NewMexiKen treats much investing like I used to treat running — I like reading about it.
Anyway, I thought this from an article at Business Week was interesting.
Apple’s stock has been a huge wealth-generation machine over the last few years. If you had bought it five years ago when shares were worth about 7.50 on a split-adjusted basis, and held it until now, you’d be staring at a gain of more than 2,000% over five years. But that’s called investing. By contrast, betting on a short-term gain from a Steve Jobs keynote at Macworld has always been fraught with peril.
Yes, on the surface it might seem a good bet. Going back to 1999, Apple’s stock price has gained an average of 4.7% on the day of a Jobs keynote at the January edition of Macworld. But of those 10 occasions, only half have seen the stock rise, the biggest gain coming with last year’s unveiling of the iPhone. Developed in the strictest secrecy, the phone was widely expected to make its public debut that day. But with so little known about the device before it was revealed, iPhone mania pushed the stock up more than 8% that day.
But a one-day pop like that can create unreasonable expectations. In fact, if you exclude the iPhone spike from consideration, Apple’s stock price has dropped an average of 3.6% on keynote day since 1999.
For the record, Apple stock was down about 10% Tuesday and Wednesday to $159.64. It’s high late in December was around $200.
So, how does the Apple stock compare to various index funds over the same period?
What kind of dividend does it pay? That factor seems to be lost in most comments regarding stocks in general. I know somebody, who through reinvesting dividends over the years and never really being too concerned about the price per share, built quite a portfolio. For example, how does an increase in market value of more than 3000% each, on two relatively small initial stock purchases, sound?
Moreover, its not all about the per share price, its about selling the stock for a profit.
Lots of investors make lots of money and many lose lots of money and most are in between. I report on Apple because I like the company’s products, and I admire Steve Jobs’s approach to marketing.
When I was a little kid growing up around Detroit, September was always exciting because the new car models were introduced. Every dealer had searchlights and celebrities (albeit local celebrities) and balloons and hot dogs. The look of the cars was kept secret (they were delivered at night and kept hidden). It was an event!
Jobs has taken that approach to new heights with much success.
That said, identify what other major U.S. company’s stock has gone from $7.05 to $163.00 (as it is at the moment) in FIVE years (to the day). (Price adjusted for splits and dividends.) $10,000 five years ago is “worth” $231,205.67 today.
But, again, I report on Apple stock because Apple interests me as a company.
How about Google @ $614? How about Consol Energy Inc 732.95% in last five years. Peabody Energy Corp 719.76%, etc.
Jobs is fantastic at what he does, I agree. Apple’s marketing is at the highest level, absolutely.
I like the company too, although I don’t own any of their electronic devices, yet.
I liked a company a few years ago because I received such good service from them. I bought the stock and it more than doubled in the four years I owned it. Then, as I predicted, the company was purchased by a bigger company and I received 2.8 shares for every share I owned, and the price per share is still double what I paid.
Point being, go with your instincts.