Ted Bauman’s Take on Apple Stock

Ted Bauman, an editor at Banyan Hill Publishing is an investment advisor. He is also the writer of Banyan Hill Publishing’s “The Bauman Letter” newsletter that offers pertinent advice on securing and preserving wealth. With his financial and investment background on stocks, he has devoted much of his time delving deeper into the performance of stocks of various companies.

Mr. Ted Bauman has a lot of reservations concerning Apple’s future. Despite the fact that the Apple stock is impressive currently, its future does not seem all that bright. According to this experience economist in an article, he wrote in his “The Bauman Letter” he says that consumers want innovative products from Apple. But on the contrary, the company’s growth has stagnated following the demise of its former Co-founder and CEO Steve Jobs which lead to a 6.5% overnight drop in earnings.

Ted does not dispute the fact that Apple is the world’s most profitable company owing to its iPhone line of business. He went on to point out that the company only controls a larger market in the United States, Japan, and the UK. In most countries, the Apple controls only between 12-25 % market share. In totality, its global market share is only 20%. Ted Bauman answers people’s most asked question on how Apple still manages to be profitable with such small market share. Mr. Ted explains that this is due to Apple’s pricing power. The brand is developed on the concept of unique experience. Most customers are willing to pay premium prices for this perceived pinnacle of quality.

The fall in market share for Apple according to Ted Bauman is due to its slowed brand value growth. Ted says that people buy products based on a company’s brand name. In this regard, a company’s pricing power depends on its brand name value. If the brand name drops, so does its pricing power decreases. This case applies to Apple.

In another likely bad move for Apple, the pricing of its new babes, MacBook Air, Mac Mini, and iPad Pro doesn’t seem right. The prices are extravagantly higher as these new products don’t seem much different from the previous versions. This shows that Apple sales are dropping and they are banking on the customers to be willing to pay premium prices for the Apple brand.

Apple is the first company to hit $1 Trillion capitalizations in NYSE this year. However, the stock plunged 18 percent in starting October. According to Ted Bauman, a company that relies on pricing power wealth alone is unstable. A stock that depends on brand power can plummet at the same rate it rises. In addition, Ted says that the returns also benefits goes to the capital owners alone and not employs who devote themselves to making the products. This creates inequality.

Ted’s parting word is for investors to watch the performance of Apple closely. His advice can’t be wrong. He is a seasoned investment advisor who looks at stocks from a keen eye with emotions aside. Bornover at Washington and raised in Maryland’s East Shore, Ted moved to the South Africa at a young age. He attended University of Cape Town. He has a postgraduate degree and History and Economics. During his stay in South Africa, he has held executive positions in different non-profit organization chiefly as the fund manager in the field of affordable housing projects.

In 2008, Mr. Bauman returned home and became the Director of International Programs. He started working for Banyan Hill Publishing on 2013 in an editor capacity for a couple of publications. Ted currently lives with his family in GA, Atlanta.

Leave a Reply