Is Investing in Apple a Sin?

Apple gets marked down on moral ground.

Jan 8, 2014 at 3:00PM

Apple (NASDAQ:AAPL) hasn't been a stranger to analyst downgrades since margins began slipping and it began yielding market share to Android products. However, it was treated to one of its more colorful markdowns this week when Standpoint Research analyst Ronnie Moas knocked the stock on ethical concerns.

Moas downgraded the stock -- from hold to sell -- arguing that it's wrong for Apple to be paying its workers $2 an hour while it's hoarding away nearly $150 billion in cash and marketable securities. Moas argues:

They have workers who are doing back-breaking and eye-burning work in depressed states of mind and in many instances have already committed suicide... Instead of treating their employees like human beings, they are treated like animals. If it were not for their employees, Apple would not be where it is today. But instead of giving these people a better life, they give these people the bare minimum and defend this action with the argument that the wage is higher than the average there and in-line with what their competitors are paying.

To be fair, $2 an hour is roughly what Foxconn -- the Chinese contract manufacturer that makes smartphones for Apple and its rivals -- is shelling out to its employees. Under that argument, investors should be avoiding most of the leading makers of consumer electronics. After all, it's not just Apple. 

Sure, just because everybody's doing it doesn't make it right. That's not much of a counter to Moas' bearish thesis. However, Apple is a company that sells products worldwide. Why should it be obligated to piece its components together in the country with the most expensive labor rate?

It's not even just about the money. President Barack Obama pleaded with Steve Jobs to bring production back into this country at a dinner three years ago.  

"Those jobs aren't coming back," Jobs reportedly responded. Forget about how much more all smartphones would cost to assemble closer to home. Jobs argued that Asia offers shorter lead times and a greater pool of skilled factory workers. Money issues aside, it would take longer to roll out new products that were made domestically. 

Apple isn't Ebenezer Scrooge. Apple Store locations in this country pay far more than the other retailers in the same mall. Apple's iPhone kicked off the smartphone revolution that keeps many wireless carrier stores in business. 

Foxconn isn't perfect. Apple is no saint. However, it just seems wrong to be talking down the Cupertino giant because it makes too much money. 

There's certainly a place for social investing, and there are plenty of Fools around here who are passionate about that. However, the best social investing stock ideas come from companies where the practices result in stronger operations. You don't just buy into Chipotle Mexican Grill (NYSE:CMG) because of its "food with integrity" mantra. Chipotle's a winner because the queues are long with burrito-seeking fans and its high standards create tastier eats. Chipotle's thought process is admirable, but it's not the secret sauce behind years of consistently positive quarterly comps.  

One can always argue that Apple can do more, and that's probably a fair assessment of every single company. However, to downgrade a stock on moral grounds when outsourcing production to a more expensive contract manufacturer wouldn't necessarily result in a better product or improve consumer perception is just sloppy analysis.

Picking a winning stock for 2014 also isn't a sin
There's a huge difference between a good stock, and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple and Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers