Apple’s endowment

This is from last fall, and the specifics have changed slightly, but I liked this idea of what Apple could do with all its money. (Excluding, perhaps, the Facebook idea.)

They don’t need all that cash. But think of this in terms decades, in terms of the ultimate legacy of Steve Jobs. He is certainly the tech zeitgeist of our era. But he also has built Apple to survive for many, many years, many decades. What if they have $100 billion on the balance sheet in a year’s time, and, following the endowment model, they spend just 5% to 6% per year of that. That’s more than enough for them [to cover investment and R&D needs]. Now think about a couple years from now, when they have maybe $200 billion on the balance sheet. That would be maybe $10 billion to $12 billion per year they could spend. They have such an endowment if you will, so much money, it keeps them in the game forever. They could be swept away by some tech trend we can’t even imagine in the next 5 to 10 years. And if so, they could buy a company, or buy a collection of companies. It gives them optionality, in other words. If they decided social media is going to be a key part of things, they could buy Facebook. But it keeps them in the game like very few other tech companies.

Apple also manages the world’s largest hedge fund.

Apple’s endowment

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