The day Fred Wilson dumped AAPL | Hacker News Reader

The day Fred Wilson dumped AAPL

tech.fortune.cnn.com

18 pointsrmah11 comments

I don't like the tone of the article. They include a chart which seems to indicate "Fred Wilson is an idiot", but if you read Wilson's blog his decision had nothing to do with him being bearish on Apple's growth potential. It had nothing to do with iPhone vs. Android. It was because Apple was not being forward with investors about Jobs. That's a legit reason to pull out of company, regardless of how things have played out since. The article acknowledges this to a degree but has an overall tone of "Fred Wilson failed".

Fred Wilson is an investor and investors are expected to have at least somewhat of an understanding of a company's outlook and make investments accordingly (although Fred invests in private, not public, companies). As such, it's his job to invest based on fundamentals and deliver solid returns for his portfolio. Apple not being forward with investors about Jobs turned out to not be a good reason to dump the stock. Apple has never been very open about anything - that is the culture of the company and it's no secret (no pun). Twitter hasn't been very forthcoming with people who develop for it's platform - having abandoned a chunk of them recently. Not to mention there's been a lot of shuffling in management. Will Fred dump his holdings in Twitter?

Why would Fred dump his holding in Twitter? I'm sure Twitter are incredibly open with Fred about their financials and future plans. Fred's beef was with being a shareholder and not getting that information.

I don't buy it. Fred's a smart man - he knows with a company the size and scope of Apple releasing certain information will only feed competitors and fuel speculation. Steve Jobs said he was taking a medical leave of absence because his health issues are more complex than he thought. That's enough information. What is Fred looking for, biopsy reports?

The SEC rules are pretty vague, so it's hard to say how much is enough information. They did ask Apple for more information though, which lends me to believe that they're more on the "disclosure is better" side. Apple's board of directors was also not amused by Jobs' policy of not disclosing his medical issues (Jerry York told the WSJ that he almost resigned after hearing the news but didn't so as to not contribute to the media drama).

Wilson put his money into other companies and his portfolio is still strong (according to him). His job isn't to pursue a particular investment strategy but to weigh risk/reward and to stick with what he knows. He's said in the past that he wouldn't have invested in GroupOn, for example, because it's not what he knows.

Do you think there is anything wrong with a system that places profits and dividends over transparency and principles? Didn't Fred make his move because he felt that what Apple was doing was wrong and that bothered him? And so you are saying that, since he is "an investor," it's his job to put aside right and wrong and focus only on returns?

Fred argues for an "open" platform, but I guess that "openess" doesn't apply to Twitter. So much for principles.

As such, it's his job to invest based on fundamentals and deliver solid returns for his portfolio. Apple not being forward with investors about Jobs turned out to not be a good reason to dump the stock.

That's only true if you think fundamentals are only about short term return on investment. But if you think fundamentals include risk-adjusted returns, then his decision may be perfectly sound. Dishonest companies are risky investments; even if they have great returns, they may have awful returns after adjusting for the increased risks associated with an untrustworthy company.

I agree with you on the tone but I think that's obscuring the real point behind the article which is Fred Wilson's advice to developers. The article is trying to discredit that advice (which was to develop for Android first). It uses his stock sale to demonstrate a pattern of behavior in which Mr. Wilson demonstrates a bias against Apple because of their secrecy. The article's point is that Apple has continued to succeed despite its secrecy so he was wrong to use that as a reason to dislike the company. Hence they believe his advice shouldn't be followed.

That doesn't mean he was wrong or failed on a personal level or as an investor.

Context: John Gruber mentioned this in a tongue-in-cheek sidenote in The Talkshow podcast last night. (~"Take Wilson's Apple analyses with a grain of salt".)

This guy is just parroting the comment in the echochamber.

I don't really think the story has any merit on its own.

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