Today, for a great number of people it will be a strange day indeed. What will be at odds is what they perceive as rational; will be replaced with confusion in search of some form of rationale.
As of this writing the miracle story of Apple® told by every investment adviser or financial pundit across the media has now morphed into some version of a horror story to all that listened and literally – bought it.
What should be front and center is in the understanding on what I’ve written or spoken of before; “the issue of perceived as opposed to actual.” Those that have will enjoy no difficulty understanding what’s currently taking place.
For whatever the reasoning or rationale being given earlier, the “story” that has been Apple is no longer salable as it once was. Hence, if the story can’t be sold – the stock won’t be bought. Which means the stock now must and will be sold.
Fundamentals, P/E ratios, calls of “down right cheap” are all out the window. Why do I make such a claim? Well, here’s just a sample of what was stated at their earnings release. They sold a record number of iPhones®, made billions upon BILLIONS of dollars in profit. Increased their cash in the bank, and a few more amazing stats. These are of a magnitude near any corporation in the world would “die” for.
Yet, they didn’t meet some perceived Wall St. estimate of phones to be sold. They only sold….(wait for it) 47.8 million iPhones this quarter! Up from 37 million sold last quarter. That’s 10 million MORE phones than previous. Not less – more. Yet, the drum beat from the analyst community: “Oh man this company is toast – we were thinking more around 50 million.” Absolutely mind-boggling to anyone that understands business. (It’s more obvious to me by the day all the so-called “analysts” don’t.)
I mean really – are you kidding me? How can one not sit back and laugh at the absurdity of that type of thinking? (Unless you currently own Apple shares. I understand this is no laughing matter nor mean to rub salt.) Which brings me back to perception.
The following is an excerpt from my book contained within the article titled: Lessons We Can Learn From Wall Street
I contend if you know how to look at things you can gain insight that will bust many myths about people we hold dear. And many myths that might be holding you back in business. Here’s a quick point to ponder:
“People are more informed, rational, and will only pay for value.”
That is a myth and is shattered everyday the markets are open. People will pay on what they “perceive” is value. Not whether it is or not.
As much as the story has now changed for the likes of Apple. The exact opposite story is now going to be heralded from the rooftops, and played across every stage and screen known. “The stock market is back!”
Again, on the same day that shares of Apple have fallen like some experiment to prove Newton correct. The story and perception that Apple “was” the market; holding and keeping it up single-handedly from lower levels, that perception has now been dashed.
Remember when it was then the darling of the so-called “smart crowd” not all that long ago? (a few months actually) That viewpoint and perception is now seemingly as far back in time or history as Mr. Newton himself.
As its share price now plunges into Newton’s proverbial awaiting hand, The S&P has catapulted itself to breach back above 1500. A level thought to be nearly as impossible to ascertain as the apple falling toward Newton’s hand would be to reverse in mid free-fall only to re-attach itself to the tree. However, there it is!
Whether or not Apple’s share price falls further or rises is anyone’s guess. You may also couple that guess with whether the S&P will remain at these levels or not. You just need to realize that it is all – a guess. And those guesses are all based on what is perceived as the value. Not its true value. Regardless of price.
If there’s one thing of use that entrepreneurs of all stripes should take away from this real life example today it is this:
Perception is not everything. Many times – It’s the only thing.
If you perceive yourself – and tell yourself the story that you’re only worth an hourly stipend no matter what the rate. So to will your client perceive and believe the story of “that’s all your worth.”
If a client has a million dollar problem that takes you 5 minutes to solve should they: a) Only pay you on the time it took you to fix? Or, b) The perceived savings of value they’ll receive?
Always charge or ask for the perceived value working with you will deliver. i.e., Your bill should be for some percentage of the actual realized savings – irregardless of time. (Would you bill for 10% of hour at an hourly rate of $600. = $60.00?
Or would you bill at 10% of the perceived savings of $600K = $60,000.00?)
Don’t blame your customers for what they’re perceiving your value is to them. They perceive what you can demonstrate. And you should always be perceived as delivering value.
But, they won’t – if you don’t perceive, and believe it first.
© 2013 Mark St.Cyr