Discover more from Kingswell
Apple Shakes Up iOS, Peter Lynch's First Stock, and BD Gets Automated
Happy Thursday and welcome to our new subscribers!
Subscribe to Kingswell for free!
Introducing iOS 16 📱
Apple’s reveal of the new iOS 16 mobile operating system went just about as expected. The rumors were right: the iPhone lock screen now features ultra-customizable widgets, different font options, and Live Activities notifications to help you stay up-to-date on sports games and Uber Eats food orders.
But the happiest Apple fans are probably those iPad power users who see the tablet as a potential laptop replacement. Alongside all the iPhone bells and whistles, Apple significantly overhauled iPadOS’s multitasking and windowing system to make it easier for pro users to juggle multiple open apps at once.
In particular, a new feature called Stage Manager allows users to resize and overlap windows — with other recently-opened apps floating off to one side for easy access. As if to drive home the “pro” nature of this addition, Stage Manager also comes with the new macOS Ventura, too.
This renewed focus on iPadOS comes at an opportune time for Apple. Back in April, the Cupertino-based company set a new record with $97.3 billion of revenue in Q2 2022. Every segment enjoyed significant growth — except for iPad.
iPhone: $50.5 billion (⬆️ 5.5%)
Services: $19.8 billion (⬆️ 17.3%)
Mac: $10.4 billion (⬆️ 14.6%)
Wearables, Home, & Accessories: $8.8 billion (⬆️ 12.4%)
iPad: $7.6 billion (⬇️ 2.1%)
Tim Cook brushed away concerns over the lagging sales as a result of “very significant supply constraints”. That’s likely true, but not exactly the full story. iPadOS’s relative lack of functionality, at least compared to the iPad’s power-packed hardware, has soured plenty of would-be purchasers — at least for the time being.
Apple hopes that iPadOS 16, with its emphasis on power users, can turn the tide back in iPad’s favor. Time will tell, but the early returns look promising.
Peter Lynch’s First Stock 🛩
If there were an investing version of Mount Rushmore, Peter Lynch would be on it. He racked up one of the most impressive records in stock market history during his time in charge of Fidelity’s Magellan mutual fund, earning a 29.2% annual return between 1977 and 1990.
When Lynch took over Magellan, the fund had $20 million in assets — and $14 billion when he left. Not bad.
Lynch combined dogged research — visiting hundreds of companies each year — with a common sense appreciation for opportunities right under his nose. He encouraged people to look around in their own lives, at their favorite products and companies, for investment ideas.
He bought stock in Dunkin’ Donuts because he liked the coffee there. And he made a killing on Hanes because his wife went crazy for L’eggs pantyhose when that came out.
(Reminder: Lynch NEVER recommended blindly buying stock in your favorite company. Just to use your personal preferences and observations as a jumping off point for further research.)
In 1963, though, Peter Lynch was just starting out. During his sophomore year in college, he purchased his first stock — Flying Tiger for $7 per share.
What research had the famously-thorough Lynch done that convinced him that this was the right choice?
As it turns out… Not much.
The young Lynch had read about how air freight was the next big thing and, since Flying Tiger was the first all-cargo airline, he jumped in. No deep dive into the company’s financials or the industry as a whole. Just shooting from the hip.
And, while such slipshod decision-making would doom us mere mortals, Lynch lucked out. With the Vietnam War picking up at just about the same time, the demand for shipping cargo and troops to Asia shot through the roof.
Flying Tiger rode that wave and zoomed up over $300 a share. Little by little, Lynch sold his shares to pay for graduate school. “I went to Wharton on a partial Flying Tiger scholarship,” he laughed.
They say it’s better to be lucky than good — and Peter Lynch’s first-ever stock purchase is testament to that. Perhaps this would be a better story if Lynch had lost his shirt, learned his lesson, and resolved to never buy another stock without the appropriate amount of research and consideration.
But I like this example because it shows that everyone, even one of the GOATs, makes mistakes when first starting out. Granted, they don’t usually pay off so handsomely…
Some guys have all the luck.
Becton Dickinson 💉🩺
Back in 1897, two traveling salesmen sat in a Texarkana railroad station. One noticed the other struggling to read his newspaper because of the intense Texas sun and got up to adjust the blinds for his fellow traveler. The two men, Maxwell Becton and Fairleigh Dickinson, struck up a conversation — and a medical empire was born.
Becton and Dickinson decided to team up to sell thermometers and syringes imported from Europe, before later expanding into manufacturing. BD (as the company is now known) steadily grew into a worldwide leader in medical devices.
But this staid company doesn’t find itself in the news very often. Analysts and media don’t typically swoon over the production of boring medical devices quite like they do for electric vehicles or streaming services.
BD investors don’t care. The company just recently attained the rank of Dividend King, meaning that it’s grown its annual dividend payment for fifty consecutive years. For those who value dividend income (myself included), Dividend Kings are the absolute cream of the crop.
Well, BD made a little news this week. The company announced that it will acquire Parata, a pharmacy automation firm, for $1.5 billion in an all-cash deal that should close by March 2023. Parata apparently creates “large, vending machine-like robots for dispensing, capping, and sorting pills — as well as software programs for tracking barcoded canisters”.
I’m no expert on the healthcare industry, so I’ll spare everyone my thoughts on this particular deal.
But every time I read about the advance of automation, I think back on the many other industries, professions, workforces, etc. irrevocably disrupted by new technologies and cheaper competition.
It’s all worked out pretty well in a macro sense. Life has never been better or more prosperous. And, let’s not forget, we’ve been down this road before. It wasn’t that long ago that virtually all economic activity revolved around farming. And then manufacturing. And then information/services.
At every turn, people (justifiably) worried about the future — and how a workforce geared to one particular task could possibly adapt. And, with the rise of automation and artificial intelligence, we once again find ourselves facing an uncertain future.
Like I said, from a zoomed-out perspective, these workforce upheavals turned out to be mostly beneficial for society. But it would be cruel to ignore the many men and women who saw their jobs shipped overseas; for whom it didn’t work out so well.
Just like it would be cruel to ignore those who will see their jobs automated out of existence.
In George Goodman’s The Roaring ‘80s, the author travels to Johnstown, Pennsylvania, to speak with unemployed steelworkers, bewildered Bethlehem Steel management, and others adversely affected by living in a town built around a dying industry. One of the more interesting (and inspirational) characters is an ex-monk, Carl Jung devotee dedicated to helping the devastated steelworkers adjust to the brave new world of globalization.
“What we have to do is to get people to see themselves in another way — we say put a new frame on yourself,” says [the ex-monk]. “A man may see himself as a millwright, an unemployed millwright, but he has a lot of other skills.”
“Our work is really healing serious depression, healing depressed energies and getting them going. Carl Jung said you don’t choose change, life steps up and challenges you and either you have the capacity to respond or not. So we’re talking about a transformation of the psyche; individuals have to believe they can transform themselves in midlife.”
Can they “reframe” themselves? It is a wonderfully American idea — pragmatism truly tested; if you have a funny face, learn to sing. We have always had, in this country, the idea that you should make something of yourself; now we have a generation of industrial workers who will be called on to make something else of themselves. A century ago, facing change of such magnitude, they might have lit out for the Territory; now the Territory is another state of mind. What we know is this: in an era of rapid change, many other Americans who now think themselves in secure and stable jobs may find themselves as lost and stunned as the steelworkers. And it may be the capacity of the spirit to respond that makes the difference.
Lots to ponder as automation continues its inexorable march.
If you enjoy my work, please hit the ❤️ below and share this post with anyone who might be interested (or on social media). Thank you!
Disclosure: This is not financial advice. I am not a financial advisor. Do your own research before making any investment decisions.