Wall Street Analyst Calls For $3 Trillion Market Capitalization Of Apple

Yahoo Finance is on a roll.   They’ve got some real critical thinkers over there writing Pulitzer Prize-winning journalism.  Now they have some financial savant I have never heard of calling for Apple to ultimately reach $3 trillion market capitalization.

The financial industry is notorious for making calls like this.  In 2000 there were countless calls including Cosmo Kramer’s notorious call that Sun Microsystems was the single best idea of many great ideas he had.   That was before all of his ideas imploded and Sun dropped literally 99% and would have more than likely gone out of business were Oracle not to purchase the company for its software assets. 

The entire U.S. private sector GDP is only about $10 trillion.  Apple with a capitalization of $3 trillion?   Even $1 trillion?  Do these people recognize the ridiculousness of their linear thinking?  People get paid for this?  Honestly? 

Yes, Apple is a well-run company.  Yes, they are a premium brand.   Not even considering fundamentals, which are stacked against Apple, even the best premium brands are generally only able to sustain 15% returns on equity and half that on assets.   Apple’s numbers are currently 40% return on assets.   No technology/consumer company has ever been able to sustain that number over a longer term.  Ever.  Never.  No company.

Sure Apple has a big wad of cash.  Ain’t no trillion dollars.   And anyway, who cares?  What are they going to do with it?  Buy a company and end up with a decade of underperformance caused by integration woes?  Expand the company into new businesses to dilute the brand like Harley-Davidson did before it imploded?  Expand production to not only service people on planet earth but also an every planet served by Star Trek and Star Wars?  Or are they going to give it to shareholders as Microsoft did and watch the stock price implode? 

Today, Apple pays no dividend.  A $3 trillion market capitalization would mean that you are paying 175 years of earnings to own this stock.   A stock with completely unsustainable business and fundamental dynamics at its back right now.   Good luck with that. 

Do you have some idea why our economy is collapsing?  The babble out of financial clowns is endless.   We need a public banking system that serves human development rather than the deluded fantasies of financial clowns.