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Buy Apple Because It Does Not Participate in Silicon Valley's Insanity

Tickers in this article: AAPL FB

NEW YORK ( TheStreet) --

Or not. " @ppearlman: people will look back and note how $AAPL was not nearly aggresive enough relative to $FB & $GOOG.

Howard Lindzon (@howardlindzon) Feb. 19 at 04:42 PM

Or not . Sing it, sister.

Before we get into why Apple will not regret not following in Facebook's or Google's footsteps, let's just lay it on the line like it is.

The 16 or 19 or whatever billion dollar deal where Facebook bought WhatsApp only exposes what amounts to a shell game in Silicon Valley.

I'll "invest" in this "company" and then this other "company" will go public and then this company over here will buy that company while this other company buys this company and then we'll "invest" in this awesome new company that Jiz Rock started because we really need in on this deal because, of course, somewhere down the line somebody will buy his company or he'll take it public ...

And we'll all make out like pigs moving money around in these hollow financial transactions while the jock sniffers on Twitter and in the media take what we do so seriously they legitimize it.

Great gig if you can get it. And you wonder why these albeit misguided souls in San Francisco have resorted to smashing shuttle bus windows.

Apple has no reason to participate in this game. And I'm not sure why anybody of sound and sane mind and body would imply that it should.

Do the people who think Apple should have purchased YouTube or Instagram or WhatsApp even understand its business?

Apple derives a vast majority of its revenue and killer margins by selling hardware.

People buy multiple Apple devices and regularly upgrade them because they work. As computing devices and such they're near flawless so, after you have made your first Apple purchase, it becomes pretty much a no-brainer that you'll make more. Not only do they work, but they're beautiful and they're cool .

Every so often we see stats that some huge percentage of Internet traffic -- often e-commerce activity -- takes place on Apple devices. This means people not only use and love Apple hardware, but Apple -- thanks to its intuitive and thoughtful user interfaces -- makes it easy for people to do stuff via iPhone, iPad and Macbook. These devices combine to sell more units than all Windows PCs. That's because, again, they work.

So that's Apple's bread and butter. It is the area where it dominates. There's no logical case to make that says Tim Cook should veer, even a little, from that business model. At least not with billions of dollars. With a tiny fraction of Apple's cash ... sure, go ahead, knock yourself out.