Apple vs. Exxon Mobil
I read an article last week by Scott Fearon, who wrote the excellent book Dead Companies Walking (a good book about shorting stocks, which can benefit investors even if they don’t short stocks). The article basically posed a hypothetical question on whether Apple was a better investment than Exxon Mobil. Fearon goes on to explain why he thinks XOM is a better bet than AAPL over the long-term.
His points:
Apple is a consumer products company with the majority of revenues coming from one product class—the iPhone
Consumer products can be very difficult to predict and can go in and out of demand very quickly
Exxon is a more predictable company that sells products that are essential to the world’s economy
He implies that Exxon has a stronger balance sheet than Apple
While I often agree with many of Scott’s opinions in his posts, I’ll make just a few counterarguments to his opinion that Exxon is a better business than Apple. I think Apple is a much better business: