I remember sitting in a meeting for vendors, at one of Apple's main competitors back in the 1990s, when the CEO was asked (in a Q&A session) about Apple as a competitor. The young and brash CEO chuckled and said that Apple was on the way out and if their management was rational they would give the cash and assets on hand back to the shareholders and turn out the lights. That was then....
Today the company run by that CEO has a current market cap of about $39 billion while Apple hit a record today with a market cap of $1.3 trillion. Apple, as a company is now worth nearly 40 times what that particular competitor is worth today. And, with just cash on hand, Apple could buy that company outright. It's an interesting turn of events. Apparently, beautifully designed products really do matter to a very large swath of consumers. So much for specsmanship and racing to the bottom with pricing.
So, in March of 2019 you could have bought say, 6,000 shares of Apple at $142 for around $852,000 and now, less than one year later, your investment would be worth $1,800,000, not even factoring in Apple's ongoing dividends to shareholders. That's a better return than one could expect from even a decent photography business!
Of course past results are no guarantee of future performance and what goes up usually comes back down. It's just an interesting time and I took note of it because one of my friends who used to be a photographer called me today to breathlessly talk about his good fortune. I wish we were all so clairvoyant? Strategic? ...... Lucky?
I just wish Apple would make a camera other than the ones in iPhones. I'd probably buy one...
7 comments:
Kirk, full disclosure I do own Apple Stock and plan on keeping it. But there is always a But, I worked for an organization who was on top of the world. That was in 2007, our Stock was in the 40’s and we could do no wrong. By 2009 the stock was down to nearly a dollar a share. This Market is way too hard to figure out. I have been taking profit were I can, and holding cash. My memory of 2008-2009 still remain in my conscious. I am sure at some point things will adjust, just not sure when. Happy New Year, and keep buying new phones.
In simple terms, a remarkable company. I’ve been Mac first/Windows second for the last twelve years. In phones, I’ve largely been Android first/iOS second. That may well change in 2020 - once 5G enabled, the current iPhones should be over competitive. Oddly, in the same period, Apple has gone from being a Veblen goods business to a consumer powerhouse.
Many stocks did better than Apple in 2019. AMD (from $17 to $46), Target, Chipotle, Xerox, AMAT, etc. Roku went from $30 to $134! Apple's increase was fueled by share buybacks, which were fueled by U.S. corporate tax cuts.
Given that the average return over the history of markets is 8-10% and the overall return for U.S. markets last year was around 30% I think an 86% return is just fine. And Apple pays a quarterly dividend. No investor I know of buys and holds only one stock so I imagine it would not be unusual for a savvy investor to have shares in many of or all of the stocks you mentioned. Many stocks actually lost money in 2019. Let's not be too quick to disparage Apple's achievements. Plus, I like their phones and computers...
If only I'd had a spare $852k laying around under the couch cushions... Alas!
Just by way of illustration, of course....
I bought Apple back in the early 90s at $13 a share. I was convinced that even if they went bust their IP and real estate was worth $40/share. I rode it to $75 and sold figuring there was scant upside from there......
Bought last year @$99 and told my kids to buy and hold as no matter the naysayers the sheer size and resource base made it a decent place to store your money.
Yeah, it won't go on forever but it is less likely to stink things up than other companies run by arrogant bros.
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