NEW YORK (Real Money) -- There's an interesting blog post on the Yahoo! Finance Blog Network, by a guy named Microfundy. In it, he talks about Apple (AAPL) and its strong performance over the last 10 months or so.
He makes a couple of noteworthy points.
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1. Apple has paid out more than $100 billion through stock buybacks and dividends since it had begun its capital-return program.
2. Apple has passed $700 billion in market capitalization, but as it pays out more to shareholders, it is becoming increasingly difficult for it to raise its market cap further.
In the post, Microfundy discusses how if Apple had never started a capital-return program, its market cap would have gone over $775 billion by now.
The post made me think of how Apple has performed this year. It's up 48% for the year, as of Tuesday. That's remarkable for a company with such a high market cap.
Most people seem to attribute that performance to the capital-return program, which had preceded the run-up in the stock most recently.
I disagree, although it is an impossible argument to prove.
However, in my view, that conclusion is mixing correlation with causation. It's not the capital-return program that had made people want to buy the stock. Rather, it's the new product cycle.
The stock didn't start going up when the capital-return program was announced. It started going up when Apple had reported great earnings in April. That earnings report was a signal that a lot of people loved Apple and continued to buy its products, especially the iPhone, in droves.