Thinking about buying a new iPad 2 or Powerbook?

Consider this table below, via Kyle Conroy. It shows what that purchase would have been worth if you had bought AAPL instead of their product and held it to today:

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Apple Product Release Date Original Price Stock Value Today
PowerBook G3 250 (3500) 1997-11-10 $5700 $330,563
Mac Server G3 266 Minitower 1998-03-02 $4499 $214,141
Mac Server G3 300 Minitower 1998-03-17 $4999 $205,444
Power Macintosh G3 266 Minitower 1997-11-10 $3000 $173,981
PowerBook G3 292 (Wallstreet) 1998-05-06 $4599 $164,320
Mac Server G3 233 Minitower 1998-03-02 $3349 $159,404
PowerBook G3 300 (PDQ – Late 1998) 1998-09-01 $4999 $158,720
Mac Server G3 333 Minitower 1998-09-01 $4599 $146,020
Power Macintosh G3 233 Desktop 1997-11-10 $2400 $139,185
Power Macintosh G3 233 Minitower 1997-11-10 $2400 $139,185
Power Macintosh G3 266 Desktop 1997-11-10 $2400 $139,185
PowerBook G3 266 (PDQ – Late 1998) 1998-09-01 $3499 $111,094
Mac Server G3 400 (Blue & White) 1999-01-05 $4999 $125,012
Mac Server G3 450 (Blue & White) 1999-06-01 $4999 $120,882
PowerBook G3 250 (Wallstreet) 1998-05-06 $2979 $106,438
Power Macintosh G3 300 Desktop 1998-03-17 $2750 $113,017
Power Macintosh G3 300 Minitower 1998-03-17 $2399 $98,592
PowerBook G3 233 (PDQ – Late 1998) 1998-09-01 $2799 $88,869
Mac Server G3 350 (Blue & White) 1999-01-05 $3299 $82,499
PowerBook G3 233 (Wallstreet) 1998-05-06 $2299 $82,142

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That is only the first 20; a huge table is at KYLE CONROY DOT COM

Of course, this doesn’t work with every company. You could have purchased stock in GM, Wang or Planet Hollywood instead of buying their products . . .

Category: Investing, Technology, Valuation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

19 Responses to “iPad? What If You Bought Apple Stock Instead?”

  1. JimRino says:

    If you bought Apple at the crash you’d be something like 3x.
    If you bought FORD you’d be something like 7x.
    That’s the definition of “risk premium”, yo?

  2. Greg0658 says:

    imo just about everybody in the MSM owns that stock .. impressive #s tho .. I wonder how much of my $s are in them (& Not by a direct investment)

  3. I would not be a buyer of Apple here

  4. Greg0658 says:

    ps – I take it the ” impressive #s” is based on a stock price freeze and everyone gets the frozen price to take the cash elsewhere for things like food & gas & cableTV

  5. on the tangent..

    BR,

    speaking of ‘Single Stock(s)’..

    what’s your take on http://www.onechicago.com/ Single Stock Futures?

  6. Not very familiar with it — seems like a big leverage play

  7. mk says:

    Isn’t this the whole point of a company? Creating products that return more value than they cost.

  8. BR,

    leverage is, indeed, engaged..

    thought this http://www.onechicago.com/wp-content/uploads/content2009/calculate-the-savings-with-single-stock-futures.pdf was a good discussion piece ‘on the Topic’..

    recent PR blab.. “OneChicago Reports February Volume

    Chicago, IL – March 3, 2011 – OneChicago, LLC (“OCX”), an equity finance exchange trading security futures, today reported that 177,910 security futures contracts traded at the exchange in February 2011.

    Open interest stood at 367,720 contracts at the end of February 2011.

    February Highlights

    • 159,997 EFPs and blocks were traded, representing more than $989 million in notional value, an increase of more than$449 million from January 2011 figures.
    • 30% of February 2011 month-end open interest was in OCX.NoDiv™ products. The OCX.NoDiv product suite was launched in October 2010 as an innovative equity finance tool which removes dividend risk from the security futures…”
    http://www.onechicago.com/?p=5628
    ~~

    also, this: “I would not be a buyer of Apple here”, strikes me as astute..

    this type of exercise, shown in the Post, sounds like ‘Bells Ringing’ (at a Top) ..

    as ex. AAPL v. AAPL SSF
    http://www.onechicago.com/calculator.php (may have to ‘select’ AAPL, and adjust parameters, as nec.)

  9. Patrick Neid says:

    The original share holders certainly had to wait from the original IPO in 1980. The stock was a huge money loser for over 20 years.

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    BR: That is not quite correct

    As this chart from 1980 to 1995 shows, AAPL outperformed at various times in its history.

    1981 – mid 83
    1984- late 87
    1988- 91

    Then from 2005 to present (see this), AAPL has outperformed the SPX by 3500%

  10. gremlin says:

    I finally sold aapl shares a few weeks ago at 345 that I had bought at around $8, unfortunately I didn’t buy a powerbook G5′s worth of aapl, just a few ipod’s worth of stock.

    it’s a good investment idea; not buy what you know, but buy stock in what you are buying.

  11. Bruman says:

    That’s fun! However, the stickler in me says you really ought to be comparing the mac to the opportunity cost of not having the mac. If you bought a computer, presumably you needed one to get stuff done. So how much income would you have lost by not being able to get stuff (particularly your professional stuff) done, possibly getting fired or passed over for promotion for low productivity, or losing a client or deal, or getting divorced because your spouse is upset that you spend all your time at the office using the computer there.

    You could get a less expensive computer, I suppose, and put the rest in AAPL stock. That would probably net you a better total return. But I like my macs.

    What you really want is a mac-AAPL swaption, but I bet those are pretty expensive.

    The other interesting thing I’ve learned from AAPL over time is that if you really like something, it pays to buy EARLY in the cycle. That’s different from other computers. The main reason is that AAPL keeps tight control over its pricing and doesn’t generally offer discounts until a new model appears. So if you buy late, you risk having your machine fall in value quickly, whereas buying early allows you to enjoy it longer. When interest rates are almost zero, now, that means that the time value of your money is very low, so you might as well enjoy your machine now.

    I like my iPad; but I haven’t seen the iPad 2 yet. My main draw to it is that it’s lighter.

  12. crutcher says:

    Reminds me of Einstein’s comment that compound interest is the most powerful force in the universe. You might not be so lucky picking stocks, but that table sure as hell makes the virtue of delayed gratification obvious….

  13. Becky Smith says:

    I agree with Patrick, for twenty years in the 80′s and 90′s stockholders money went down the you know what. I love Apple and their products work well. This is what happens when a company is doing all the right things. They will continue to get my money as long they keep producing quality products. I am on my way now to the Ipad 2. It will be my portable computer.

  14. forwhomthebelltolls says:

    This chart, in a way, sums up everything I consider to be most important in investing. Not AAPL per se, (I must admit to never having purchased one share). But rather buying investments versus material goods.

    I live in a nice home, but other than that, I don’t buy cars, boats, stereos, etc, etc. Every time my wife says, “Why don’t we get a…” I cut her off and say, “your right, this “extra: money would look good in a tax-free muni”.

    When I started out in the brokerage business I had a customer who was a plumber. He was on the verge of retirement and had a nice account with me. About $7 Million (in 1993 dollars). He said, “I know you people obsess about what to do with money to make it grow the fastest, but I’ll let you in on a secret. You don’t need to make 10% or 9 or 8 or even 7. You need to save your money, invest in something reasonably safe and just don’t spend it. Just buy what you need and the rest will fall into place”. 18 years later, I’ve yet to find a way to dispute him.

  15. forwhomthebelltolls,

    w/this: “…I’ve yet to find a way to dispute him…”, you are (not) trying, very, hard(?)

    see some of..

    http://www.shadowstats.com/

    http://globaleconomicanalysis.blogspot.com/2009/07/whats-real-cpi.html

    http://www.zealllc.com/2008/crbfalse.htm

  16. Greg0658 says:

    JoeWaterGlassPlumber “a secret … make 10% … save your money, invest .. and just don’t spend it” .. well – thats a deep subject sometimes wet sometimes dry .. money is just green TP and scratchy at that … turn it into something fun and/or nice to look at .. and since our American Dream economy is 70% of IT – I think I’m not alone …. but point taken there Bell .. like gold & my Norman Rockwell 4 Seasons plates hangin on the wall – ya can’t eat it

    Peter, Paul & Mary – If I Had A Hammer
    http://www.youtube.com/watch?v=lUKB3PxG-0E

  17. Patrick Neid says:

    Trading aside, holders of Apple stock had no gains for 18 years not the 20 I indicated. This chart which does not end in 1995 but 2000, the year I indicated, shows that Apple was a losing long term investment for 18 years.

    http://tinyurl.com/4m3xds6 — it’s your chart extended 5 more years. As someone who owned and traded Apple I thought I was losing my memory.

    The fact that Apple even exists is a miracle as companies go. Most companies with such poor performance for 20 years go out of business. Steve Jobs pulled a rabbit out his hat with the ipod. He rightly deserves all the credit.

  18. Mike in Nola says:

    Yeah, but you can’t send email or surf porn sites with a share of stock.

  19. harrold1 says:

    That is a fun chart to look at.

    The plumber has a $7M account, and you want to argue with his investment philosophy?

    I know the joke about the lawyer who complains to the plumber when he sees the bill, “Wow, that’s quite a bit more than I bill per hour”. And the plumber says, yeah, I didn’t bill that much when I was a lawyer either.

    But come on, a plumber with a $7M account. Give the guy some credit, he sure did something right.