Apple’s Tim Cook has no time for short-term investors

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Tim Cook is going to BoxWorks.
CEO Tim Cook says short-term investors aren't needed at Apple.
Photo: Apple

Apple stock price has dropped steadily throughout June. That likely bothers short-term investors, but not Tim Cook. Apple’s CEO thinks long-term, and says planning no farther than the next quarterly earnings report is a recipe for disaster.

“If you’re making a decision based on the short term investors, you’re going to be guaranteed to be making terrible decisions,” Cook said yesterday.

He was speaking at Fortune’s CEO Initiative forum. Cook also spoke about why he feels that his job extends beyond just making products and into making a difference in societal problems.

Go long-term or go home

Cook says Apple always plans long term. “I look at the investments we make, the big ones are all multi-year — sometime, you know, five, seven, ten years out, and they’re certainly not conducive to a 90-day cycle.”

Apple is sometimes pressured to make decisions that will quickly push up the stock price. Tim Cook says that’s not how the he conducts business. “I’m going to tell my investors, we welcome all of you but If you’re short term I’m really advise you not to get in, because it’s not how we’re going to make our decisions.”

End 90-day earnings reports

In about a month, Apple will report on how it did during this current financial quarter. Tim Cook thinks this is a waste of time.

“We report every 90 days because it’s a requirement. If I were King for a Day, 90 day earnings would be just flushed. They’re a remnant of a different day and time,” is how he put it.

With a company like Apple, it’s not hard to see the value of long-term investing. Ten years ago, Apple’s share price was trading around $25. Fast forward to today, and it’s at $185. When that’s taken into account, the fact that it was at $194 a few weeks ago is immaterial.