22 thoughts on “The Outsider: Why this top Apple analyst is different”

  1. One of my favorite quotes is from the British mystery series “Touch of Frost” in which Inspector Frost tells a young constable that “… it’s better to be out of step because you tread on the bits that other people miss.”

    Again, as Horace points out, it’s in plain sight, but missed — follow the leader, conventional thinking, tribal alliances. He constantly reminds us of that.

  2. One of Horace’s best recent posts featured an exegesis of Apple quarterly reports over time to deduce how much they’re spending to open each retail store. Horace proves that thoughtful, intelligent analysis is at least as valuable as inside info, if not more.

    1. Agreed and that is one of the reasons why I like reading him and spend time trying to go to his site pretty much everyday. It shows what can be done if there was enough time.

  3. Some of his posts are useful, such as those on the cost of store openings or using capex as a revenue guide. But, mostly he beats the same horse of how undervalued apple is, hardly a unique insight.

    1. I’ve written 994 posts in the last 20 months or so. 181 are tagged as Financial though I’d venture that even though they mostly review Apple financials the stock price is discussed in fewer than 10% or about 18 posts.

  4. Occasionally he has a unique post, such as the cost of store openings. But he mostly beats the same horse of how undervalued apple is. That is hardly a unique perspective.

  5. He’s one of Apple’s biggest cheerleaders along with Andy Zaky. 300,000 people read his blog but probably none of those readers have any money to invest in Apple and probably none are hedge fund managers. Dediu never reaches the people that actually matter. The more cheerleading he does, the flatter Apple’share price is. I’ll admit he does some fancy graphing, and works Apple numbers in some wondrous ways, but it really doesn’t mean anything to shareholders who are holding on to a stock that doesn’t move and isn’t even close to moving in the ways he claims it could. If he shut down his site tomorrow it wouldn’t change a thing for Apple and shareholders.

    Apple shares will still be outperformed by the likes of Google, Amazon and IBM. Those things just never change. Those stocks don’t require cheerleaders like Apple has. A company either rewards its shareholders every quarter or it doesn’t. Getting investors hopes up only to be disappointed by reality isn’t a good thing to do at all.

    1. Horace’s posts are factually based and linked to by many others (bulls and bears) – he may seem like a cheer-leader if that’s how you define someone who is distilling information in a manner that is more compelling than others rather than predicting doom and gloom despite the performance. His work on analysis of RIM, Microsoft and Nokia is original so its not solely information about Apple. As for stock performance, I’ve been more than happy with my AAPL holdings, but I’m not a short term investor. I’m sure many other stocks will outperform AAPL – partly because most investors don’t understand the company. That’s a problem since investor intelligence is one thing AAPL itself can’t influence. Horace’s performance has been far more consistent, original and accurate than most so-called professional analysts……

      1. Canucker

        Well said. I think the facts speak for themselves. Horace is pretty spot on and if you read him all the time you know that cheerleading label is uncalled for.

    2. Are you sure GOOG, AMZN and IBM outperform APPL? Here is a posted weekly opening for 2011, 2010 and 2005. I can go all the way back to the IPO’s for any of these if you like and provide splits, etc…

      2011 2010 2005 current
      appl 325.90 390.82 211.72 32.39
      goog 596.48 629.82 621.66 197.40
      amzn 181.37 181.33 139.75 44.95
      ibm 147.21 185.69 131.18 98.97

    3. Steffen

      While you are entitled to your opinions, I wonder how can you talk with the surety that none of his readers have any money or not professional money managers. I think you are making arguments with little or no basis in reality. As for other stocks outperforming Apple in the future, I digress.

    4. What is your foundation for the claim that AAPL is underperforming? It has suffered multiple compression despite accelerating earnings, but it has still grown tremendously. Other than a slight beat by IBM this year and a slight beat by AMZN over the past 5 years, AAPL soundly defeats ALL THREE of these companies on 1,2,3,4,5, and 10 year historical returns.

    5. You’re totally off base with the performance. I know it seems like AAPL should be doing even better than it is, given the multiple compression. But it has done remarkably well over any relevant time horizon. I compared AAPL with AMZN, GOOG, and IBM over 1,2,3,4,5, and 10 year horizons. Guess what – Apple wins against ALL THREE in almost every time horizon. The only exceptions are slight nudges by IBM this year and AMZN over the 5 year horizon. Otherwise it’s a clean sweep, mostly in convincing fashion.

      @OM I have the table if you’d like. I don’t know how to post images to your site.

  6. What I like about Horace is that a) he’s modest and b) he strives to find facts and builds arguments based on these facts, c) he doesn’t engage in unsupported opinions and hyperbole and d) he is not afraid of being wrong and admits it when he is. These personality characteristics are rarely found in bloggers, blog commentators or “analysts” in my experience. I wish I had his level of integrity.

  7. He is also on a podcast called Critical Path where he talks about a lot of the same topics as his blog. Definitely worth checking out

  8. Nice article and quotes.

    I like that Horace lays out his methodology (or his thinking) when he makes statements. And if you don’t agree with it, post a comment on the relevant blog post, and you can debate it with him. Also, he doesn’t seem to worry about being wrong. I think that’s the perfect analyst.

  9. Typical GigaOM. There are good analysts and bad analysts and here is a good analyst. Sorry but step back – what role do analysts play? Why do they provide analysis for free?
    What is in it for them?

  10. Horace is not a typical analyst as he doesn’t work for a securities firm. As we know with what happened to Henry Blodget back when he worked as a securities analyst, those analysts who work for securities firms can have a major conflict which clouds their judgment. Horace is independent and it appears that he provides his analysis so that he can have a successful blog (and maybe ads) and maybe to fuel his speaking engagements, etc. I would rather listen to that kind of analysts than the traditional one working for a securities firm. P.S., like Horace, I too attended Tufts.

  11. Om,

    You’re far too kind to Steffen Jobs, whose chosen avatar says it all: “I’m a jackass!” Horace does an amazing job, I look forward to each of his insightful, well-crafted posts. (And, yes, I’m a stock holder.)

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