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Jim Cramer's Best Blogs

Second, that lack of acknowledgement thus failed to break the free fall in the company's stock. If you think your sole job is to build the best products available, then you shouldn't care about the stock -- as long as you build the best products available. Much of the selling is coming from people who believe other companies are now building equally good products that they're selling more cheaply vs. Apple.

That means either Apple has to bring down the price point of its products -- which is going to lead to a decline in gross margins and a decline in sales -- or it has to come up with a new product we haven't thought of. The product would have to be capable of producing an acceleration in sales and an attendant acceleration in gross margin in the out years.

Others thought, correctly, that I believe Apple will announce some sort of plan for its $128 per share in cash. That, again, would require thoughts about the stock, and they are top of mind.

Now, you could argue that all of this is binary. You could say that, if you care about the quality of the products then you can't care about the stock -- that the stock has to sort itself out eventually before it goes higher.

That would be terrific if it were the case. But stocks don't play by product rules. There is an etiquette involved that forces most management teams to play by the rules, and give you hope that the stock's trajectory -- as clearly seen by flashing numbers postearnings -- is wrong. But Apple's smug confidence made you feel the trajectory is right. If they don't want to get us to buy the stock by acknowledging that free fall, then why should we? We have plenty of management teams who care about product and stock and who will address the slowing phenomena.

Put simply, I believe Apple is overshooting its fair-value trading through apples-to-apples comparisons with such names as Intel (INTC) or Microsoft (MSFT). But those companies are doing lots to stabilize their respective stock prices, such as paying out good dividends and implementing fulsome buybacks. One has to ask: What exactly is Apple's excuse for not playing by the rules? Arrogance, alas, is not an answer.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long AAPL.

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