Archives of “May 22, 2021” dayrss
“Few outsiders think new stores, no matter how well-conceived, will get Apple back on the hot-growth path . . . Maybe it’s time Steve Jobs stopped thinking quite so differently.” -May 21, 2001
Regular readers know I am not a big fan of predictions. Wall Street’s track record forecasting markets or economic activity is mediocre to poor; worse yet, we tend to marry forecasts once we make them rather than admit error.
So it was with great interest that I happened across the above quote. They come from commentary in (the pre-Bloomberg) BusinessWeek, published 20 years ago today (May 21, 2001). But it was not just BW, they were only one of many naysayers discussing the inevitable failure of Apple’s push into retail. Numerous armchair pontificators freely shared their uninformed opinions as to why this concept was destined to fail.
It is an excellent reminder of the type of errors we should avoid making: Operating outside of our own expertise; failing to fully appreciate current circumstances; and trying (with limited success) to extrapolate the present into the future.
Genuine groundbreaking or revolutionary products and services come along that do change the world. Whether it’s the iPhone or Bitcoin or Amazon Prime or whatever, we have a hard time conceptualizing true innovation. We can be challenged by novelty, and sometimes are made uncomfortable by what is different and unfamiliar. Once something is a success, we have a hard time recalling how life was before that product existed.
The Apple Store was clearly one of those game-changers: Pre-pandemic, Apple had over 500 stores in 25 countries. The stores were among the top-tier retailers, the fastest ever to reach a billion per year in sales; by 2012, they were doing more in sales per square foot than any other retailer. By 2017, the stores were generating $5,546 per square foot in sales, twice the dollar amount of Tiffany’s, their closest competitor. Apple no longer breaks out the specifics of its stores in its quarterly reports, but estimates of revenue across all stores is about $2.4 billion per month.
A big part of finance seems to involve making forecasts about what will happen in the future. Most people are really bad at this, for a variety of reasons: We have little awareness of our expertise or lack thereof; we do not truly understand the present, let alone the future; we often predict what we want to be true, rather than what is. And of course, the Dunning Kruger effect explains why we over-estimate our own skillsets about all of the above.
The sooner we learn what we know and work within our capabilities, the better off we will all be.
The Biden infrastructure plan
- Proposes cutting supply chain from infrastructure plan
- Proposes revising investment in broadband to $65 billion from $100 billion
- Proposes lowering roads and bridges funding to $120 billion
The most recent plan was $2.25 trillion which now has been reduced to $1.7 trillion. The GOP is at $568 million.
A source has said that the infrastructure plan is not an improvement.
NASDAQ index and S&P closes lower.
The US stock indices are closed for the week. The NASDAQ index was the weakest of the majors today. The Dow industrial average closed higher. The S&P was marginally lower:
- NASDAQ index posts first weekly gain in five weeks
- NASDAQ post the fourth negative session in five
- Dow, S&P closed lower for the second straight week
- Dow is of for the second consecutive day after three days of the declines to start the week
- The Russell 2000 of small-cap stocks also rose today
The final numbers are showing:
- S&P index -3.13 points or -0.08% at 4156.00. The low for the day reached 4151.72. The high extended to 4188.72
- NASDAQ index fell -64.75 points or -0.48% at 13470.99. The low for the day reached 13463.27. The high extended to 13616.58.
- Dow rose 123.69 points or 0.36% at 34207.84. The low for the day reached 34121.91. The high was up a 34415.48
For the week, the the Dow was the biggest loser -0.51%. The NASDAQ gained at 0.31%. Below are the % changes of some of the major indices around the globe. Canada’s S&P/TSX index was the biggest gain or at 0.91%. The Dow was the biggest decliner for the week.