Time to Stand Up for Steve Jobs

Jul.23.08 | About: Apple Inc. (AAPL)

Why would anyone own Apple (NASDAQ:AAPL) shares knowing that Steve Jobs' health may be in jeopardy?  As Apple reaffirmed its official stance that the health of the company's CEO is a private matter, investors pushed Apple stock down into the $150s. As the potential health issue lingers, unanswered, will the stock continue to drop?

Here are two factors propelling long-term investors to not only hold through the short-term uneasiness, but to actually buy more shares on the dip:

1.  Occasionally, someone builds a platform that lives on. The Mac operating system, which was fortunate enough to survive the era of Microsoft dominance, provides the Mac computer and the iPhone with a barrier to entry 100 stories high.  Even if a new competitor came along and released a superior operating system, it would not be able to penetrate the market. Microsoft did such a good job of building a platform monopoly that it is a miracle the Apple OS even exists. Apple's cult-like following in the 80's and 90's kept software developers around during the lean years. Without software, an OS platform is irrelevant. This platform is why the Mac isn't just another computer and why the iPhone isn't just another gadget.

Mr. Jobs has built an economic moat around Apple that will flourish for years to come. Microsoft (NASDAQ:MSFT) has owned the last 25 years, and Apple is poised to be the next Microsoft-only bigger. Not only does Apple produce the OS, it also produces the hardware for a generation built on technology. Twenty years ago, technology was a luxury, now it has evolved to become a worldwide necessity. Apple is ideally positioned to take advantage of the tech revolution. When analyzing Apple, the OS platform is the most important aspect of the company. It insulates them from short-term competition.

2. If there is anybody who deserves space, it is Steve Jobs - he's earned it. I've read every bit of Apple commentary over the last few days and it shocks me that nobody has stood up for the guy. Ignorant writers assume that his company is a one hit wonder that will wilt away once he is gone. I'm sorry but it's time to accurately report what this man has accomplished over the last ten years.

It's time to show some compassion in a world full of greed, greed, and more greed. I know that sounds naive, but every once in a while it wouldn't hurt to do the right thing. Let Mr. Jobs have some space. Investors have made too big a deal of his health and not a big enough deal about the one million iPhones that sold out in on opening weekend. This disconnect has created a classic buying opportunity.

These are the two reasons why I haven't sold any Apple shares over the last week, and why I've actually bought more on the dip. Ridiculously, his health scares investors like some kind of terrorist attack. This is an overreaction. Those still holding Apple shares understand the risk but also understand that any short-term drop due to Steve Jobs' health will quickly rebound because of the enduring strength of his company.

Disclosure: Long AAPL