Tim Cook’s Apple

Tim Cook never led like a headline magnet, and that’s exactly why we wanted to stop and take his record seriously. With news swirling around Apple’s leadership structure and succession, we zoom out and ask a practical investor question: what does Cook’s style actually mean for Apple stock, for the Apple brand, and for the next decade of decision-making?

We talk through why Apple became so hard to ignore in consumer technology: the iPhone-led ecosystem, the App Store and services growth, and the daily-life features that keep customers locked in across watch, earbuds, phone, and more. We also dig into the part of the Apple story that doesn’t fit neatly into a product launch, the geopolitical and supply chain reality. From US-China relations and tariffs to quiet negotiation and gradual manufacturing diversification into India and Vietnam, we outline why “corporate diplomacy” can be a competitive edge.

Then we bring it back to investing. Apple is a mature giant now, which changes expectations, valuation sensitivity, and how dividends and capital allocation matter. We debate Apple’s measured approach to AI, what a next-generation leader like hardware executive John Ternus could bring, and why we think investors should look beyond PE ratios to the character and behavior of the CEO, especially when ego and self-promotion become risks.

If you found this helpful, subscribe, share it with a friend who follows Apple, and leave a review with your take: how much should CEO personality influence an investing decision?

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Transcript

Why Apple’s Leadership Shift Matters

Clem Miller 0:27

Good morning, everybody. Uh we're here with Skeptic's Guide to Investing. Uh Steve Davenport is with me. This is Clem Miller. And today we're going to talk about Apple uh and what motivates us today to talk about Apple was the decision to uh uh to move uh Tim Cook uh up into the uh the chairman's uh position, replacing him as uh as uh as CEO uh and president. And uh and so Steve, uh you know, you tell me what does what does this mean for Apple? And you know, are you invested in Apple? And you know, what do you what do you think about Apple's uh prospects?

Steve Davenport 1:12

I don't know. I think that Apple as a part of consumer electronics is an indelible place. And I think it's very hard to not own Apple based on you know their the universe and their app store and where they are in technology. I think Apple has become maybe the premier brand of um technology and phones, and I I think of it as um a company that continues to evolve. And I look at what's happening with um the CEO and moving up, and I I feel like his history um is going to be a significant one when we look at business leaders. I mean, he's been CEO for 15 years, and if we look at the stock price as a reflection of his work as CEO, which isn't really fair because there's a whole bunch of developers and there's a whole bunch of other things that happen in a 15-year period, but a 1,700% return for a 15-year period is one of the greatest runs of any CEO. And so when we think about Steve Jobs created Apple, Steve Jobs was the person who marked it as a special way to think about technology and ease of use and simplicity of design and all the things that they brought to the marketplace. I think that Cook's role as CEO is gonna go down as one where he stepped in and said, I'm not necessarily the designer, I'm not necessarily the facts and figures and numbers guy. I want to develop a culture and enhance that culture so that it enhances the lives of people who are customers. And taking that bigger step, instead of saying, hey, I want the phone that has the quickest time for me to make a call or the you know, transmits uh at a chip speed of this, I think what he did is he said, What will make people feel and operate our devices in a way that is better than the way people think about or operate devices on their own? And I think we had the flip phone and we had the Blackberry, and we've had all these different people come along with different ideas. And I don't really pinpoint on what is Cook's difference, other than to say his working his way through all of the problems in China, working his way through some of the questions about Apple producing things in the U.S. with the Trump administration, he really has been a leader in a way that we just don't see, which is we see Huang and NVIDIA, and we say, he's a big personality. He's got the leather jacket on, he's got, you know, he wants to talk to everybody and tell them that NVIDIA is the best. Uh, I think that Cook has walked with us, you know, much less of a swagger. And I think in some ways, he's created that calmness and that forethought of the future that really was caring about the customer. Now, I'm not gonna canonize him or bring him into the you know business hall of fame, but he's gonna be there in the discussion. When you talk about whether it's LeBron or Michael Jordan, I think you're gonna talk about whether it's Jeff Welch or Tim Cook or, you know, he's gonna be one of those people. And I almost think that the news and the media today isn't giving it enough talk because I think it's one of the, you know, great American stories. What do you think?

Apple’s China Diplomacy And Supply Chain

Clem Miller 5:16

I I totally agree with you. I I would when I look at at Tim Cook, especially in the context of US-China relations, I think of Tim Cook as being the consummate corporate diplomat. That's what he is. He's the consummate corporate diplomat. He, like you said, he's not flashy. He's always a behind-the-scenes kind of guy. Uh he goes into meetings. You know, you've seen, I'm sure you've seen pictures or video of him slipping into offices, right? He's always like, he's like always going in to talk to leaders, and he never does press conferences beforehand or afterhand. It's always, you know, go in, do business, and then and then and then leave. One of the things that he's, you know, he's been able to keep Apple pretty much out of the uh out of the limelight of tariffs, of US tariffs, or of Chinese tariffs for that matter. Uh he's managed to maintain a role for Apple in the Chinese marketplace. Uh one of the things he's been able to do diplomatically is uh to gradually diversify uh Apple's production out of China uh and into India and Vietnam gradually, you know, maintaining the central base in China, but diversifying uh into India and Vietnam. And he's been able to do that without raising the hackles of the uh of the Chinese authorities. So he I would say he's the consummate diplomat. I mean, Apple, you know, if you think about Apple's business model, what is their business model? Their business model is basically to run design out of California in Cupertino and to uh to build uh the components and the products uh in Asia. Uh and it was a purely US-China partnership, and now it's diversified into uh India and Vietnam, of course, with uh uh with chips from uh Taiwan semiconductor.

Premium Brand And Product Ecosystem

Steve Davenport 7:40

Yeah, I just look at him and I think you know, there's many different ways and styles of leadership. And then the authoritarian style, and then I'd call it there's the light touch, would be his his style. I agree. I think there are a lot of leaders who want to screen and tell you what our message is. And I think there are, if you look at the, you know, I'm an iPhone user, my kids are, you know, Samsung, and I think there's a, you know, there is a certain amount of size and what size means to a product in terms of interoperability and how how it fits with the other things in your life, your TV. And you want to cast from your phone to your TV, you know, you want these things to operate and give you different choices on how you enjoy music, how you enjoy, you know, podcasts, how you enjoy, you know, I mean, we're on the Apple platform, and we we believe in in being on these different places where different people are using and listening to podcasts. And I just think that in terms of how he's tried to lead, I like the fact that, you know, he's always thinking about what's next. What's next for Apple? Is it you know, a better camera? Is it um connection more with earbuds? Is it the health characteristics of the watch? I think those things do make lives better. Yeah. And I think that by Apple taking a leadership role in them, they could have said, we're not interested in pulses and heart, you know, heart rates. And that's not what we want to do. We want to make the the phone a place where you can use the screen and you can use you know interoperability with the calls, but text, but you know, when you look at how things have developed in all of the areas, and I'd say the one area I'm not really happy with how they did things was the TV. I always thought that they could have really dominated if they could get into that TV space. And I think that competitors like Samsung and LG and others, you know, it's a it's a tough marketplace. Yeah. Um, I've heard about them going through a low-cost version and having a you know a cheap apple, and they didn't go after that with an emerging market phone. And I kind of think that was probably a good thing. Why why water down your brand if you're getting premium pricing? Um, you know, you stay closer to the premium pricing than you do to the low-cost model because having the most phone units doesn't win, you know. I don't know if that wins you the rigs, right?

Clem Miller 10:31

Um, and their products are just so reliable too. Right. I just I just the other day I ended up uh accidentally having my air buds in the wash. And uh I was you know, I I put them on. There was a little bit of static at first, uh, and then I laid them out to dry and put them back on, and they worked now perfectly.

John Ternus And The Next Wave

Steve Davenport 10:57

I was gonna say, it gave you a little bit of electrical charge through your brain, and uh you're feeling a lot better about that. Um but yeah, I mean look at who he took over. I mean, he took over a brand and an organization that had been ups and downs with the Apple computer and ups and downs with some of the things that they have done with the um music. And I I think that what it really takes is you need an innovator like jobs. You can't have a company that comes along and transforms without some real great technology vision and other things, which brings us, which Steve brings us to the new guy.

Clem Miller 11:39

Okay, a guy named John Turnus, and he is a hardware guy, yeah. Uh and an innovator, and has invented some of these products that uh that Apple is using. So we're kind of going back to the you know, to the hardware aspect. And we'll see.

Steve Davenport 11:57

Well, that's what I was gonna say is that he's he's been fortunate with you know some of the leaders that have been in the design phase, some of the technology leadership, some of the you know, um market leadership in terms of their innovation and marketing. I think they are you know taking that Apple brand and and making it global and then also making it diverse, such that now their services division, I think it's up to almost 30% services, right? And so I think that when you look at building a company and doing it such a way that it's not going to be there for five years, it's not gonna be there for 10 years, it's gonna be there for 25 more years. And I think he's um doing that. And one of the things that I thought was smart was not getting too carried away with AI investment. He's like, we're a user of software. We don't necessarily want to be the creators of AI, we want to be one of the best users of AI. So thinking about how to incorporate it and not putting all of your chips in on the table now with billions and billions and billions in server infrastructure and other things. And I think it was a creative way for them to preserve capital and then be in a stronger place because we don't know exactly when AI is going to come on and be profitable. We don't know exactly how profitable it's gonna be. So he took a conservative approach, he took a what I'll call innovative but not aggressive. And I think that in some things, Glem, I think that whether we have a president who goes about things in his own style, I think what uh a leader like Cook has done is he's shown us another style in another way. And I think as as we look at investing, we invest for the company and their cash flows, but we have to invest around who are good people. And I think that Cook has earned the respect of most people who are investors because he's taking care of us. Yeah, will the next guy you know have 1800% over a 15-year?

Clem Miller 14:16

I hope he does. Well, yeah, but it's a much more mature company now, so we can't expect that.

Steve Davenport 14:20

It's much part of it. I agree. I just I'm just saying that I think that he was given it at a point in time where jobs had done so much to create the culture, create the innovation inclination, and just bring you new ideas and new ways for you to use your phone and uh to connect to people. And I think that yes, was was did that put him in a place where he could succeed? Absolutely. Did anybody else have that opportunity? Not a lot, but he had to differentiate himself among an Apple culture that had some pretty capable people. So you don't get to be the president of Apple and the CEO without having shown people you have some skills and some abilities that make you unusual. So I like to celebrate a guy like Tim Cook because he's different. And I think he made a difference in a lot of leaders here. And I wish that a lot of leaders, you know, kind of thought about the shares and thought about the public a little more and thought less about their ego and how they were um, you know, sending their messages. And that's not just for NVIDIA, that's for a lot of companies. There are a lot of companies out there with leaders that I would say uh are a little, as we were talking in our past podcast about SpaceX. I mean, Elon Musk, CEO, Tim Cook, CEO. Very different. And um, not one is right and one is wrong, but let's recognize things that are good instead of always trying to recognize things that are wrong with our leaders. Because I think that America has some great leaders, and if we learn from them, you know, just like we had Ford and just like we had Edison and just like we had different people in different roles for companies through the years, I think the role that Cook had and his execution, it was first class, and I think uh we he deserves a lot of credit, and Apple deserves a lot of credit for recognizing, supporting, and building around him to such a way that they could deliver that kind of shareholder result. I mean, I put him I put him in the business hall of fame. Would you? Yeah, definitely. And who would you say is most similar to him in terms of leadership or uh that's uh that's a good question. Um I kind of think the guy at Intel was pretty was pretty strong with the whole um you know, the it was about the chips doubling and every, you know, capability doubles every six months. Um I I think there are people out there, but I just feel like we're going over the story, and I think it it deserves a little more time and effort to kind of give it the true um amount of praise and and glory that he deserves.

Clem Miller 17:47

I you know, I think I I think a lot there are a lot of good business leaders out there who we just don't know about because they operate, you know, they don't operate in a flashy way. So I think that, you know, we're talking about Cook today. I'm sure there's a lot of others out there that we just, you know, that just just operate, do a good job, aren't flashy, and so we don't really hear much about them, right? They don't, you know, they're not always on uh CNBC and you know they're not you know, they they're just they're just quiet operators. Yeah, it was Gordon Moore, you know.

Valuation Dividends And Maturity Risks

Steve Davenport 18:29

Yeah, more Moore's Law. Moore's Law and Andrew Grove was another one who came on later. I mean Hewlett and Packard, I I think there are, you know, um some great people, and Jobs was certainly, you know, he he set them up for success, but it takes a lot to continue success. And sometimes it's harder um to move a company forward and take what is kind of a creative organization and a tech organization and make it really a consumer organization. And that's kind of where I feel like he was able to make that transition for the organization.

Clem Miller 19:08

Which uh, you know, which leads me to say that, you know, as an investor, you know, you have to pick the right uh point in a company's life cycle in which to invest, if you really want to generate revenues, uh really want to generate returns fast. And uh, and so you know, obviously, if you're very early, you know, there's a good chance that you might have losses. Uh so you want to be on the upswing. Uh, but at a certain point, when a company becomes too big, uh, it becomes too expensive, maybe. And so, you know, we're talking about how great Tim Cook is, and he is, and Apple's a great company because of him. And Apple under John Turnitz probably has some great prospects going forward. But it's a big, it's a big company, it's actually pretty expensive.

How CEO Behavior Shapes Investing

Steve Davenport 20:00

Right. And I was gonna say that, you know, I don't know if it was under Cook that they started paying a dividend. Um, but I think that the paying of the dividends, the capital allocation thoughts, the fact that it's multiple was so low for so long because I don't think people realized how much cross-sell opportunity there was. And now he's realized a lot of that cross-sell and he's created a universe of products that um consumers can, you know, be classified as Apple people. And they have all the different uh, you know, the watch, the earbuds, the phone, uh, the TV, and they're integrated and they they love that consistency across platform. So I I guess I would sum it up and say Apple's a great company. Cook has been a great leader. Do I want to invest the same way I did when he started into this new CEO, Turnus? I don't think I do because I think it is pricey right now. Um, but I recognize it as a significant brand, and I recognize that his still being there is going to be a plus for investors. And I'm kind of interested and excited to see what this new person does. Because, you know, when we've had changes at Microsoft to when we went from Gates to Balmart to um the current leader, it really was a different person with different ideas and different ways of doing things. And guess what? Those brands thrived. And I think that we can find brands to thrive with the right people. I think that what this tells me, and you can tell me if I'm just full of you know what, Clem. I think that when we look at stocks, we need to look past uh the PEs and the peg ratios and look at the leaders and say, do we think this person is going to be the right person for this company going forward? I mean, how do you put persona of an organization in the character of its CEO? Is it uh, you know, nine times out of ten it's important or two times out of ten is important, Bon? Do you think these organizations are gonna run themselves? And that the personality of the leader hardly ever makes a difference. It can make a difference. I mean, how important do you think is the personality and the capability of a leader?

Clem Miller 22:32

I think it's more of a I think it's more of a negative thing, right? If you Something to avoid versus something. Something to avoid, right? So I avoid, you know, like we were talking about, I have I avoid Elon Musk uh for various reasons. I think some of them are, I mean, not just political, but I just think he gets distracted by so many things. Uh I just uh I I I hesitate being involved with that. Um I'm a little concerned about folks who are always out there in the media and being promoted, you know, very promotive, being very promotional. So, you know, obviously NVIDIA fits in that category. So yeah, so I I just I'm you know, I get skeptical about uh about that. Um but you know, I think, yeah, a Timber.

Steve Davenport 23:31

But you can kind of know it when you see it though, right? Yeah, yeah. And I think that when I see it, it gives me more comfort owning those names. Owning the names that have leaders who are kind of you know exhibiting behaviors and ideas that I agree that it can also cause, in your point, some some stocks that you would say are on the borderline and it pushes you towards the not to buy.

Clem Miller 23:58

That's that's that's that's where I stand.

Steve Davenport 24:01

Yeah.

Clem Miller 24:02

I I will I will vote against stocks if their leaders look to be too self-promotional.

Listener Feedback And Final Takeaways

Steve Davenport 24:08

Yeah, and I think that's the way we should make them. So uh, you know, I think today we wanted to take a stop and and and really think about what what does a cook mean to Apple and what does a cook mean to the marketplace. And I guess I would say that, you know, he reminds us that sometimes patience, sometimes perseverance, sometimes just um waiting and watching how things develop is the way to progress. It isn't always making big decisions and making big investments and trying to do things that are transformational in the day. I think that you want to transform a company over years and decades and not try to transform it all in the you know one or two weeks. So I'm I I think that Cook's moving up, you know, I think it shows a lot of respect at 65. He started at 50. This individual is about 50. I think it shows uh a consistency that I really appreciate, and that I think um makes Apple one of those great companies. I agree. Um, so thanks for listening, everybody. Do you have anything else to add, Clun? No, I think I think we've covered it. All right. Everybody, thanks for listening to Skeptics Guide. We appreciate your listening. We appreciate your comments. Please let us know what you think and what you'd like to hear us talk about. And uh we continue to want all of our listeners to uh get better at investing and grow in financial wellness. Have a great day, everybody.