Let’s start with these Apple earnings because Block is frustrating me a lot, so I am going to put off talking about them. I have a large position in both Block and Apple (9% of portfolio for both), and recently, I have been getting crumpled up and flung into the woods by the market, so I was hopeful for these earnings, that they would release me from the woods of the market. They both…sort of did. I don’t know. Let’s start with a review of Apple’s earnings.

First, I should say that the market L-U-V-E-D these earnings. Apple jumped 7% on the day and positivity abounds, but I would say I am not quite as optimistic as many others. I love Apple, and I think it is one of the best companies in the world, but they are definitely facing some challenges. For one, their Chinese market keeps shrinking in the face of a CCP-fueled, resurgent Huawei. Beyond Huawei, the Vision Pro has not delivered as much as Apple was hoping for, Samsung reclaimed its spot as the world’s most popular iPhone, and being completely honest, Apple’s iPhone has been lacking innovation recently. These are challenges I believe Apple will face, but I am worried that Apple decided to spend $110 billion (the GDP of Kenya) on share buybacks. It just feels like financial manipulation that does not actually address the root cause of the issue.

The stock is up because of the buybacks but also because of the increased revenue projections for the third quarter centered around the iPad, Apple’s famous red-headed child. I also saw a lack of AI in these earnings that I would have liked to see. I am all-in on AI investment, and I would have rather some of that buyback money go to AI than this financial manipulation. I know Tim said we would get Apple AI in the Summer, but I’ll believe it when I see it. Also, ole’ Tim Cook said that Apple does not foresee a continued degradation of their Chinese sales, which I don’t know if I trust. I would be shocked if these China sales don’t continue to get worse.

The actual numbers were mediocre/bad. Sales were down 4.3% from this point last year, profit 2.2%. The services business (Apple TV, Music, App Store, etc.) had revenue grow 14%. Apple is projecting revenue increases by the next quarter of 3%-ish.

Overall, 4/10 quarter, saved only by these buybacks, which they know. Without these buybacks, 2/10 or 3/10. Pretty disappointed in Apple, but I’m not selling.

On to Block, who has decided to tweak out for some reason, but I would like to point out before I continue, stuff like this, the investigation, cryptocurrency, etc., are what you must deal with when you invest in a company like Block.

Anyway, let’s start with the numbers. Block posted revenue of $5.96 billion, $14 million above expectations, $2.09 billion in gross profit, up 22% from a year ago, net income of $472 million, 400% more than last year, Cash App reported $1.26 billion in gross profit, up 25% y/y, 57 million monthly transactions on Cash App, up 6% y/y, and layoffs have continued. That was a lot of numbers, but the point you should take away is that Block crushed earnings and this company is continuing to grow. Buuuuut, that pesky investigation with those whistleblowers will not stop bugging me.

This company has dealt with Cash App’s compliance problems for a while now, and I knew they were a problem, I just hoped that Cash App/Block had resolved them, but it seems that has not been the case. Compliance issues at Cash App seem extremely weak, and I am worried about adding to my position.

These earnings and this quarter without the investigation is an 8/10, with the investigation hanging over, a 5/10. They cancel each other out. My heart tells me to buy more, but my brain is telling me no.

These earnings were great, the executive team seems to be crushing it (except for Cash App’s compliance issues), and this company seems to be on the right track, but these accursed investigations will not stop bugging me. WHY JACK DORSEY, WHYYYYYYYY?