Bloomberg.com is out with a brief article on the newly-released FBI file on Steve Jobs related to service on the President’s Export Council during the tenure of G H W Bush. It contains a quote from an interviewee that has quite the LOL-inducing punch line:
Even those who disagreed with Jobs recommended him to the FBI. One person interviewed, who said Jobs was “deceptive,” ended the interview by recommending him for the government job, saying Jobs “possesses the qualities to assume a high level political position,” the FBI records say.
“Honesty and integrity are not required qualities to hold such a position,” in the opinion of the person, the records say.
Moving along, the NYT has excerpted an interview it had with Adam Lashinsky, the author of the recently-published book “Inside Apple” (the title being a play on the old “Intel Inside” slogan), which had this statement:
They’ve just been through a 15-year run unlike any 15-year run of any company in terms of success. I think it’s unrealistic to think they would have another 15 years like the last 15 years if for no other reason than gravity. I think even if he were alive and healthy, they couldn’t have another 15 years like the last 15 years.
The reason that I mention this is that it made me reflect on things. Why do we think we can predict the future so far out? What are the precedents? Apple is now #1 in market cap. But Lashinsky couldn’t have intended to be jejune: Of course Apple can’t once again go from near-obscurity starting now. Is there anything inherent about being on top in market cap – for the first time ever, and only within the last several weeks- that predicts anything good or bad about the intermediate-to-long term? Why can’t Apple go from strength to strength? And then to greater strength? (Of course, it could fall on its face at any time, as well.)
If we think more than a century back to Standard Oil, it achieved dominance some years after oil was first pumped from the ground in Pennsylvania by Edwin Drake before the Civil War. Standard Oil was broken up in 1911. Unbroken, the immensity of the Company as it would be is incredible. Here are the most prominent of the companies created from Standard Oil:
Standard Oil of New Jersey (Exxon), Standard Oil of New York (Mobil), Standard Oil of California (Chevron), Standard Oil of Ohio (Sohio), Standard Oil of Indiana (Amoco), Continental Oil (Conoco), and Atlantic Oil (ARCO).
Many years later, Exxon and Mobil combined (XOM), became the market cap leader, and kept that crown for a while despite shrinking its market capitalization by returning gobs of money to shareholders through dividends and share buybacks rather than retaining the earnings as has Apple. If we were to combine Exxon just with Chevron, ignoring all the other corporate siblings, and added back all the dividends and share buybacks to keep things comparable with Apple, that fraction of Standard Oil would still be #1, and perhaps would have been every year since the corporate breakup and then the rise of the automobile (which is what made oil so extraordinarily valuable).
There are other companies that have been at or near the top for many decades. IBM, GE, and JPM/Morgan Stanley immediately come to mind.
So, sometimes there’s the phenomenon of reversion to the corporate mean, and worse. Think GM, AIG, and countless others. But sometimes the more things change, the more they remain the same, as with the above corporate examples of durable success. So I would say to Mr. Lashinsky: au contraire; regarding the future, what you don’t know is the only thing you know.
(Note: Long AAPL. Not a recommendation to buy or sell.)