I’m in Hawaii at the moment, taking a little vacation after my recent stay in New Zealand (details on all of that coming soon), so today will be a short one.
There’s been a lot of buzz lately about how Jeff Bezos’ net worth now exceeds $100 billion, making him the the richest man in the world (at least of the documented ones; Putin or some Arab prince may well be worth much more than that).
But you know what? That doesn’t mean shit. The news just came out that in the last three months, Apple has made more money in profit, not revenue mind you, but actual profit, than Amazon has ever made in its entire existence. Apple made $13.8 billion in net income during the March 2018 quarter, while Amazon’s total net income since inception is $9.6 billion. Holy hell.
Warren Buffett said:
Apple is an unbelievable company. If you look at Apple, I think it earns almost twice as much as the second most profitable company in the United States.
He’s right. As far as I know, number two in the US is Exxon Mobil. They “only” made $19 billion in profit last year while Apple did $48 billion. That’s amazingly impressive, particularly when you factor in how Exxon Mobil is a highly corporatist entity, getting billions in free cash (either directly or indirectly) from you, the taxpayer. (Apple is corporatist as well, of course. Most huge American corporations are since capitalism at that level no longer exists, but it’s not nearly as bad as Exxon Mobil.)
On top of this, Apple holds an amazing cash horde of $268 billion(!). Most of this is held offshore (smart of them; I would do the same). This would make Smaug’s treasure horde look like a piggy bank.
We are truly entering into an era of megacorporations, just like sci-fi predicted. It will be interesting to see how these megacorps survive or mutate after the slow collapse of the West. Will they collapse too? Or will they take over? Or will something else happen? I really don’t know, but the sheer amount of money being generated by corporate entities like Apple truly staggers the imagination.
Want over 35 hours of how-to podcasts on how to improve your woman life and financial life? Want to be able to coach with me twice a month? Want access to hours of technique-based video and audio? The SMIC Program is a monthly podcast and coaching program where you get access to massive amounts of exclusive, members-only Alpha 2.0 content as soon as you sign up, and you can cancel whenever you want. Click here for the details.
I couldn’t agree more. Legally Apple or any corporation or even individuals are allowed to do this. I would do the same. Ethically & morally it maybe wrong but legally it is not.
Not only will they survive, but they’ll transform into something even worse: Megacorporations COMBINED with government. The US will be pretty much EXACTLY like the USSR going into the 2040s lol, only the government will be much MUCH bigger and more complex. Instead of the democrat and republican parties we’ll have the Apple and Android parties haha.
Something else like the government actually enforcing its anti-trust laws? Seeing Google, Apple, Facebook, Amazon, and for that matter, Disney broken up would be one hell of a thing.
Sorry to be nitpicking, but if I have $1 million in my bank account and I owe half a million to creditors, do I have a $1 million cash hoard?
Apple’s net cash is $168 billion becase they owe around $100 billion. Still a lot of cash, sure, just making sure we get the concepts right. It’s important. You start mistaking cash for net cash and end up buying Tesla and its ever growing negative cash flows at a higher valuation than Ford, like many have done. 🙂
What companies like Apple are doing with the cash abroad speaks volumes about the decadence of the West. Like Bush II’s tax cuts in 2004, these tax-cut profits will be used for buybacks mainly (terrible idea, by the way, with how expensive the stock market is). Already there are headlines about 2018 totalling the largest amount in buybacks in history by a large margin. Productive use of capital? This ain’t no place for that.
Wow thank you! Thats epic.
It’s not nitpicking at all, and it’s a relevant point I was not aware of. You’re absolutely correct; if they’re in debt $100 billion than their “cash” is really $168 billion.
Still a staggering amount of cash though.
When the banks fail, will apple’s $268 billion be taken above the measly deposit insurance amount? Or will it simply disappear into hyper inflation oblivion?
If I were advising apple, I’d say since you are larger than most countries, raise an army to protect yourself from gov’ts that would take from you. Imagine apple on some island protected by multiple layers of high tech military gear.
So, the obvious question: is ti still smart to buy apple stock now?
Ever seen idiocracy where “Brawndo” bought the FDA as well as the rest of the US?
That’s Apple when the US / West collapses.
Brawndo, it’s got electrolytes!
I fucking Envy Apple, their literally TBTFW To Big To Fuck With.
Is it fair to compare Amazon and Apple like that? I haven’t looked into the details, but Amazon and Tesla is priced that high because they’re spending their money into growing instead, while the other companies are growing at a slower rate.
The fortunes of these big companies can switch around. There were many huge companies who went into oblivion in the past. Reputation and cash reserves are one thing but mismanagement and failure to keep up with the relevant market can turn that into oblivion.
It will be very interesting to watch what will be the fate of google and facebook since china is on the rise and the usa is collapsing and these companies are banned in china. If China will be a future world leader and they already are banning big corporations effectively then being a big company with lots of cash might mean little if they can be just be banned. Google and Facebook have lots of money too but it doesnt seem to stop China from banning them.
If were were talking $12 billion vs $15 billion, then no. But $19 billion vs. $48 billion? Yes.
Stock prices are all bullshit right now; overinflated. Ignore them. I’m talking about actual annual profit, not stock price.
Really novel because I find amazon to be more novel than apple (those return cubbies blow me away) but let me guess…apples mastered their sales and hedgehog concept right???!!! Aka their unique laptop and computers/brand?
The business model of Amazon is NOT to make profit, but to win market share by swallowing more and more retail niches with unbeatable prices. This “no profit, but market share”-strategy means Amazon does not have to pay taxes. This is a huge benefit for Amazon shareholders.
Apple and some other companies can also lessen their tax burden close to zero – and have done so – but only with elaborate offshore corporate structures, shell companies etc. Amazon could turn the knob and make profit, if they wanted to. Their growth would slow down, though.
None of this deducts from Apple’s stellar performance, but Amazon’s strategy is less vulnerable when governments start going after tax dodging companies.
Amazon invested all the profits into building a huge world wide distribution network that nobody can compete with. And on top of that they basically made losses to make products cheaper taking out competitors in the process.