love to speculate on the future of Apple Inc. I am no exception.
I’m often asked at what point should someone short high-flying Apple shares? My response is simple: When the company starts closing stores and pulling back from retail, then the tide has turned.
He continues: “While we all know that Steve Jobs was the motivating force behind Apple, we should also note that the company has gotten too big to be totally dominated by his personality, as was the case in the early years.”
Dvorak says even though Jobs nixed a lot of dubious ideas over the years, it is now clear that many times he himself was overridden.
“The sheer number of moxie consultants involved in various initiatives such as Apple’s retail effort is staggering,” Dvorak says, “The proof will be in the pudding with the opening of the next-generation store in Palo Alto, Calif.”
How much more can Apple grow the retail business?
Dvorak writes, “I see no reason why Apple cannot have 1,000 stores that would all be successful. Staples Inc., the office-supply chain, has 2,000-plus stores.”
Then he goes a little “out there”, as he is prone to do: “Apple seems so adept at retail that there is no reason to doubt that it could go out and buy a company like Staples to expand in the sector. Why not? Apple does have more than $75 billion in the bank, and Staples is worth about $10 billion. Do the math on any retail chain. Opportunity lurks.”
Dvorak finishes by saying that as far as Apple is concerned, the sky’s the limit, and he won’t be betting against them any time soon.
