Forget about Apple's P-E ratio. If you want to know whether to buy or sell Apple shares, just gauge whether CEO Steve Jobs look gaunt or well-fed.
It's worth asking if there has ever been another major publicly traded company whose stock rose or fell based on the CEO's waistline. Wal-Mart did just fine when founder Sam Walton retired as CEO in 1988, and died of cancer in 1992. Exxon mints money regardless of who its CEO is. There hasn't been a Johnson at the helm of Johnson & Johnson since the 1960s, yet J&J is an exemplary Wall Street performer. Even Berkshire Hathaway, which is basically Warren Buffett's investing club, seems better insulated from the health of its CEO than Apple is. And Buffett is 78.
Jobs's health, of course, moves markets more than that of any other American. When Jobs issued a public "letter" recently saying that his observable weight loss - and decision not to attend the annual Macworld trade show - was due to a treatable hormone imbalance, investors bought more Apple stock. Shares rose more than 4 percent - on a down day for the markets.
Jobs, 53, purports to be embarrassed by the attention. "I’ve said more than I wanted to say, and all that I am going to say, about this," he concluded in his letter to the "Apple community." And he promised that he's concerned about the company, above all. "I will be the first one to step up and tell our Board of Directors if I can no longer continue to fulfill my duties as Apple’s CEO," he pledged.
So let's say you were running Apple, and you weren't motivated at all by ego or self-interest. You cared only about the company. Your stock was in the habit of rising and falling based on your own well-being - and even rumors about your well-being. You personally represented a single point of failure from which your company might not recover. At least that's what the markets thought.
A) Diversify the portfolio, so to speak, by making changes that assure the fate of the company doesn't rest completely on you.
B) Secretly hire a cast of lookalikes to impersonate you, in case something happens.
C) Adopt the Osama bin Laden telecommunications strategy and pre-record a bunch of vague, undated videos that can be aired at random points in the future, whether you're alive or not.
D) Continue the cult of personality on which the company depends, regardless of your health.
Obviously the responsible choice is A. Jobs's answer seems to be D, plus bits and pieces of the others.
He's addressed the succession question before, telling Fortune, for instance, that "my job is to make the whole executive team good enough to be successors." So Jobs has groomed a bunch of understudies to fight for his job once he's gone. Interesting start. He could go further, by relinquishing the CEO job to one of his qualified executives, while retaining multiple titles as Chairman and Chief Genius and Mr. Apple and The Guy on Stage in the Black Turtleneck.
But he hasn't. And Apple aficionados don't seem to mind. That's because Jobs's personal imprint on Apple products is what makes the company unique. But if Jobs is Apple, and vice versa, then why own the stock if the man is so fragile? And why believe Jobs when he says he'll function impartially as CEO on matters that affect his own future?
Oh, right - because Apple is different. And because Steve Jobs might just turn out to be immortal, his most brilliant innovation of all.