Posts by Henry Blodget

  • Blodget: If You Own An iPhone, You're Partially Responsible For Those Kids Working In Tin Mines

    Henry Blodget at Yahoo Finance 49 mins ago

    The BBC traced Apple's supply chain back to its roots and found that, among other things, tin used in iPhonescomes from dangerous mud mines in Indonesia that employ and kill children and that Chinese people who assemble iPhones work such long hours that they occasionally fall asleep on the job.

    These discoveries are startling and depressing. At the very least, they should remind us that the true cost of iPhones is much higher than what we, Apple's rich customers, actually pay for them.

    [Get the Latest Market Data and News with the Yahoo Finance App]

    If this really is news to you, though, you've been living in denial.

    If you're suddenly appalled at Apple, moreover, you should acknowledge a few things:

    None of this is to say that some of the truth about the parts and labor that go into your iPhone isn't depressing and horrifying. It is.

    It is also not to say that Apple shouldn't keep trying to do better. It should.

  • My company offers unlimited vacation and yours should too: Henry Blodget

    Henry Blodget at Yahoo Finance 2 mths ago

    At our company, Business Insider, we had some concerns about the policy. But, on balance, we liked the idea. So, we tried it.

    Four years later, it has proven a big--if not unqualified--success.

    Why?

    Three main reasons:

     * The policy helps put everyone's focus on the quality and impact of our team's work rather the number of hours they put in

     * The policy treats people like the adults they are, giving them more freedom and responsibility to build the lives and jobs they want

     * The policy saves a lot of administrative hassle for everyone involved

    The policy does require every member of our team to take responsibility for doing an excellent job. They need to communicate clearly and make sure someone else is handling their responsibilities when they're out. They need to create a lot of value for our readers and clients. But they have as much freedom as we can give them to do their work when and how they want. And if they can do a great job while talking a lot of time out of the office, we're happy to have them do that.

  • The Apple Watch is totally irrelevant: Henry Blodget

    Henry Blodget at Yahoo Finance 3 mths ago

    I'm an Apple customer and shareholder. I watched parts of the live-stream of the launch yesterday — when it wasn't crapping out. I looked at pictures and videos of the new products. I read some early "takes" on the products.

    So it's time to rush to judgment.

    And here's my judgment — as a customer first, and then as a shareholder.

    My judgment as an Apple customer...

    THE iPHONE 6: Yay!

    Apple has finally caught up with the rest of the market and launched a smartphone that isn't tiny. I've been a loyal iPhone user for 5 years, and I've been waiting for this particular upgrade for the past two. The faster processor, better battery, and better camera are also appealing to me.  Great job, Apple.

    THE iPHONE 6 PLUS: Yay!!

    APPLE PAY: Cool!

    APPLE WATCH: Meh.

    My judgement as an Apple shareholder...

    I probably should have dumped my excess Apple yesterday, when the stock jumped to $103 in the seconds before the Watch was announced (it then plummeted). I think there's a decent chance that that will be the high for a while.

    Make no mistake:

    The only Apple product that matters in terms of Apple's financial performance over the next year is the iPhone.

    Why?

  • Why Does The Economy Stink? Because America's Owners Are Greedier Now Than Ever Before

    Henry Blodget at Yahoo Finance 4 mths ago

    The U.S. economy is still sputtering. Why is growth so slow and weak?

    One reason is that average American consumers, who account for the vast majority of the spending in the economy, are still strapped.

    The reason average American consumers are still strapped, meanwhile, is that America's companies and company owners — the small group of Americans who own and control America's corporations — are hogging a record percentage of the country's wealth for themselves.

    In the past 5 years, American corporations have boosted their profits and share prices by cutting costs (firing people) and buying back stock. As a result, unemployment remains high. And wage growth for the Americans who are lucky enough to be working has been pathetic — the slowest since World War 2.

    Meanwhile, America's corporations and their owners have never had it better. Corporate profits just hit another all-time high, both in absolute dollars and as a percent of the economy. And U.S. stocks are at record highs.

    Even Scrooge would be appalled.

    Many people seem confused by this juxtaposition. If corporations and shareholders are doing so well, why is the economy so crappy?

    Let's go to the charts ...

  • The downside of the big stock buyback boom

    Henry Blodget at Yahoo Finance 4 mths ago

    Ultimately, stock prices are determined by supply and demand. When more money is seeking fewer shares, stock prices go up. And vice versa.

    So when you're trying to get a sense of what is driving stock prices, it's smart to look at the changing sources of supply and demand.

    One big source of demand for stocks in recent years has come from companies buying back their own shares. These buybacks have not just provided extra demand — they have decreased the total supply of shares available. So the buybacks have shifted the supply-demand balance and helped drive stock prices higher.

    Related:PIMCO’s Bill Gross names ‘the only safe haven’ in this market

    One important point is that corporations usually make the same mistake in buying back their own stocks that many investors make: They buy most aggressively late in bull markets when stocks are about to fall. And then they stop buying when prices plunge and their shares are actually cheap. In so doing, in other words, they squander shareholder capital.

    But that's a different story.

    More from Yahoo Finance

     

  • Don't applaud Europe’s ‘right to be forgotten' ruling against Google: Blodget

    Henry Blodget at Daily Ticker 7 mths ago

    A European court issued a startling ruling yesterday.

    Citizens have a "right to be forgotten," the court said, and this right will now allow European citizens to order Google (GOOG) to remove links to information about the citizens that the citizens don't like.

    At first blush, this ruling sounds appealing: There is information on the Internet about all of us that we would like to be forgotten. And it is the rare individual who is pleased with everything that turns up when he or she does a Google search on him or herself. (I hate what comes up when I do a search on my name, for example. A lot of it is mortifying and humiliating to me. I've never tried to hide it, and never will, but if it suddenly disappeared from my Google searches, Wikipedia page, bio, and the SEC's web site, etc., I wouldn't rush to complain.) Upon reflection, however, this ruling creates a whole host of potential problems, not least of which are harm to other people and a major administrative hassle for Google.

    Do we really want that?

    Is that really better for society?

    More from The Daily Ticker

  • It's put up or shut up time for Apple

    Henry Blodget at Daily Ticker 8 mths ago

    Apple (AAPL) reports earnings Wednesday after the market close. Wall Street is not expecting particularly impressive results. The focus of most Apple investors appears to be on the new products Apple is expected to roll out in the second half of this year.

    And those products are indeed critical for the company and its stock price.

    Related: Apple is too big to keep a lid on the rumor mill anymore — Here’s the latest

    A few years ago, Apple was one of the greatest growth stories in the stock market. For more than a decade, the company astounded Wall Street with one smashing quarter after another. Eventually, Apple's lead in smartphones and tablets seemed insurmountable, and Apple's stock price soared above $700 per share.

    But then the premium smartphone market hit maturity, and smaller, cheaper tablets began to gobble up more and more market share.

    And now Apple is no longer a growth company.

    Why has Apple stopped growing?

    More from The Daily Ticker

     

     

  • 3 reasons why this pullback could get much more severe

    Henry Blodget at Daily Ticker 8 mths ago

    Editor's note: This post originally appeared on Business Insider.

    Financial markets are on edge Friday morning after yesterday's bloodbath in momentum stocks.

    On Thursday the Nasdaq suffered its worst one-day decline since November 2011 and is off 7% from its March high; the Dow and S&P 500 are down about 3% from their highs.

    Related: Are social media stocks in a bear market?

    Some signs suggest that this pullback — or another one sometime soon — could get much more severe. Why?

    Three basic reasons:

    Let's take those one at a time.

    First, price.

    Even after the recent drops, stocks appear to be very expensive. Does a high PE mean the market is going to crash? No. But unless it's "different this time," a high PE means we're likely to have lousy returns for the next seven to 10 years. So that's price. Next comes profit margins.

    And then there's Fed tightening.

    Related: Short-term interest rates likely to stay near zero for 2 more years: David Kotok

    More from The Daily Ticker

  • Stocks and bonds priced to have worst long-term performance in history

    Henry Blodget at Daily Ticker 8 mths ago

     In January 2014, Blodget predicted stocks could fall up to 50%.

    This post originally appeared on Business Insider.

    I've written frequently about my concern about today's stock prices.

    I believe stocks are now so expensive that they will likely deliver crappy performance over the next decade. I also believe that there is a decent chance of a 40%-to-50% crash in the next couple of years.

    This view is based almost entirely on valuation: According to most historically valid and cyclically adjusted pricing measures, stocks are at least 50% overvalued, and I don't think it will end up being "different this time." I described the facts underlying this view in detail here.

    Related: What keeps some of the greatest minds in economics up at night

    How lousy?

     

  • Apple's talks with Comcast reveal that Apple is no closer to "cracking" TV

    Henry Blodget at Daily Ticker 9 mths ago

    Apple (AAPL) is in talks with Comcast (CMCSA) about a new TV-over-Internet service, The Wall Street Journal reports. The service would allow Apple to replace the cable TV set-top box and, thanks to a special deal with Comcast, provide streaming TV services with better performance than most video-streaming services like Netflix can currently offer. Apple wants to control the customer relationship and get a cut of Comcast's subscriber fees.

    Related:Chromecast vs. Roku vs Apple TV: What's the Best Streaming Device?

    As described, this deal would seem to have almost no chance of being implemented.

    More importantly, the talks reveal that several years after Steve Jobs told biographer Walter Isaacson that he had "finally cracked" the TV market, Apple is no closer to solving the TV puzzle.

    More from The Daily Ticker