Bill Eccles: February 2012 Archives

(Or, for that matter, Daring Fireball, because parroting crap does not journalism make.)

In yesterday’s Linked List, John Gruber quotes the New York Times which makes this nonsense comparison:

If Apple’s share price grew even 20 percent a year for the next decade, which is far below its current blistering pace, its $500 billion market capitalization would be more than $3 trillion by 2022. That is bigger than the 2011 gross domestic product of France or Brazil.

Put another way, to increase its revenue by 20 percent, Apple has to generate additional sales of more than $9 billion in its next fourth quarter. A company with only $1 billion in sales has to come up with just another $200 million.

It is clear that neither the original author, James B. Stewart in an op-ed piece under the subhead of “Common Sense,” nor John Gruber understands what the three distinct and separate numbers referenced (share price/market capitalization, GDP, and revenue) have to do with each other: nothing.

Market value is merely share price times the number of outstanding shares, so the market value and share price are one number as far as I’m concerned. Share price is based solely on investor emotion. Even those who make decisions based on numbers eventually have to get to some point where their opinion determines what they will buy or sell a share for. After initial issue of that share, there is no real anything which determines share price; its value is based totally on emotion. And so market share is a big but totally meaningless number.1

Gross domestic product, on the other hand, is “the market value of all officially recognized final goods and services produced within a country in a given period.”2 It, unlike market value, is a very real and meaningful number. It’s what people are paying each and every day with their hard-earned money to buy the stuff that a country makes. Real transactions occur to produce a GDP. Real money changes hands to give products value, whereas market share is merely emotion times the number of outstanding shares.

Yes, these numbers are very big numbers and so it seems appropriate to compare big numbers to other big numbers. But I may as well compare Apple’s market value to the weight of Stone Mountain, Georgia, in tons.3 It’s a meaningless comparison.

Finally, revenue, though it seems to be coupled to share price, is not in actuality tied to share price at all. And that’s because one is driven by emotion of investors and the other is driven by real sales. Again, we have imagination vs. reality. A good example of this inexplicable relationship is in Ford’s share price vs. its earnings per share. For several quarters in the past few years, it lost money or just barely broke even, and yet the share price soared. Now it’s on the upswing, and the share price is languishing in mediocre territory.4 Clearly we are comparing emotion versus reality.

Linking share price to revenue with the comparison of a for-example-only 20% share price growth to 20% revenue growth is useless. Again, it’s a nonsense comparison, and you’d be just as well off comparing Apple’s annual share price growth to the annual rate of growth of a teenager. It just doesn’t make any sense.

In the overall context off the rest of the article, the comparison still doesn’t make any sense, but at least there are other reasonable numbers to think about. But Gruber does the rest of the world a disservice by highlighting the most irrelevant and useless portion of the article.


1 And why, if it’s such an amazingly arbitrary system, do I participate? Because in general, investors have tended to be about 10% happier per year for the last 100 years or so.

2 Wikipedia. Is using Wikipedia as a reference good or bad? I don’t know, but it is a concise definition, and I liked the wording of it.

3 Wikipedia again.

4 YCharts.

Apple's Been Busy

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The Godless Northeast

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It’s true.

The number of Christians, and specifically, Catholics, is on the decline in New England.

Interestingly, no Christian bands are touring in New England, either.

Not the Newsboys.

Not Winter Jam 2012.

Not Rock and Worship.

Not Casting Crowns.

Not Jeremy Camp.

Not REDvolution.

Not Veggietales. (There go your future Christians…)

To their credit, both The Devil Wears Prada and Michael W. Smith have dates in Connecticut. You go, guys!

The rest of you are preaching to the choir…

Is It or Isn't It? | Shawn Blanc

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People arguing in the subject post that the iPad is not a PC use the following (in my opinion) specious arguments:

  • It will confuse people.

Useless argument. People can be taught, and they’ll learn that tablets are PCs as soon as you guys agree that they are.

  • Smartfridges will be classified as PCs, as will digital watches, smartphones, etc.

No, they won’t. The primary purpose of the PC is… nothing in particular. That’s why the Xbox and Nintendo DS are also not PCs. And neither is a smartphone.

  • Tablets are used only for a limited set of uses which look a lot like a portal to the Internet.

OK, but what do most people use their definitively-classified-as-PCs PCs for?

The iPad—and all other tablets—are PCs. Now, can we get on to something more useful, like arguing about how well Madonna did last night?

I read an article1 on ChicagoTribune.com which got me wondering, If SGK pulled PP’s funding, how many more women would die of breast cancer? The consequences, according to the Interwebs, would be dire.

However, the numbers indicate that SGK’s funding of PP’s clinical breast exams might be resulting in more cancer deaths than if SGK were funding mammograms directly.

Assume that PP used all of SGK’s money for breast cancer screenings and mammograms over the past five years. Also assume that PP got an average of $650,000 per year for those five years. (I cannot find actual figures.)

Now let’s do the math.

  • $650,000*5 = $3,250,000.

  • Mammograms funded by SGK through PP in those five years: 6,400.1

  • Total SGK funding used for mammograms (via pass-through grants to PP) at a high-end cost of $125 per mammogram2: 6,400*$125 = $800,000

  • Remaining funds used for clinical breast exams (CBEs) at PP: $3,250,000-$800,000 = $2,450,000

  • Breast cancer screenings performed by PP in the past five years: 170,0001

  • Cost per CBE performed by PP: $2,450,000/170,000 = about $15.

Unfortunately, the U.S. Preventive Services Task Force (USPSTF) can’t find evidence that the CBE is effective. Only mammograms have been proven to be effective.3 About CBE’s, PP says this:

Dr. Vanessa Cullins, a vice president with Planned Parenthood Federation of America, defended its use of clinical breast exams. The exam, in which a doctor feels the breast for lumps, is “a good tool” when followed with mammograms and other tests as needed, she said.1 (emphasis added)

Clearly, funding of CBEs is diverting resources from more effective exams, but how many?

More math:

  • Amount of money spent on CBEs performed by PP: $2,450,000.

  • Number of mammograms which could have been performed with that money (at a higher-than-average cost of $125 per mammogram): $2,450,000/$125 = 19,600.

If the SGK money had been used for mammograms in the last five years:

  • Number of women per year, ages 39-49, whose lives might have been saved: 19,600/1,904/5 = 2.4

  • Number of women per year, ages 50-59, whose lives might have been saved: 19,600/1,339/5 = 3.

  • Number of women per year, ages 60-69, whose lives might have been saved: 19,600/377/5 = 10.

So if you were in the driver’s seat at SGK, which would you choose, an unproven use of your money, or an effective use which is proven to save lives? Would you choose to defund PP, too?

The Interwebs disagree with you.

One final note: Outside of these numbers, it’s entirely possible that the backlash against SGK could have cost SGK more funding than the funding lost (and subsequently made up) by PP. The effect of SGK’s loss is also calculable in human terms. But until SGK pulls funding from PP and we can see the cost to SGK’s fundraising, we won’t know that effect.


1 Surprises in Komen-Planned Parenthood dustup: How cancer screening is done and who pays for it, ChicagoTribune.com

2 How Much Does a Mammogram Cost?, CostHelper.com

3 Screening for Breast Cancer, U.S. Preventive Services Task Force

4 Screening for Breast Cancer An Update for the U.S. Preventive Services Task Force, Table 1, U.S. Preventive Services Task Force

On the SGK/PP Split

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First, take a deep breath, then promise to stick with me to the end.

I am disappointed in the outrage which has been expressed by the Internet community at large on the Susan G. Komen for the Cure (SGK, for short) decision to withdraw its support for Planned Parenthood (PP). The outrage seems to be based on a misunderstanding of the facts. The only praise for the decision arises from conservatives who view it as a blow to abortion. But both sides of the debate are missing what could be (could be) a benefit to women’s health, the very cause at the center of the argument.

Two days ago, SGK followed its own relatively new policy of withdrawing funding for organizations which are under congressional investigation, which PP is. The policy, in and of itself, makes sense. There’s no reason why a private, non-profit organization can’t decide to withdraw funding from something which has been accused—rightly or wrongly—of misconduct. SGK has decided its in its best interests to withdraw support of organizations which might stink.

So, does PP stink? It doesn’t matter. SGK is following its own policies, as it should.

Was it politically motivated? SGK says “No.” Before you go dragging out words like “failed gubernatorial campaign,” remember that SGK supports cancer research, not the abortion and reproductive health businesses. So whether it’s politically motivated or not, it’s certainly in their right to drop funding for an organization which spent SGK’s money on services other than early cancer detection.

Is this a change in SGK’s core values? No. SGK’s mission statement reads as follows:

Promise: The Susan G. Komen for the Cure promise: to save lives and end breast cancer forever by empowering people, ensuring quality of care for all and energizing science to find the cures.

You’ll note that it does not say:

Promise: The Susan G. Komen for the Cure promise: to save lives and end breast cancer forever by empowering people, ensuring quality of care for all and energizing science to find the cures by funding Planned Parenthood.

So you can—and should—continue to support SGK if you wish to fund the continued fight against breast cancer.

And you should drop the outrage. Because I think there’s a potential benefit which is being overlooked—if SGK lives up to its promise of “ensuring quality of care for all,” that is.

PP has already said that the SGK funds are already well on their way towards being replaced—$400K or the $648K in less than 24 hours isn’t a bad fundraising record. They have also said that the services funded by that $648K will still be available, regardless.

So far, the PP patient population is covered. If SGK “ensur[es] quality of care for all,” then there’s a potential benefit—an upside!

If SGK lives up to its promise, it will put that $648K towards cancer prevention. That’s what you should be talking to SGK about. Not about defunding PP. Not about abortion. Not about political motivations. What you should be voicing is what to do with the money instead, insisting that it go where it should go: to the ground, where feet meet the street.

In the best-case scenario, SGK would arrange for vouchers for breast cancer screenings equivalent to what PP is providing to be distributed to clinics in the cities where the defunded PP offices are—preferably at clinics very near the PP offices. Put all $648K to work here. Since PP is already covering the people who would go to PP for help, that’s an awful lot of additional women who have access to care—and may be another segment of the population which would go to a clinic but wouldn’t set foot in a PP office.

In the “worst case,” SGK will dedicate the money to research or similar (not a bad thing, but not in keeping with the original mission of that $648K). In the worst case, nobody loses. In the best case, more women have access to breast cancer screenings.

Furthermore, if we assume that it was only some percentage of the SGK donation to PP which was going to breast cancer screenings in the first place, then SGK is actually focusing more on its core values. More of its money will be going towards breast cancer research or early detection and not to other PP services. (Again, the other PP services are not part of SGK’s core mission.) In the end, it’s a better use of SGK money, which you probably helped raise and wanted to see go towards fighting breast cancer in the first place.

So… if not now, then when should you be outraged?

— When SGK doesn’t restore funding to PP if/when PP is ever found not guilty of misconduct, provided SGK wants to use its funds in that manner.

— When SGK doesn’t put the funds into the hands of the people who need it most by funding screenings directly.

Then I’d expect to see this kind of outrage again.

But, until then, cool your jets. Please.