This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Einhorn's a Hustler and He Doesn't Understand Or Care About Apple

Stock quotes in this article: AAPL, INTC, MSFT, HPQ, RIMM, DELL, BBRY

NEW YORK ( TheStreet) -- A few months ago, David Einhorn made news by telling us that he understands Apple (AAPL).

At the time, I told you Einhorn was the one who didn't understand Apple. While it sounds cool to assorted hipsters and a handful of tortured tech geeks, his line about Apple being a software company -- not a hardware company -- made no practical sense whatsoever. And the contention certainly doesn't qualify as a deep theoretical or philosophical thought that mere mortals cannot wrap their inferior heads around.

Einhorn's Thursday morning dog and pony show about preferred stock and capital allocation put it all to rest. It's official. He really doesn't understand Apple. In fact, he has absolutely no clue.

Let's make a few things clear though.

First, Einhorn is loaded. He's rich because he's a great investor. That's his thing -- to maximize his investments. That's his objective here. It wouldn't make a difference to him if Apple fell off of the face of the Earth in six months. As long as he squeezed as much juice as he could out of his position, it's all good. He'll move onto the next position.

Don't get me wrong. That's acceptable. Totally cool. It's just unfortunate that we take a guy who we know approaches things from that type of perspective seriously when he tries making sense about Apple.

Second, Einhorn has more money than most of us, but that doesn't mean he's smarter than most of us. Don't be intimated by these cats. There's no reason to be.

Third, Apple apologized. Apple didn't need to apologize. Here's hoping the apology was a classic Apple blow off and not a preview of Apple letting others dictate its flow.


Apple doesn't have to answer to anybody. Not about innovation. Not about how it allocates its capital. And certainly not about how much of that cash it returns to shareholders. You don't like the company's strategy, buy another stock. I hear Intel (INTC) looks pretty "cheap" right now with a "juicy" 4.2% yield. Heck, Microsoft (MSFT) and Hewlett Packard (HPQ) -- they're doing some real exciting stuff. And they're both "bargains," yielding 3.3% and 3.2%, respectively.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,757.63 -47.08 -0.28%
S&P 500 1,943.52 -2.64 -0.14%
NASDAQ 4,417.2030 -4.8820 -0.11%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs