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Wall Street: Software More Valuable Than Oil
CWmike writes "The tech industry's answer to this week's stock market roller coaster was delivered on Tuesday by the mighty Apple Inc. Apple saw its stock price rise enough — gaining more than 5% — to briefly surpass Exxon Mobil as the most valuable company in the U.S., according to an AP analysis of its market cap. (Exxon Mobile wound up the day slightly ahead of Apple.) Most of the other major tech companies — including Intel, IBM, Dell, Microsoft and Hewlett-Packard — all finished in positive territory yesterday, as markets made up ground lost in the big sell-off on Monday that also hit oil prices and other commodities.Tuesday's rally may be all that's needed to shake away, at least temporarily, some of the economic concerns the IT industry still faces. By closing in on Exxon, Apple effectively affirmed that there are few limits to tech growth. CW blogger Jonny Evans posits that ideas are why Apple beats Exxon on market cap, noting, 'While Exxon drills, hammers and crushes its way to find its billions, Apple's mind-miners explore myriad complexities to develop and understand new technologies.'"
Look, Apple closed above Exxon today but that doesn't make software worth more than oil. Oil is a finite resource and has price fluctuations like many other commodities. There is an endless supply of coders to spew out software.
Now, good software may be worth more than oil, but I don't think there's enough of it around to really turn it into a commodity.
Bizarre coinages aside, Wall Street wasn't making a comparative pronouncement on the value of software and oil(pro-tip: without oil, the market for shiny consumer goods would skew heavily toward the 'canned' variety...); but on the relative value of a company with substantial ability to pull margins that its peers cannot, vs. a company with a smaller ability to do that.
Now, carry on. It's the "information age" or somesuch...
This is ridiculous !
Without oil we have no modern civilization. Even if you could somehow replace all the energy produce from oil, you will still need it for: pharmaceuticals, cosmetics, plastics and others various organics chemicals. The modern world depends on oil even more than it dose on software.
Jehovah be praised, Oracle was not selected
Market essentially washed away what it gained back yesterday, and Apple did end up on top today, FWIW.
"Apple Overtakes Exxon to Become Most Valuable"
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depending on job you can work from home without gas (yea for nuclear power),
So yeah it is possible he can understand.
me I am in sales, I can do about a 1/3 of my responsibilities with a laptop, net connection and cell phone.
i thought once I was found, but it was only a dream.
"Apple's mind-miners explore myriad complexities to develop and understand new technologies."
Apple isn't NASA in the 60's, it's a manufacturer of shiny gadgets. They don't even have a research division.
Apple profits because people are vain, and are willing to accrue massive amounts of debt to buy pretty things.
*barf*
These are the people who in days gone by would read tea leaves.
Without a high-energy society, there is no Apple. Without plastics, there are many missing parts. Without diesel powered container cargo vessels, you must make your products locally for much more money. Without energy intensive semiconductor fab, there is no product. Without electricity the product is not powered. Most importantly, without high-energy freeing up labor, nobody can afford your device. They would be too busy plowing fields with draft horses.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
Nah, gas goes up when demand goes up. As the market plunges, oil has actually declined because a US in a recession consumes less oil than a US with a strong, healthy economy. But oil doesn't need excuses - as China and the rest of the world continues to grow, so does non-US demand. And since the population of the US is actually rather small when compared to, say, China, the US economy will become less and less relevant to the price of oil.
Of course in any slide there's always a bounce because those who are short need to take profits at one point or another. Right now we're at around $81/bbl and yesterday we were in the high 70's. So it's bouncing at the moment. I wouldn't expect $100+ oil in the near future though. Oil should decline too until the slack in demand is picked up by the rest of the world. Of course violence (especially in the middle east) could change that overnight.
Seven puppies were harmed during the making of this post.
Apple's mind-miners explore myriad complexities to develop and understand new technologies.
"New" technologies? What exactly has Apple invented here, apart from an OS taken from unix, applications written at no cost to Apple because they were done by others, touch screen technology that's been around on PDA's for almost 15 years, etc. Yeah they put it into a good looking package and built a good brand and marketed the crap out of it, but there's nothing exactly "cutting edge" here except for maybe the gross violation of your rights when they make you sign exclusivity contracts with third party cell phone providers.
Now, guess which company is more important. A company that obtains and produces a (relatively) cheap source of energy, or a company that produces a marginally different but very shiny communications/computing device?
Apple is fantastically over-valued and overbought, as anyone holding $400 Apple stock will tell you. I can just imagine the pain of the people who have been stopped out. Well what did you expect when you were buying the stock? Largest market cap != biggest money maker. Amazing revenue growth rates have to make you wonder how sustainable they are over the medium and long term. The bigger they are, the harder they fall. Me, I will cover my shorts at $280 and re-assess.
Seven puppies were harmed during the making of this post.
um.... working from home is fine, but how do you expect to get food to the grocer?
Yea, and what about the other 2/3rds? You think you're boss is going to understand that part not getting done?
You are CLEARLY in sales based on your statements. You think its perfectly acceptable to deliver a product that only does a 1/3rd what you claim it does.
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
what countries are we going to invade for software now?
This assumes it's an overinflated bubble now, and there are very few indications that it is. Given that it's P/E ratio isn't particularly out of line with other similar companies, there's not a lot to suggest that its value is heavily over-inflated at present - they make a metric shit-ton of money (and profit) on all those devices, and they've been selling more, and more, and more of them quarter over quarter and year over year.
Now, Steve Jobs stepping down / dying would certainly be a psychological shock, but there's not a lot to indicate that the market would be fundamentally left adrift by that happening - they have a solid line of products, they no doubt have several years of future revisions mapped out, probably several product ideas in the pipeline, and strong leadership still - all fundamentally good things for a company. I expect the stock will take a hit when he does step down (or pass away), but I suspect that will be fundamentally a self-correcting jitter.
You won't see the price truly take a lasting hit until one or more of the following becomes true:
1) Apple's margins start getting eaten into by competing products; so far, doesn't look like that's happening - Macs still make good profits-per-unit, and all estimates of iPod, iPad and iPhone costs also suggest high margins;
2) Apple's sales volume drops significantly, and for several quarters in a row; so far, doesn't look like that's happening, with quarterly increases and year-over-year increases for several years running now;
3) Apple's products reach a saturation point ("everybody who wants an iPad, iPhone, iPod, or Mac has one"), and it becomes apparent that they have no additional product ideas - new lines, or new models of existing lines - in their pipeline; Too early to tell if that's the case, but I suspect they have a few more tricks up their corporate sleeve.
An iPad will get you through times of no oil better than oil will get you through times of no iPad.
Not if we're talking about baby oil.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Yeah, what this economy needs direly is another bubble.
Could we, I dunno, ya know, build stuff, sell that and value companies based on what gets made and sold? I know, a completely outlandish concept, but I'm nuts enough that I really want to see this being tried.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
This also shows that Apple is more valuable than air. After all, air is free!
Uh, yeah. The idea that price equals value is dangerous ideological mumbo-jumbo. Prices tell what something costs to buy. They do not indicate what it is worth to have. This is why political economists (particularly Marxist ones these days) distinguish between use value and exchange value.
Examples of market prices failing to reflect use values are too numerous to count. Fancy clothes and cars vs basic food, for example, or the most valuable things in life - such as love, meaning in life, and human kindness - that are only available for free.
And the funny thing is, if you DO find oil in your backyard, you'll find that most urban property owners don't actually have mineral rights to their property.
By any unit of measure, even Windows 1.0 and Clippy are more valuable than gold.
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- - You can't take something off the Internet! That's like trying to take pee out of a swimming pool.
Apple profit: $5.5 billion
Exxon profit: $US5.5bn in the second quarter.
hmmm...
so you're saying get our petrochemical products by liquifying baby humans?
worth a study
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it