Achilles, the Tortoise and Apple’s market cap

Whenever Apple gets close to the goal, the goal has already moved.

From friend-of-the-blog Chuck Jones, writing for Forbes: Apple’s Stock May Have To Hit $222 For It To Have A $1 Trillion Market Cap.

Apple made a new high this week, which got the investment community to talk again about when it could break the $1 trillion barrier. While there isn’t much significance to achieving this, it is very impressive. Currently, it would only take the stock to increase 6.1% to hit $203.45 and $1 trillion if you use the basic share count, or just 5.2% or $201.66 if you were to use the estimated diluted shares.

However, if it doesn’t get there by the end of July or early August when Apple releases its June quarter 10-Q the number of shares outstanding will be lower. This means the stock price will have to be higher to hit the magic number.

My take: According to Zeno, Apple’s valuation will never reach $1 trillion. A version of his original paradox, borrowed from Platonic Realms:

The Tortoise challenged Achilles to a race, claiming that he would win as long as Achilles gave him a small head start. Achilles laughed at this, for of course he was a mighty warrior and swift of foot, whereas the Tortoise was heavy and slow.

“How big a head start do you need?” he asked the Tortoise with a smile.

“Ten meters,” the latter replied.

Achilles laughed louder than ever. “You will surely lose, my friend, in that case,” he told the Tortoise, “but let us race, if you wish it.”

“On the contrary,” said the Tortoise, “I will win, and I can prove it to you by a simple argument.”

“Go on then,” Achilles replied, with less confidence than he felt before. He knew he was the superior athlete, but he also knew the Tortoise had the sharper wits, and he had lost many a bewildering argument with him before this.

“Suppose,” began the Tortoise, “that you give me a 10-meter head start. Would you say that you could cover that 10 meters between us very quickly?”

“Very quickly,” Achilles affirmed.

“And in that time, how far should I have gone, do you think?”

“Perhaps a meter—no more,” said Achilles after a moment’s thought.

“Very well,” replied the Tortoise, “so now there is a meter between us. And you would catch up that distance very quickly?”

“Very quickly indeed!”

“And yet, in that time I shall have gone a little way farther, so that now you must catch that distance up, yes?”

“Ye-es,” said Achilles slowly.

“And while you are doing so, I shall have gone a little way farther, so that you must then catch up the new distance,” the Tortoise continued smoothly.

Achilles said nothing.

“And so you see, in each moment you must be catching up the distance between us, and yet I—at the same time—will be adding a new distance, however small, for you to catch up again.”

“Indeed, it must be so,” said Achilles wearily.

“And so you can never catch up,” the Tortoise concluded sympathetically.

“You are right, as always,” said Achilles sadly—and conceded the race.


  1. David Drinkwater said:

    The tortoise duped Achilles with Special Relativity and frames of reference. The Finish Line is fixed in space. The position of the tortoise is not. Achilles’ race is fixed in space. He should still win the race, unless he gets caught napping like the Hare.

    https://science.howstuffworks dot com/science-vs-myth/everyday-myths/relativity5.htm

    It figures Achilles would be involved in a myth.

    Apple Investors: don’t get duped by the myth!

    June 14, 2018
  2. John Blackburn said:

    Zeno’s has always been a pretty theory, but is so easily disprovable that it instead becomes illustrative of a race between two mindsets, one fact-based and one theory-based.

    June 14, 2018
  3. Fred Stein said:

    Apple is worth $2T today.

    The following, while absurd, illustrates a point. At today’s price, Apple has a forward IRR of 7%. At $2T it would have an IRR of 3.5%. If you could borrow $2T at less than 3.4% you would be slightly ahead; 1/10 of % of $2T annually.

    More realistically, the forward IRR means that Apple can keep buying AAPL even at substantially higher prices.

    June 14, 2018

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