Let us pretend for a moment that the year is 1997 and you’re in the market for a new laptop computer. You want the top-of-the-line product at the time, so you opt for the newly released Apple Computer PowerBook G3 250 laptop. This revolutionary piece of technology, which comes with a 250-megahertz processor and a whopping 5 gigabytes of storage, will set you back $5,700.
If you held onto that laptop until today you would probably be able to sell it on eBay for about $50.
Now imagine that instead of buying the Apple PowerBook in 1997, you decided to spend $5,700 on Apple stock. You would have done a little better. Indeed, today your Apple stock would be worth $330,563. Probably makes you think twice buying about that laptop.
Here’s the complete list.
Apple has a price to earnings ratio of infinity. They’ve never paid a dividend this century, or indicated that they will ever pay one.
With no prospect of any earning anything from holding this stock, what value does it have other than the possibility of finding someone gullible to pass it onto?
#1, it’s a growth stock, not an income stock.
I told my mom back in 1995 to buy stock in Apple.
She didn’t listen.
She’s still kicking herself.
…….and then imagine Steve Jobs died 3 months later…….
There is no value to hindsight.
I buy some land, say Manhattan, from some indians – since I don’t farm it it never pays a dividend so it’s worthless unless I can find some other sucker who wants to buy a bit of it.
A 40x increase, inflation adjusted.
Not bad. 10x better than gold. 7x better than silver.
Imagine if just a couple of thousand sheeple in Florida would have voted for Al Gore in Florida instead of Bush!! Wow.
This article doesn’t take into account the profit made from the use of said equipment. I know that a $5700 investment in equipment would earn me much more than $330,000 and in a lot less time than 13 years.
And Stock Certificates would clutter up your garage less !!!
I wanted to get 80k$ of apple at 12$ a share……. this was pre iphone….
And so let’s say everybody buys Apple stock instead of Apple products.
What would the stock be worth then?
@#11 Exactly.
Another of those wonderful articles designed to make the populace smack their collective foreheads and say “I shoulda… when I had the chance.” The fact is, you never had the chance. If you needed a laptop in 1997, say, you needed a LAPTOP. Not shares in a business that makes laptops. If, after you had your laptop, you then wanted shares in a company that makes laptops – provided you had the money – you would have bought some.
…and worse, those G3s were garbage hardware running an OS about as stable as Win 95. They looked cool, but we had a pile of them and they sucked. After those, buying Apple stock would have seemed stupid.
And by the way…was this the same timeframe as when Microsoft gave Apple a pile of cash?
The smart bet would be to spend an equal amount on both devices & stock. Get an iPad, buy 1 or 2 shares of AAPL.
The hard part is not cashing-in and riding out any bumps along the road.
Cheers!
—RASTER
I am omniscient! I can see the past! I can write a blog post for NY Times! I must be smarter than you!
If you had bought Sun stock in the early 90s instead of Sun hardware you would have seen a 25000% increase – assuming you sold it just before the dot com crash.
Not worth much now though.
What? No pedro telling us all the money he made on DEC?
I bought an Apple IIC and an Apple II GS along with a printer. If I had invested in the Company I’d instead I’d be vastly richer.
However I actually used the both of those machines to make me more productive saving me a lot of time I enjoyed using doing other things.
Each Apple laptop I’ve bought has brought me at least a 30x return, and a living.
I’ll never complain about my Apple purchases.
$330,563 invested today will be $5,000 five years after Jobs is dead, as TrippleB said.
Only a greater fool would buy apple now.
Apple is, and always has been, a hype machine. The Reality Distortion Field ™ Jobs emits is a real thing, in that, he can lie to people so effectively that most don’t care when they discover the truth.
Beautiful manipulative women, and Jobs, share this trait. Add Alan Greenspan to that list too.
What?
That’s the conventional wisdom. Be careful of conventional wisdom on companies like Apple, Amazon, and Google.
Apple wasn’t all that great. My dad bought us kids an Apple 2 in 1978. He saw how much he we liked it so when the IPO came, he bought 100 shares of AAPL. That dog did nothing for 18 years. Dad died in 2002 and at the recommendation of the broker, we sold it for about $26 or so, just about what he paid I think.
So we were supposed to wait 30 years for this dog to finally get hot?
Don’t get too wrapped up in all this coulda/shoulda/woulda junk. I tried investing in the tech stocks (WD/Intel/NSM/Cisco/MSFT) and hardly even broke even on this junk before I understood what the markets are really about.
Yeah, with this hindsight I would have bought the hot software companies instead of hardware makers and old line software, but who the hell knew who they were.
The stock market is just a means of transferring the capital of suckers (investors) to the those who skim (brokers), steal (fund mgrs) and manipulate (traders) the markets.
There is no get rich quick for the suckers. If you want some economic advice, get out of the markets, get out of the dollar, and put your cash into tangible things like land, silver, gold etc.
I have a web site where I research penny stocks and stocks under five dollars . I have many years of experience with these type of stocks. I can not believe that apple computers shares traded at just 5 dollars in 1998 the stock trades at 350 dollars a share today. their are many stocks trading today that once traded under 5 dollars. this is just one of many examples.
I would like to comment about apple computer. I cannot believe that apple computer trades at 400 dollars a share. The stock traded at 5 dollars a share in 1998. This goes to show you that their are stocks trading under five dollar even stocks trading under two dollars. Ane once in a very great while pink sheets stocks and over the counter bulletin board stocks that turn out to be really great buys.