This Day On The Street
Continue to site right-arrow
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

Apple's Core Is Solid, Even With Bruised Skin

Stocks in this article: AAPL NOK BBRY

My good friend and The Street writer Rocco Pendola recently wrote an article that called into question the tactics of Apple CEO Tim Cook for issuing the apology. Pendola is no fan of Cook or his management methods, but under Cook, Apple has reported record profits and revenue not only for Apple, but for any company.

Similar to others, Pendola doesn't see the positive that will come from Apple's actions because he hasn't spent the amount of time I have in Asia, in general, and China, in particular. For me, this appears to be an easy and a cost-effective one at that. But let's look at the situation in another light.

Imagine you're a guest in someone's home with different cultural beliefs. Now imagine your hosts are Chinese, and you're American. After finishing dinner, it's not uncommon for Chinese or Americans to use a toothpick; however, the manner in which it is used is quite different.

As an American, you probably won't make an effort to cover your mouth with the hand that is not holding the toothpick, because, in American culture, it's not necessary. The Chinese hosts, on the other hand, won't profoundly appreciate it.

While using the toothpick, your friend leans over and quietly informs you of your "offense." You now have a few choices. You can have the attitude that you're an American, and you should be able to do what you believe is within your social manners. After all, you're the guest. You obviously risk the chance that you won't be invited again.

Another option is to conform to what is expected in their home, or third, you can apologize while conforming to the norms. Apple wisely understood that regardless if it believes it did something wrong, it's the hosts that decide if Apple gets "invited back for dinner or not."

It's obvious, or should be obvious, for Apple shareholders that you want Apple to be invited back to dinner. China has one of the biggest dinner tables, and if you believe the market was hard on Apple for issuing an apology, can you imagine the market punishment for inaction and loss of sales and or market share?

The fallacy of the market always being right might hold water for short-term traders, but for long term investors, it's the exact opposite. The market is usually wrong, either too much irrational exuberance, or too many double helpings of pessimism drive share prices.

As an investor, you must look past the headline and find the value that others are passing by. Trading on Target by Adrienne Toghraie from Wiley Trading is a fabulous resource to learn more about investing based on goals, not emotion.

Apple currently finds itself in the Wall Street bargain bin. (Still, Canaccord analyst T. Michael Walkley this week raised earnings estimates on Apple due to stronger iPhone 4 and iPhone 4S sales.) Those who enjoy buying an item worth $10 for only $5 are thankful. They know it's only a matter of time before others see the value.

Disclosure: The author doesn't hold a position in any stock mentioned.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

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