Topics
Brighton, England
Tuesday, March 11th, 2008
https://adamkhan.net/rambles/why-aapl
At 77, Warren Buffett is now the world’s richest man. To me it makes sense that this position is held not by someone whose primary job is to produce goods or services but to invest in those who do. Me, after two decades of wanting to, I finally bought some stock. It wasn’t just poverty that got in the way; I think it was also the hassle. Now I can trade online via a web site — no visible middlemen — which is the way I always wanted to do it. The site I chose to use from here in the UK is the aptly named SelfTrade.
What I bought is no big surprise: AAPL. The stock had reached a peak of $200 and I bought a month or so ago in two little batches, at $133 and $127. Hey, it’s a start. Today the stock closed at $126 after reaching a recent low of $119 yesterday. Buffett talks about good companies having moats protecting them from competitors: Give me $100 million to dislodge Coca Cola from being the world’s soft drink and I still couldn’t do it, I read someone recently attribute to him. That’s a moat.
To my mind, Apple’s operating system is such a moat. As one of the many people who spends too much of his day in a chair in front of his computer, the computer’s operating system is a genuine contributor to quality of life. Apple would have to seriously mess up and somebody else would have to do some amazing work to make me change. I’m locked in, as are very many others. Few people now are likely to switch from Apple to Windows — but that does not hold true for the other direction.
This is one big reason for believing in Apple as a great investment: the dominance of Windows. Though it may take some time, Apple’s OS is eventually going to dominate, it seems to me, and right now with only 6% or so market share that’s a lot of computers to sell. And of course, Apple is the only operating system manufacturer that also sells the machines it runs on, let alone owns the shops that sell them, so that Apple stands to become a colossus, even a frightening one. There is no other company in the world that has a vertical monopoly on a must-have consumer product costing around $1500.
Beyond that, it seems to me that having the dominant computer operating system in the world really does put you on top of the world. Is there any other product that is such a glue holding together our current modern global society? Commercial aircraft I guess, Boeing and Airbus, but still, these are not mass market products so the number they can sell is limited, and they are not digital so profit margins can never get too huge. I suppose this is very intangible, not something that a stock market cares about, but it seems such a fabulous position to hold.
When working at Deepend in 2005-6 I was the only Windows guy. Just as I base my shopping on the prices of some common baseline items, eg, chicken corn soup in Chinese restaurants, so I based my opinion of Apple’s OS X on its window handling. In OS X a window can only be resized from a very small handle on the bottom right corner whereas in Windows it can be resized from anywhere along an edge. The Windows way seemed so obviously more helpful that I presumed OS X would be riddled with other idiocies. But OS X’s Dock made me think otherwise: here applications are hidden but appear when you need them, and grow as you approach them, making it easier to click on them, whereas in Windows they stay small.
Apple’s unhelpfully limited windows manipulation turned out to be an outlier rather than emblematic. And there’s now a solution, Zooom, which remedies OS X’s window manipulation weaknesses by allowing you to increase a window’s size and pick it up and move it from anywhere on the window, making it instantly better than Windows’ window manipulation.
And I’m writing this blog entry using MarsEdit, great software for blog publishing. The equivalent for Windows is Live Writer. While looking for that (aren’t I helpful?) I see there’s such a thing as Windows Live. When in the Apple ecosphere you can happily forget all about the Microsoft one. I wonder in which year it will be that most of us do. Until then I believe I’ll be buying more AAPL whenever I can.
My thanks to you and goodnight.
