Why Apple Bulls Are Wrong About The Impact Of A New CEO

| About: Apple Inc. (AAPL)

There's a guy I go back and forth with on Twitter once in a while. I can call him out like this because we know one another, in the social media sense. Plus, he fully realizes that his stance is likely to fall on the more popular side of this debate.

Nevertheless, a recent Tweet from WeezyMiyagi can serve as the poster child for all that I consider wrong with Apple (NASDAQ:AAPL) analysis and hysteria in a post-Steve Jobs era.

Now, before I brand Weezy's body of AAPL Tweets over the top, let me give that one some context. Weezy is from China. He wrote me personally and pointed out two very important things. I agree with both. First, he thinks people underestimate how Apple products will permeate Chinese culture. Second, and more to the point of his Tweet, he notes that Steve Jobs' "persona" does not mesh well with Chinese culture. By contrast, Weezy told me:

Cook's demeanor is perfect fit for Chinese culture. He exudes respect. He exudes calm confidence. Less is more ...

I respect that. And I do agree. Tim Cook meeting the Chinese, as he has this week, likely goes over a bit better than Steve Jobs doing it. Although, Jobs knew how to adapt socially and culturally and turn on the charm or use some tact when he needed to. People often forget that. He was not one of these socially awkward types who could not adjust when necessary. But, that aside, as an unabashed AAPL bull, Weezy's comment, in concert, with other Tweets he has made in the past few weeks, speaks to a larger point I have been trying to drive home.

Here's some more from what I will just call Weezy's Greatest Hits:

I hope Weezy will chime in here or on Twitter, but, let's be clear, Weezy is not alone. There are certainly hundreds, probably thousands and quite possibly millions of people out there who love Apple and, as a result, are emotionally invested in AAPL. It's a bit like the Sirius XM (NASDAQ:SIRI) effect. The stock has made quite a few people wealthier on an amazing run up, therefore the recipients of this wealth develop a certain loyalty that clouds otherwise sane and logical judgment.

Now, I am not saying that Weezy and people like him are wrong about Apple or AAPL. They might be right, particularly in the near-term, as I do not see anything on the immediate horizon to slow Apple or AAPL down. But, when you move away from the very legitimate point with relation to China, it seems that many Apple fan boys and girls and AAPL bulls now abruptly discount the significance of Steve Jobs as Apple CEO and the impact his absence will have.

When Steve Jobs was at Apple, it's not a stretch to say that he achieved God-like status, particularly among the ultra-faithful.

I just started reading Walter Isaacson's Jobs' biography. I got through the part where Jobs tells Isaacson that one day his parents realized he was "special." When the school called and told his parents of Jobs' disobedience, they told administrators and teachers that it's the school's fault because they cannot keep Jobs stimulated and engaged. Shortly thereafter, one of Jobs' teachers realized he was "special."

From then on out, practically everybody, from Jobs' parents to his teachers, created a set of rules and procedures for Jobs and another set for everybody else. Everybody conceded to what Jobs wanted, bending to his will regardless of the situation. When he dropped out of Reed College because he did not mesh well with the work and required courses, Jobs was allowed to continue, for all intents and purposes, as a student, living on campus and auditing only the classes he found interesting. He did all of this for free. As Reed's Dean of Students, Jack Dudman, told Isaacson:

(Jobs) had a very inquiring mind that was enormously attractive. He refused to accept automatically received truths, and he wanted to examine everything himself.

Simply put, Jobs was the type of person who comes along once a generation, if not once a century. Maybe less. And, all of a sudden, we want to eschew the greatness we could not stop talking about when Jobs was alive to act like it's really no big deal that he's gone. That's psychology doing what it does to the minds of fan boys and girls and permanently bullish investors.

Speaking of Tweets, remember the one that went viral last weekend from former Apple designer Michael Margolis:

Not surprisingly, Margolis was quick to backtrack or, as we often hear after a social media flub, "provide context," to his statement. The first sentence clearly provided context. As for the second, there's no way around it. He said what he said. And, even if he was not predicting the demise of Apple, what he said still means something.

There is nobody left to say no to bad design. There is nobody left to say no to a dividend. There is nobody left to say no to a buyback. There is nobody left to say no to bad ideas from "bozos." There is nobody left to nurture and maintain a wholly organic culture that Steve Jobs willed and controlled. And, yes, I realize the disagreement between the words "organic" and "willed and controlled." I did that on purpose. Only Jobs could create something so natural, so beautiful, so real, so successful by exerting an absurd level of control on otherwise strong, competent and capable people.

And now, that's all gone. Apple is left with a mere mortal as CEO. A man who is hardly the creative and marketing genius Jobs was. Tim Cook does well shaking hands with foreign politicians, but, he's in a tough, almost impossible job as Apple attempts to move forward. He's living on borrowed time.

Investors need to realize the magnitude of the shift Apple has undergone. While the stock price might not react negatively for a long time, bulls are now officially riding a gravy train built and conducted by Steve Jobs. Once-in-a-lifetime type people, who choose to become CEOs of computer companies, do not come along very often. And that's the very reason why what's happening at Apple must come to an end sooner rather than later. If you're just along for the ride, that's fine. You likely have nothing to worry about. If you're emotionally invested, you might look back someday and reconsider how you rationalized the departure and death of Steve Jobs.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.