Friday, May 27, 2016

Apple needs to shed its fortune or it will choke on it

$Billion Stakes on the Menu brings up Warren Buffet's new stake in Apple and the advise he could give regarding capital allocation, which Apple desperately needs. 300 $billion in the bank and the reality that whatever next big thing to invent will take less than a billion in cash to do it saddles it with a risk adverse phalanx of finance geeks who will snuff out the company's creativity.  It would be much better if that capital were given back to its shareholders, like Warren Buffet, who could then allocate it more efficiently and liberate Apple back to a lean, mean and creative position. The problem of course is that most of that money is locked away in foreign accounts and can not be repatriated without paying a corporate tax. So, why not have those smart finance geeks figure out a way to distribute dividends directly to shareholders without first repatriating the profit? It couldn't be much harder than the schemes they used to put the profits overseas with in the first place.    

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