This Day On The Street
Continue to site
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

Apple's Collapse: A Scholarly Perspective

...During the first decade of the 21st century, Apple was an exception to the rule of the financialized corporation in the United States. Now, it seems, it is not.

NEW YORK ( TheStreet) -- Over the long weekend, I did one of the things I miss most about being a graduate student. I rediscovered there's no good reason why a PhD dropout can't read academic literature as often today as he did when he was knee-deep in academia.

In fact, financial media needs more journalists who, on some level, marry popular and academic approaches or, at the very least, add rigor to their own work by consulting scholarly research. What passes for "research" on Wall Street -- data sprung from convenience samples drawn by half-cocked analysts such as BTIG's Rich Greenfield -- wouldn't make it past the most lenient journal referee without the necessary author admissions, explanations and disclaimers.

Seeking an elevated level of rigor matters even more as the conversation around battleground companies and stocks such as Apple (AAPL - Get Report) continues to devolve.

In this article, I summarize and discuss Apple's Changing Business Model: What Should the World's Richest Company Do with All Those Profits by University of Massachusetts-Lowell professor William Lazonick, University of Sussex professor Mariana Mazzucato and research associate at UMass-Lowell's Center for Industrial Competitiveness Öner Tulum. Their article is forthcoming in Accounting Forum, but available now at The Academic-Industry Research Network's Web site.

Throughout this article, portions of their work appear in italicized block quotes.

I do my best to relay the academic argument in key, sometimes lengthy excerpts, but, as is the case with most popular media portrayals of academic work, I can't help but fall short. You really need to read the entire paper.

First, because it's fantastic. Second, because it provides so much necessary context that I had no choice but to leave out, from historical support to the authors' theoretical framework to a useful list of references.

And third, because the work comes from academics, not journalists, it might just get through to even the most ardent AAPL bulls. These are the people, particularly the company's CEO, who continue to desecrate Steve Jobs's legacy.

Chide the ivory tower all you want, but you can't accuse professors of creating "click bait" to generate "page views." Academics aren't in the business of getting page views. A very small number do and an even smaller segment make real money off of any unusual mass exposure.

On Page Two, I summarize the core of the authors' main points.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr 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

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
CSCO $27.49 0.00%
INTC $30.28 0.00%
MSFT $49.87 0.00%
FB $117.58 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs