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. Follow @RobertWeinstein
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