Thursday, February 25, 2010

Steve Jobs: Cash Is King

Apple Inc. CEO Steve Jobs told shareholders Thursday that the company's massive $40 billion cash hoard provides "tremendous security and flexibility," but also hinted that the company would not rule out a big "opportunity" if one presented itself, reports Marketwatch.

The best thing you can have during a volatile time like this is cash. Jobs is doing the right thing. If the right opportunity comes along, he will be able to move quickly, when others may be strapped. That said, Jobs has to be careful that he is not stuck with such an un-hedged high cash balance when inflation starts to heat up. Also, just because he has such a cash balance doesn't mean that he should not borrow reasonable amounts of money, if he can lock in the current low rates.

As far as, down the road, hedging his cash position, I wouldn't be surprised f Jobs will be on top of that. There are indications he may have been one of the first goldbugs.

1 comment:

  1. Deferred gratification at its finest.

    "Investors" who demand dividends are rather ignorant. Cash lost is equity lost. Spending some cash to buy back shares is one thing, but spending it on dividends is like buying your 6 year old daughter a new iMac to keep her happy, instead of setting it aside to purchase her college education. In the long run, which will benefit your daughter more? The iMac or college?