For all the great advances that we have made in the world, whether it be progress in technology, evaluation of financial markets, social policy, and other areas of society, there are still some things that just boggle my mind. In some cases, these things are "ironic", in other cases, one could argue that they are "moronic". Here's a few thoughts to chew on - "Ironic" or "Moronic"?

  • The Defunct Steel Mill: In a 90-day period engulfed with one of the most challenging currency environments in recent memory, AAPL (the most valuable company in the world) produced $75.9 billion in revenue, sold 74.8 million smartphones at $691 per-phone, generated the highest quarterly profit ever ($18.4 billion), minted $305 million per-day in operating cash flow...and is still valued as a "steel mill on its way out of business". My take: Moronic.
     
  • You Can't Monetize Ubiquity: On the other hand, GOOG is lauded for its mobile operating system called Android (the most popular in the world by-far), but according to court testimony, the platform has ONLY generated $31 billion since its inception in 2008. Meanwhile, AAPL generated $175 billion from its smartphone business (phones + services) in its past fiscal year (FYE Sept-2015), and $58 billion in the last quarter (FQ Dec-2015). Hmmmm... My take: Both - Ironic that such a massive platform like Android brings in so little money (we all knew it was small - just not THAT small); Moronic that the market doesn't recognize that fact.
     
  • Valuations: In the holiday quarter, AAPL reported a profit ($18.4 billion) that was 38x that of AMZN's reported profits ($482 million), yet AAPL trades at a Price-to-Earnings (P/E) multiple of 10.2, while AMZN trades at a P/E multiple of 427.9 (43x that of AAPL). So in short, AAPL generates 38x more profit than AMZN (Q4-15 was actually one of AMZN's most profitable quarters), yet is valued 43x less (on a valuation multiple basis).

    Who has the Monopoly?: So you can justify that by saying AMZN is a monopoly and reinvests all of its profits back in its business, right?  Well, it was reported in Nov-15 that AAPL captured 94% of the profits of the enormous smartphone market while only shipping 14.5% of the total volume. I don't think AMZN is capturing 94% of profits in any of its business segments and I would bet its market share far exceeds 14.5% in most of its core business lines.  Even true monopolies don't have 94% profit share! So even if AAPL loses profit share, its gross profit in terms of total dollars (a function of market share) still has some runway - even in the smaller market for premium handsets (>$500). My take: Moronic.
     
  • Cable Service: I can get car service in 2-minutes with the touch of a screen, food delivered in 10 - 15 minutes with an app, yet if I need my cable fixed, I am told that a service technician will arrive anywhere between 8AM and 4PM. My take: Moronic.
     
  • Let Me Pull a "Fast One" on You (Maybe): Taxi drivers still think the "cash-only, let me take you on a tour of the city" tactics are going to work with far-more sophisticated consumers that can simply use an app like Waze to tell them exactly how long it should take to get somewhere (traffic, accidents, etc. - all included in the estimate). My take: Moronic.
     
  • Can You Explain it to a 10-Year Old? Business executives throw around terms like IoTBlockchainExponentials & Big Data (just to name a few) like they're going out of style. But my guess is that 80% of them (conservatively-speaking) could not explain to a 10-year old what those terms mean, why they're important, how they're going to shape the future, and most importantly, how they'll leverage them for profit & shareholder valueMy take: Ironic.
     
  • A "Natural" Sponsor: Amgen was one of the original developers of a synthetic form of Erythropoietin, aka EPO, a hormone used to create a drug that stimulates red blood cell production to treat anemia. EPO became the Performance-Enhancing Drug (PED) of choice for endurance athletes - mainly cyclists and most notably, Lance Armstrong. Get this: Amgen has been the title sponsor for America's largest cycling race, the Amgen Tour of California, since its inaugural race in 2006. My take: Ironic.
     
  • YHOO - 3 ironies:
    • YHOO owns a 16.3% stake (384 million shares) in China's BABA, equating to a "pre-tax" value of $27.2 billion; YHOO's market cap is about $28.4 billion, and it employs over 10,000 people. So essentially, the market is valuing YHOO (ex-BABA) and the work of its 10,000 employs at a mere $1.2 billionMy take: Moronic (if YHOO is merely a holding company for BABA stock, as the market appears to believe, why the need for 10,000 employees?)
       
    • YHOO bought a 40% stake in BABA in 2005 for just $1 billion - had it held on to that investment in-full, it would be worth approximately $66 billion today, about 132% more than the market currently values the entire company. My take: Neutral.
       
    • While many believe YHOO has mismanaged its own finances and strategy, its most lucrative platform is no other than Yahoo! Finance, which is said to command the highest ad prices of any of its other platforms. My take: Ironic.
       
  • We Can Do Your Taxes, But Our Own...? H&R Block, the largest provider of consumer tax preparation services in the world, announced in 2006 that it had failed to correctly calculate its own state income taxes and owed over $30 million in back taxes. My take: Ironic.
     
  • AAPL investments - 2 big-time divestitures:
    • Upon his return to AAPL, one of Jobs' first priorities was to stabilize the company. One way he did that was by securing a $150 million investment by MSFT in 1997 - in the form of non-voting preferred convertible stock. It was a paltry amount for the software giant and was seen by many as another tactic to keep anti-trust regulators off of MSFT's back (Keep AAPL alive - there's still competition!). Those shares eventually converted to common stock (253 million shares by most estimates - split-adjusted). Ballmer unloaded the entire position by 2003. Even at today's "depressed prices", that stake would be worth ~$24.3 billion - about 6% of MSFT's market value. My take: Moronic.
       
    • The 'silent' 3rd founder of AAPL, Ron Wayne, received a 10% equity stake in the company in April-1976, but sold it back for $800 less than two-weeks later. Today, a 10% stake in AAPL would be worth $52.2 billion. Today, that net worth would make him the 3rd wealthiest American today, and would far exceed the $19.1 billion that Jobs' estate is valued at (now controlled by his widow). After he left AAPL, Wayne was a stamp and coin dealer who never owned an AAPL product until he was gifted an iPad 2 in 2011. To his defense, nobody knew what AAPL would become in 1997, let alone 1976. My take: Neutral.
       
  • "Naw, we'll pass": Blockbuster, the now-defunct movie rental retailer, was effectively 'disrupted' and bankrupted by a company (Netflix) that it was offered, and decided against, buying for $50 million in 2000My take: Moronic.
     
  • We Really Know Irregularities: Huron Consulting, a mid-size, publicly-traded consultancy borne out of the collapse of Andersen (related to Enron's 'creative accounting'), announced in 2009 that it had significant "accounting irregularities" requiring a restatement of 3-years of its financial statements - its stock dropped 70% upon the announcement. My take: Ironic.
     
  • A Holy Sinful War: In college football, the rivalry between Utah and BYU is known as the "Holy War". In December-2015, the teams played the "Holy War" in Las Vegas (of all places). LOL. My take: Ironic.
     
  • Ghost Dating: Investment bankers from 'prominent firms' used "ghost names and email addresses" to engage with other traders on popular finance blog sites, but used their corporate email addresses to register with Ashley Madison's "service". My take: Moronic.