Steve Jobs Is Leaving Apple?
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If you ask the company the short answer is no. Steve Jobs is not leaving Apple. What he is doing is taking a leave of absence in order to focus on his health. You'll remember about a year ago that there was some question as to Steve's condition, and the company went out of its way to quell investor's sense that something might not be quite right with the man at the helm of the leading gadget maker, and second largest computer software company in the world. Those fears have come to fruition as the recent news was announced regarding Jobs' health, and while the trading exchanges were all closed in the US on Monday due to the Dr. Martin Luther King, Jr. holiday, stocks still traded in the UK, including Apple's stock. As a result of the announcement, shares fell sharply, and the reason why really is no question.
Steve Jobs is Apple. At least in the eyes of investors, Steve Jobs is the mastermind of the world's neatest and newest toys. Without him, the vision that is Apple might go with him, some feel.
The long answer is that I think Steve Jobs may well be leaving Apple, and I think it is certainly something that investors in this company should prepare themselves for. The situation regarding his health may be much more serious than we have ever been lead to believe, and if you ask me, the announcement serves more to transition investors, in my opinion, for what is to come. Steve Jobs knows as well as anyone that there is a direct link between the performance of the company's stock and Steve Jobs himself. So, the wording of the announcement is sort of a saving of face of the Apple company, and the Apple vision, which has been linked to Steve Jobs from the start. The announcement, and the words "leave of absence" is to ease investors into the very real possibility that Apple may have to go on without Steve Jobs' inputs, and perhaps without Steve Jobs at all.
This leads me to a sidebar thought that investing in a man, rather than in a brand may not always be the best strategy. It may not also be a good thing for a company to put so much emphasis on "the man behind the curtain" either. Brands are forever. Men are not. And when the men go, then there is damage control that becomes necessary. This thought is a large part of the reason I've never owned a single share of Berkshire Hathaway's stock, although I must admit I've owned Apple shares more than once. There is no question that Warren Buffet is a masterful, and successful investor. He's been in and out of the number two position of richest men in the world for some time, and he even usurped Bill Gates for a short time one year. He made his money by making savvy investment choices over the years. He's one to follow, but Berkshire Hathaway is as much a Warren Buffet tracking stock as it is its own, stand alone family of companies. If Warren Buffet dies, or steps down, irregardless of the soundness of the underlying companies, and irregardless of standing projections of future growth and profits, all of these assumptions are factored according to the idea that Warren Buffet will be there to lead the way. The fututre performance of the company and value of the underlying stock will have to be reevaluated going forward according to the ability of someone else to fill Warren Buffet's shoes.
That same dynamic largely applies to Apple. Everything about Apple factors in the vision and enthusiasm, the creative and innovative thought processes for new gadgets and how those gadgets can be integrated into our daily lives, and entrepeneurial spirit of Steve Jobs. What investors will have to look for, going forward, is the ability of Apple to continue to dominate in its market, and to continue to be innovative and masterful in creating products that people want, and that connects consumers to nearly every aspect of their lives as Apple has been able to do in the past. If they can show that Apple can continue on without Steve Jobs, the company, and its stock, can go on as well.
So will Berkshire Hathaway go on after the departure of Warren Buffet. But this transition period to wait and see what happens next immediately after is what is important in turning the brand into a stand alone thing, without as much focus and attention on the man behind it. I think, however, because of the heavy emphasis on both accounts of the men who run these companies, that the light may never shine as bright without them, and it makes owning these stocks after the departure of the men more difficult and perhaps even less glamourous.
By the way, I wish Steve Jobs and his family, including the hard working people at Apple, all the best.