>at the rate of inflation that is likely to occur over the next several years, holding that much cash is a huge mistake Actually majority of Apple's cash is invested in long-term and short-term securities so they are protected from inflation. I don't think Apple will pay a dividend. 1. the Massive increase in Apple's stock price is more than enough compensation for shareholders. A dividend will just be drop in the bu…
Nope--running x86 software natively (see: Windows, Linux) is still a competitive necessity. If Apple wanted their laptops to run on embedded-class processors with an x86-incompatible ISA and no other venders than themselves, they would have stayed with PowerPC.
I don't expect Apple to abandon x86 any time soon but I would not be at all surprised to see them bring out an ARM-based Macbook Air with fantastic battery life and no heat. Most laptop users have their CPUs idling 80-90% of the time as it is. I don't see any upsides for them in an Intel acquisition.
What's the point of a MacBook Air that's x86-incompatible? Unless they abandon x86 they'd either need to emulate it or fragment their product line, neither of which is an appealing option.
I'd be curious to hear more about your inflation expectations. Specifically, why Krugman et. al. are incorrect in arguing that the economics of stimulus work differently in a depressed economy (or why you think the diagnosis of the US as a depressed economy is incorrect). Also, I'd be curious as to why you think this didn't happen in Japan, and what are the critical differences in the US that will cause inflation her…
I'm not sure what Krugman was referring to, but I'm guessing he was making the case that because people tend to not spend money as freely in a depressed economy, that the risk of inflation or hyperinflation is mitigated to an extent. Effects of inflation become exacerbated when there is an acceleration in spending, whether it be on goods or currency or commodities, because nobody wants to hold the currency. For the p…
Apple didn't exactly stuff that $45 billion into mattresses or anything, it was already "in the economy". Large corporations keep cash invested in securities.
Buying a position in a company like Samsung (solid-state memory or screen tech), Foxconn (manufacturing), LG Display (screen tech) makes sense. Apple is a hardware company, so pretty much all their investments are in hardware or software that increases the value of or margins on their hardware (like chips designers and firms that increase the value of OS X or iOS, which in turn increases the value of Mac and iOS base…
I'm not sure where you've read that Foxconn has a 1.1 trillion market cap. According to Bloomberg they have a cap of 149.5B [1]. Which makes significantly more sense than Foxconn being worth way more than Apple! [1] http://investing.businessweek.com/research/stocks/snapshot/s...
Oops. Totally screwed up reading that one. Didn't see that the market cap was local currency denominated. Thanks for the correction.
I'm not sure what Krugman was referring to, but I'm guessing he was making the case that because people tend to not spend money as freely in a depressed economy, that the risk of inflation or hyperinflation is mitigated to an extent. Effects of inflation become exacerbated when there is an acceleration in spending, whether it be on goods or currency or commodities, because nobody wants to hold the currency. For the p…
Apple didn't exactly stuff that $45 billion into mattresses or anything, it was already "in the economy". Large corporations keep cash invested in securities.
Yeah I'm aware. My point is that they obviously aren't too bullish on cash if they are offloading $45 billion of it.
I'd be curious to hear more about your inflation expectations. Specifically, why Krugman et. al. are incorrect in arguing that the economics of stimulus work differently in a depressed economy (or why you think the diagnosis of the US as a depressed economy is incorrect). Also, I'd be curious as to why you think this didn't happen in Japan, and what are the critical differences in the US that will cause inflation her…
I'm not sure what Krugman was referring to, but I'm guessing he was making the case that because people tend to not spend money as freely in a depressed economy, that the risk of inflation or hyperinflation is mitigated to an extent. Effects of inflation become exacerbated when there is an acceleration in spending, whether it be on goods or currency or commodities, because nobody wants to hold the currency. For the p…
Thanks for the enlightenment. Reading between the lines, the case of Japan's missing inflation might be a variant of "in the long run, we're all dead," given the decades of stimulus and low inflation. It'll be interesting to see how it plays out here.
at the rate of inflation that is likely to occur over the next several years, holding that much cash is a huge mistake Market expectations for inflation are usually factored into interest rates already. While the market could be wrong, Apple probably shouldn't get into the business of speculating on inflation rates.
>Market expectations for inflation are usually factored into interest rates already. Actually that is not true. Historically Interest rates on currency-based investments have not caught up with inflation and taxes. Majority of Apple's cash is invested in long-term securities though so their investment is protected from inflation.
Whether currency-based investments have historically provided positive real returns is an entirely separate matter from whether it is possible to time investment in currency-based investments based on expected future inflation rates.