What if you bought apple shares instead of a G4 in 2003?

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jef
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What if you bought apple shares instead of a G4 in 2003?

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G-Money
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by G-Money »

Interesting, I guess. Not sure I know anyone who buys a computer as part of a long-term investment portfolio.

I definitely got the wrong answer. I had wrongly assumed this was what was meant by "G4": http://en.m.wikipedia.org/wiki/Gulfstream_IV
Don't assume I know what I'm talking about.
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nisiprius
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by nisiprius »

"When [Seymour Cray] was told that Apple Computer had just bought a Cray to help design the next Apple Macintosh, Cray commented that he had just bought a Macintosh to design the next Cray."

What if you would have created a supercomputer if only you'd had the G4? But instead you were designing it, on a pc, that was like beep beep beep beep, like half of your supercomputer was gone.. and I was like — it devoured your supercomputer. And it was a really good supercomputer. And then you had to design it again and had to do it fast, so it wasn’t as good?
Last edited by nisiprius on Mon May 27, 2013 5:39 pm, edited 1 time in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
gatsby11
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by gatsby11 »

I can't stand these sorts of articles. What if you'd bought these Powerball numbers on Saturday instead of a coffee:

02-06-19-21-27, Powerball: 25
Estimated jackpot: $50 million
Estimated rate of return: 16,666,666.67% (take that index funds!)

http://www.seattlepi.com/lottery/articl ... 549222.php


Hindsight is 20/20. Yes, if I could know beforehand which stock would be the best performing in the entire world over the next decade I'd dump my entire paycheck for a year into purchasing it, in addition to working four extra jobs to scrape together more money for extra shares. I can't, so I think I'll buy a computer and live my life.
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by clevername »

nisiprius wrote:"When [Seymour Cray] was told that Apple Computer had just bought a Cray to help design the next Apple Macintosh, Cray commented that he had just bought a Macintosh to design the next Cray."

What if you would have created a supercomputer if only you'd had the G4? But instead you were designing it, on a pc, that was like beep beep beep beep, like half of your supercomputer was gone.. and I was like — it devoured your supercomputer. And it was a really good supercomputer. And then you had to write it again and had to do it fast, so it wasn’t as good?
That's kind of...a bummer :/

Thanks for the nostalgia, I loved that ad! (Ellen Feiss's Apple switch commercial for anyone confused)
menlo
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by menlo »

nisiprius wrote:What if you would have created a supercomputer if only you'd had the G4? But instead you were designing it, on a pc, that was like beep beep beep beep, like half of your supercomputer was gone.. and I was like — it devoured your supercomputer. And it was a really good supercomputer. And then you had to design it again and had to do it fast, so it wasn’t as good?
Excellent Ellen Feiss reference. I had completely forgotten about those ads.
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hansp
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by hansp »

This is always the reminder to me about how bad I am at timing stocks (and what pushed me to go completely to the index/passive side).

I owned Apple stock in early 2003. First investment I had purchased on my own in Oct 2000 & July 2002. Split adjusted purchase prices were $13 & $7.50 / share...

Finally in the beginning of 2003, I decided that 2+ years of losses/no gain was enough and sold it all @ $7.25/share (33% loss of my total investment, fortunately I'd only put in $1500 total). Not quite the absolute bottom which came in April/May @ $6.25/share, but close enough. From there, Mac sales started to increase and then the iPod really started taking off.. the rest is history. Today they'd be worth ~ $60K and would have been worth almost $100K at the peak. Just your typical loss of a 100X gain! However, the good news is that I sold the Apple to put it in w/ other $$ into my initial Vanguard investments. I may have missed out on Apple, but I've gained a much more diversified and less risky portfolio.
It also serves as a reminder if I ever get tempted to speculate on something that "My ability to time the market is *#@% "

I also console myself that my office mate at the time bought into Apple right around the time I was selling, but then sold out when he'd made ~ 1.5-2X gain. His reason at the time? "I went to Macworld and wasn't impressed w/ the new round of Mac hardware". He would then later admit (~ 6-8 months later) "I was right about the Macs, but I failed to take into account the iPod effect...."

I also remind myself that even if I hadn't sold in early 2003, I wouldn't have ridden it to the top. No way would I have had the fortitude to ride a single stock up through the significant gyrations it made on its way to 700.
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by jdb »

Interesting post. Late last year we got delivery of new Tesla Model S. My wife and I were both impressed with vehicle, exceeded expectations (still does). My wife said "remember in the 1980's when we bought our first Apple computer (I think a IIE or something like that) for our first son? We should have invested equal amount in Apple stock and held it till today. This reminds me of that". So to make long story short we ended up six months ago investing money in Tesla stock approx. equivalent to car purchase price, needless to say best short term stock investment we have ever made. Stock may (probably?) crash and burn but we are long term holders since now have drunk the Kool Aid, in fact have order in for Model X in 2015.
Default User BR
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by Default User BR »

jdb wrote:Interesting post. Late last year we got delivery of new Tesla Model S. My wife and I were both impressed with vehicle, exceeded expectations (still does). My wife said "remember in the 1980's when we bought our first Apple computer (I think a IIE or something like that) for our first son? We should have invested equal amount in Apple stock and held it till today..
One of the most popular computers in those early days was Commodore. Eventually, through some bad management and heavy competition, they went bankrupt.

Buying stock because you like one product a company makes is gambling.


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Re: What if you bought apple shares instead of a G4 in 2003?

Post by Tortoise »

I wish I had bought more of my company's stock instead of buying two motorcycles in 1986. I would have been able to retire when the company was bought out in 2008. Would'a. could'a, should'a...
"Always do right. This will gratify some people, and astonish the rest." --Mark Twain
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by StormShadow »

jef wrote:Take a guess before looking.


http://thenextweb.com/shareables/2013/0 ... 4-in-2003/
When my father bought us an Apple IIe for $1,400 back in 1984 he could have instead purchased Apple IPO at $3.83/share. Would be equivalent to $161,361.88 today. And if he had the foresight to sell at the peak in September 2012, he'd pocket $255,907.57.

Oh well... the IIe was a lot of fun though! :D
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by Default User BR »

You can always play what-if games. One of the best performing stocks over the last 30 years has been Home Depot. $10k invested in 1983, dividends reinvested, would be worth $1.85 million. "It's obvious! That was the growth industry!!" you might think. But back then there was heavy competition. Would there have been any reason to favor Home Depot over HQ or Builder's Square? Both of those ended in bankruptcy. Even the main surviving competitor, Lowe's, has had more modest growth (although still handily beating the S&P 500).


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Re: What if you bought apple shares instead of a G4 in 2003?

Post by Garco »

An interesting premise. I bought a 17" Powerbook G4 for my daughter upon her graduation from college in 2003. It lasted a few years. But not nearly as long as her college loans remained to be paid off. Could have paid them off in a few years if I'd have been willing to sell the stock. Would have been a bad exchange at that time.
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by nisiprius »

Oh, if only, if only, I had bought Exidy Sorceror stock in 1978... :twisted:
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by Jfet »

What if you had bought an Apple I back in 1976 for $666.66?

Today it would be worth over $600,000

http://www.imore.com/working-apple-1-se ... an-auction


How you like them apples?
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by StormShadow »

Jfet wrote:What if you had bought an Apple I back in 1976 for $666.66?

Today it would be worth over $600,000

http://www.imore.com/working-apple-1-se ... an-auction

How you like them apples?
It has a tape drive! I love it!
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by Valuethinker »

jdb wrote:Interesting post. Late last year we got delivery of new Tesla Model S. My wife and I were both impressed with vehicle, exceeded expectations (still does). My wife said "remember in the 1980's when we bought our first Apple computer (I think a IIE or something like that) for our first son? We should have invested equal amount in Apple stock and held it till today. This reminds me of that". So to make long story short we ended up six months ago investing money in Tesla stock approx. equivalent to car purchase price, needless to say best short term stock investment we have ever made. Stock may (probably?) crash and burn but we are long term holders since now have drunk the Kool Aid, in fact have order in for Model X in 2015.
I really think this is a false analogy.

Cars are not a proprietary standard. If Tesla is ultra successful, other car companies will produce cars which are electrically powered, drive on the right hand side of the road (or the left), have 2 or 4 seats, a trunk, a windscreen, safety belts, etc. And anyone with a driver's license will be able to drive one, just like they can the Tesla.

That's very different from the Apple vertical integration of iphone, ipad, Mac etc.

Buy the product, not the stock.
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by jdb »

Valuethinker wrote:by Valuethinker » Wed May 29, 2013 5:12 pm

I really think this is a false analogy.

Cars are not a proprietary standard. If Tesla is ultra successful, other car companies will produce cars which are electrically powered, drive on the right hand side of the road (or the left), have 2 or 4 seats, a trunk, a windscreen, safety belts, etc. And anyone with a driver's license will be able to drive one, just like they can the Tesla.

That's very different from the Apple vertical integration of iphone, ipad, Mac etc.

Buy the product, not the stock.
I agree with Valuethinker for once. Buy (or lease) the Tesla Model S, you will not be disappointed. Not touting the stock, certainly not at current price almost 3X my purchase price six months ago. OTOH, Tesla Motors does have vertical production, much less reliant on outsourcing than ICE producers, and lots of proprietary patents and has developed a game changing product, best car ever produced in certain opinions, including mine and Consumer Reports. Could there be a little analogy to a certain small start up computer company in Northern California many years ago? Only time will tell. In meantime the product is great and very enjoyable.
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by Valuethinker »

jdb wrote:
Valuethinker wrote:by Valuethinker » Wed May 29, 2013 5:12 pm

I really think this is a false analogy.

Cars are not a proprietary standard. If Tesla is ultra successful, other car companies will produce cars which are electrically powered, drive on the right hand side of the road (or the left), have 2 or 4 seats, a trunk, a windscreen, safety belts, etc. And anyone with a driver's license will be able to drive one, just like they can the Tesla.

That's very different from the Apple vertical integration of iphone, ipad, Mac etc.

Buy the product, not the stock.
I agree with Valuethinker for once. Buy (or lease) the Tesla Model S, you will not be disappointed. Not touting the stock, certainly not at current price almost 3X my purchase price six months ago. OTOH, Tesla Motors does have vertical production, much less reliant on outsourcing than ICE producers, and lots of proprietary patents and has developed a game changing product, best car ever produced in certain opinions, including mine and Consumer Reports. Could there be a little analogy to a certain small start up computer company in Northern California many years ago? Only time will tell. In meantime the product is great and very enjoyable.
JDB

That *is* interesting-- you make a very good point. And I believe that electric cars are disruptive to the auto industry, in the way the PC disrupted the PC and the minicomputer industry (who, today, remembers DEC, once the world's 2nd largest computer company).

BUT it's hard to believe the industry incumbents are completely asleep at the switch. This is a change in propulsive technology, rather than a completely new entity.

I recognize the record of industry incumbents in adapting to disruptive change is poor, but they have read the same books and studies I have, Clay Christensen, etc.

Given the scale of capital in a world that produces . 100m cars pa? it's hard for me to believe that an upstart can simply carve out that market.

When Apple entered the PC market it didn't exist, it was fast growin in a fast growing market. It was, and in fact still is, an also-ran niche player in PCs, and many other proprietary formats died out, it's simply that it entered the smartphone and tablet markets early and has near dominant market shares, plus proprietary standards and vertical integration (control over Apps, itunes etc).
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by Valuethinker »

StormShadow wrote:
Jfet wrote:What if you had bought an Apple I back in 1976 for $666.66?

Today it would be worth over $600,000

http://www.imore.com/working-apple-1-se ... an-auction

How you like them apples?
It has a tape drive! I love it!
I vaguely remember there were less than 1000 Apple 1s produced?

If you had bought Altair or SouthWest Technical Products at that time, would it be as valuable?

Apple II was really their mass market machine.
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by Valuethinker »

jef wrote:Take a guess before looking.


http://thenextweb.com/shareables/2013/0 ... 4-in-2003/
Funny I kick myself for not buying Google at $80 post IPO, because that was a company with a business model, a clear future, streets ahead of its competitors. Also the IPO was seriously botched, structurally, leading to underpricing.

Apple? There seemed to be so much chance in it. There were already MP3 players. We didn't know about the iphone and the ipad. The PCs are still marginal (growing market share, and important to profits, but still sub 10% market share I believe?).
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Re: What if you bought apple shares instead of a G4 in 2003?

Post by nisiprius »

Valuethinker wrote:I vaguely remember there were less than 1000 Apple 1s produced?

If you had bought Altair or SouthWest Technical Products at that time, would it be as valuable?

Apple II was really their mass market machine.
Collectibles, collectibles, who knows? But an eBay seller has three Altairs listed at asking prices of $1,500, $3,000, and $4,500. The latter two are claimed to be in "museum condition," but all of them have the disclaimer "Computer items are vintage. Minimal testing has been done. They are not offered as perfect, as they are up to 35 years old. Early microcomputers were known to have faults and require technical knowledge to repair or operate properly. These items are sold to collectors and technical experts in AS-IS condition." In eBay-speak, "I'm no expert, I've never plugged it in and I don't know whether it works" usually means "doesn't work." I believe Altairs were sold as kits, had badly engineered busses--or, more properly, didn't have engineered busses at all, the signal pins were just brought out directly to the backplane--and often didn't work.

(The amazing thing about the personal computer revolution was that it was driven by hobbyists without formal engineering background who didn't know what couldn't be done and just went ahead and did it. The first time I saw an Apple ][ I was astonished that it didn't have a fan, and thought "What brilliant thermal engineers they must have." Then the guy who owned one said that he always ran his with the lid off because it would overheat if you had expansion cards in it. They didn't have brilliant thermal engineers, they didn't know that you needed thermal engineers. The Apple ][ owed a lot of its success to being a cheap computer that had "color" graphics, but from an electronic signal point of view the color signals were a joke--a sort of exercise in the adventitious behavior of what an NTSC monitor will display when fed a completely-non-NTSC signal. Apple weasel-worded this. They said something like "designed to work with monitors that will accept NTSC signals," and an astonishing number of people misread that to mean "produces NTSC signals.")

I don't see any SWTP machines being offered, but the same seller who lists the Altairs lists a "Very Rare IMSAI 8080 S-100 Computer Removed from Computer Rack System Works!" for a "Buy It Now" price of $2,000 Not too impressive, since assembled IMSAIs sold for $621 in 1976 = $2,537 today, meaning a loss of real value.

But bringing collectibles into it fudges the issue. The real question is, if you are an early adopter of a product and you just love it, should you buy stock in the company at the same time?

The Peter Lynch "invest in what you know" philosophy is hugely appealing, and it is awfully tempting to suppose that the direct end-user of a product has access to information that might be missed by analysts reading the numbers but never directly using the product. Conversely, I keep scratching my head over Facebook because I keep saying "but it just isn't very good." But I suspect "picking stocks through consumer experience" is delusional.

One issue is that when you really love a product or a service, what that tends to mean is that you really love the management policy and corporate culture that gave rise to it, and that's subject to change. I'd love to read something sometime about the sociology of institutional identity. "Apple" doesn't have that much continuity; Steve Jobs' "Apple" was identifiably different from Gil Amelio's "Apple" or Michael Spindler's "Apple" or John Sculley's "Apple." Michael Spindler's Apple licenses Mac clones, Steve Jobs' Apple doesn't.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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