The forty percent decline in the share price of Apple stock in the last six months is illustrative of the culture of over stimulation. The precipitous decline in Apple stock is not because of the company's fundamentals. Its earnings report this Tuesday exceeded analysts' expectations, it is selling iPhones and iPads like hot cakes and it has 140 billion dollars in cash. Its share price has declined because of a so-called lack of innovation. This ludicrous refrain was, of course, joined by CNBCs Jim Kramer. A man who alternately over the last few years said Apple was headed for disaster from which it would never return (2008), and he did not see any reason this company's share price would not rise above $1500 a share (2012). Leaving aside the useful idiot puppet Jim Kramer, I think there is something more at play with Apple's share price that says more about our culture than about stock valuations.
I have heard many stock analysts say that Apple did not woo them with the announcement of a great new product release along the lines of the iPod or iPhone. And they knock Apple for only improving on products like the iPhone and iPad, instead of developing some new wow product that will knock every ones socks off. First of all, no company in the industry is innovating much right now, and secondly, what is wrong with making improvements to products already being sold. Car companies and others have been doing that for decades. We have come a long way in a short time with regards to technology and the entire industry is now improving on what has already been developed. That is not to say there are not new products in the pipeline at Apple and other companies that will make the child-like analysts pee their pants with excitement, but we will all have to wait to see those innovations. In the mean time, is it not enough for Apple, or any other company, to have a strong balance sheet with gobs of cash and products that everyone wants?
The culture of over stimulation that makes ostensibly adult people act like children on Christmas morning who only got a new fully loaded bicycle instead of a trip to the moon, can be seen not only in the undervalued share price of Apple Computer, but throughout our modern society. As a society we are so use to the spectacular, whether in movies, video games or real life events, that we constantly need greater and greater thrills to satisfy our need to be stimulated. So we no longer think it is satisfactory for a company like Apple to continuously improve their products that are gobbled up in historic volumes by a gadget-hungry public, they also have to reinvent the wheel every six months.
The culture of over stimulation is what makes many people buy ever more ridiculously larger screen TVs. Nothing is more out of place and obtrusive than a 5 foot TV screen in the average sized living room. Maybe Apple's next big new product innovation should be a way to transform your entire house into one big TV screen. Now that would give those pissy pants analysts a reason to be wowed.