Assuming you had the strength and fortitude to hold onto it through the Spindler and Amelio years…
;-)
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I bought a small amount in 2006. It’s grown by 5000% since then.
Had I put all my investments there, I’d be very comfortably retired today. But that would have been (and will always be) an incredibly dumb and risky decision.
Back in the mid-90s Apple stock reached a low of around $4 as I recall. Our local MUG* urged everyone to buy Apple stock at that low price. I was financially unable to do so at that time. Wish I had because it has done very well.
My question is how well? Apple stock has split many times and I haven’t been able to figure out how much that $4 stock is worth now. Can anyone here provide an answer?
Or maybe I don’t want to know…
*The group stopped having meetings a long time ago but they still maintain their mailing listserv and it sees a handful of messages each day.
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If you go to Yahoo Finance’s AAPL historic prices page and tell it to show all data for only stock splits, you find the following since 1990:
- 2:1 on June 21, 2000
- 2:1 on February 28, 2005
- 7:1 on June 9, 2014
- 4:1 on August 31, 2020.
So, a single $4 share purchased in the 90’s will today be 112 shares. At yesterday’s closing price of $177.73, that means those 112 shares are now worth $19,905.76.
So had you dropped $1000 on 250 shares then and didn’t chicken out over the last 30 years, you’d have about $5M today.
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Don’t forget, $1,000 from, say, 1995 needs to be adjusted for inflation.
So, using Inflation Calculator | Federal Reserve Bank of Minneapolis, 1,000 1995 dollars are about 2,000 2023 dollars.
That changes the non-adjusted 5,000x return to a 2,500x return.
:-)
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And if you reinvested the dividends?
Then there was the tech bubble collapse of 2000-2001, when Northern Telecom (Nortel) stock dropped so much that stock that had been worth $1000 a year earlier had dropped to being worth about $74. If you had instead invested that $1000 in Budweiser – the beer, not the stock – and lived in a state with a deposit law, you could have cashed in the empties for $78. And if you didn’t sell the Nortel stock in the next year or two, you would have lost everything when the company went bankrupt.
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According to a US investing site:
" Over the past 20 years, Apple shares have generated a total return of roughly 66,054% compared to a 349% total return for the S&P 500 during that stretch. Those gains translate to a 38.4% compound annual growth rate for Apple compared to a 7.8% CAGR for the S&P 500 in that time.
As a result, $10,000 in AAPL stock purchased 20 years ago would be worth about $6.62 million today, assuming reinvested dividends."
I have some investment in AAPL so hope the trend continues. I wish I’d bought them 30 years ago.
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I’d say one factor is that Berkshire has become more of a conglomerate company, with stock investing only one business out of many, than a portfolio manager now. Plus aren’t BRK’s Apple holdings due to Buffet’s two investment co-managers? If I recall correctly, they don’t get as much capital to play with as Warren.
I bought a hundred shares a long time ago and it has really grown in value. Normally I wouldn’t call Apple a dividend stock, but my average share price now puts the dividend at around 10%. (eTrade tells me my average cost so it is easy to calculate the effective dividend rate.)
David
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My basis price is $0.22. The current dividend rate is $0.24/share.
Lies, damn lies and statistics are fun some times. Be careful what you let yourself believe.
I bought a moderate amount at around $17/share in the 90s. A friend convinced me to do it because a) Apple had a lot of cash, enough to cover more than half the share price by his calculation, and b) we both obsessively tracked everything the company did anyway. “Buy what you know” was the idea.
So it’s done very well. The trick will be to convince myself to sell at some point. We sold some to help pay for a new kitchen, and now of course we wish we hadn’t. But in the long run that instinct will work against us.
I also could never convince myself to buy any additional shares, because it’s so much more expensive now. That shut me out of other gains.
So if I’ve learned one thing from this, its that I don’t have the temperament for stock trading. I mostly stick to low-cost indexed mutual funds.
Right around the time Steve Jobs returned, and shares were about $12, I told my dad to buy some Apple stock. He was in an investment club. Of course he didn’t listen, and I had no clue how to go about buying stock at that point. I did remind him years later that I had urged him to buy. I wish I’d pursued it myself but…
There’s investment and there’s speculation.
Investment (meaning making decisions with a high probability of producing long-term gains) means putting your money in a diversified portfolio (e.g. a dozen or so mutual funds and ETFs representing most investment categories) and periodic rebalancing (to whatever proportions you and your advisor agree on).
Speculation, on the other hand, is picking one company and guessing if it will go up or down. This is much more difficult to get right and is extremely risky, because you could lose everything (if the company folds) or even more than everything (if you sell short and the price rises dramatically).
Buying shares in any single company (even Apple) is, by its nature, speculative. It may be a good idea, but it is risky and should never be done with money you can’t afford to lose.
WRT selling a stock that has appreciated as much as Apple has done over the past 30 years, you should also keep the tax consequences in mind. Given the amount of appreciation, nearly all of the proceeds from the sale will be capital gain, and therefore be taxable.
You can’t avoid the taxes - they will come due in the year you sell the shares, but you may want to sell only a fraction of them in any given tax year, to avoid bumping yourself into a higher tax bracket. So I recommend reviewing your prior year taxes and maybe consult with a tax advisor to see what the right amount may be to avoid paying more than you have to.
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Yep. which is why I bought so little of it, back in the day. So I and other people may kick ourselves now that we didn’t buy much (or any) when it was cheap, but that’s just hindsight. It was probably the right decision at the time.
I like your distinction between speculation and investment. It resolves a lot.
And thanks for the tax advice! Don’t worry, we’re bound to get professional advice before we do anything major.
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It increased so much that basically all of it is capital gains. I used some of mine for a bathroom and now a kitchen remodel. I should put an iPod in the kitchen to remind us what paid for it.
On the other hand, my itoys.com bet yielded zippo.
Apple only introduced dividends in 2012 (and before that from 1988 to 1995). Long enough to talk about reinvesting them though. 
Given the skyrocketing increase in Apple’s stock starting in 2020, dividends from 2012 through 2019 would be worth a small fortune if they had been reinvested.
I bought {redacted} thousand dollars worth of Apple stock in the early 90’s. My broker pleaded with me to sell it in the late 90’s, when Apple was on the verge of bankruptcy. I refused. My logic was: “The stock is almost worthless now. If I lose it all, it won’t be much worse. So I might as well hang on and hope for the best.” Which is what I did. I held it all until now. Obviously, it turned out incredibly well. Just hope and dumb luck — and a once in a lifetime opportunity paid off.
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Just a few random comments:
- Something that can used to make a sell decision is if you have a better use for the proceeds than the underlying holding. “Better” does not have to be limited to expected return; it could be paying off high interest debt or making a major purchase without taking a loan, for example.
- Exiting positions with a loss can be useful in offsetting realized gains from other sales for tax purposes (at least in the US, I don’t know how other countries treat capital gains and losses).
- Even though AAPL does pay a dividend currently, I regard it as more of a capital gains stock than an income producing stock.
- I always try to put my gains into context by comparing them to a benchmark (for example, the MSCI World index, the NASDAQ-100 index, or the S&P 500 index) or to an alternate investment (for example, a similar company or another stock I was also considering buying at the time).
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