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What If You Bought Apple Stock Instead of The Apple Product?

written by John Chow on April 25, 2010

Make Money!

Back in November 11, 1997, Apple released the Apple PowerBook G3 250. The then state of the art notebook cost a whopping $5,700. Expensive yes, but it made you the envy (or laughing stock) of your friends for awhile. Today, a PowerBook G3 isn’t good for much more than a paperweight.

What if, instead of spending that $5,700 on a new Apple product in 1997, you put the money into Apple (AAPL) stock instead? If you did that, you wouldn’t have a paperweight today but you would be sitting on over $330,000 of Apple stock!

Kyle Conroy has put together a little graph showing what would have happened had you purchased the AAPL instead of the many products Apple launched over the years. It’s pretty fascinating stuff.

Last month, I made a post saying I purchased a large block of Apple shares when the iPad went on pre-order. I picked up those shares at an average price of $224.

Last Tuesday at 9AM, I purchased another block of AAPL at an average price of $245. At 5PM the same day, Apple announced record breaking earnings that blew everyone away. The next day, the stock went to $260. Apple closed at $270.83 on Friday.

While I am really happy Apple iPad owner, I am an ever happier Apple shareholder. My advice: buy the product and the stock!

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How far do you think Apple stocks will go? I love Apple, but I'm more worried about Steve's health. God bless him!

Unfortunately I was not that smart in 1997! What's the next big prediction John? Will Palm come back from the dead now that HP has bought them?

I think Apple stock is still a steal, measured by Price earning ratio.
Apple PE- 21
Google PE -23
By this metric apple is cheaper than Google. Another stock many miss is good old Microsoft it has a PE of 16

Factor in growth in earnings, profitability, and a couple dozen other metrics, and you might be on to something...

Ahhh....if I just had the foresight to buy Apple stock back in the day......(and I'd also need the cajones to hold it through the ups and downs, to where it's at today).

I recently saw a cartoon about investing the ongoing cost of an iphone, and ran the numbers for myself. If I went back to a normal cell plan, over the next 40 years until I retire, assuming an 8% long-term return, I'd have about $178,000.

Made me think, but only for a second. There's a lot to be said for quality of life, all the time the iphone saves me, and ideally the money I make from it because of how it allows me to run a business on the go.

Still, it's good to be aware of these things.

The trick with the stock market is to know when to sell, and to never lament the fact if you didn't hold on longer, because your profit has been banked, and stocks are notoriously fickle.

In the case of Apple it is still worth buying in, as the stock price is stil very much on the up here.

Buy a product is okay.. but buying a stock? well not possible at this early..

Waht's wrong with buying stocks? They are a good investment.

Man you a re becoming an investor. Good for you :)

It is amazing how far Apple has come and how high their stock has risen. Good post, wish I got into the Apple stock long ago to see some of that great return!

Don't buy a stock and then tell people to buy it. That's akin to pumping and dumping, and some might even say frontrunning (look up those terms if you need to), which are both illegal.

Don't be an idiot John. You don't want the SEC breathing down your neck.

A friend and I were talking about stock last month before the release of the iPad...he did by stock, about 30K of it...he's was a happy camper when those performance reports came out....I guess I should have jumped on it also...oh well...

Late last week I re-invested in some shares (I invest in the UK) and today the stock is up 3% already.

So I think it is a great idea what John is proposing to invest in companies that you have an affinity for.

It amazes me how things happen in life. I was just talking to my brother about this exact topic. I just bought an apple MacBook for my daughter and was thinking if only I would have bought some stock in apple when I first purchased the first gen. iMac, man it would have turned a nice profit. Thanks for the informative post.

Anthony Arias

How much you earned through those computers and macbook.

You should also consider that.

I am sure with the help of macbook you have earned quite lot than that.

:)

I think those have made many people monies :-)

Apple is famous in Europe and USA not in Asian countries.

HP, Acer and Dell is doing great business in Asia.

What a neat strategy. Although, unexpected things can happen and I suppose that's the risk with stocks. I've ways wanted to invest but remain reluctant at the same time. It doesn't seem apple is going anywhere forthe next 2 years.

I guess it just comes back to investing into companies that you personally use their products and believe in. Very much a Buffet style of investing (although Buffet would never invest into Apple).

Buffet didn't invest in Microsoft either at any time... even though he was/is best friends with Bill Gates. I think I read somewhere that Buffet doesn't like technology stocks period.

I really like what Peter Lynch has to say on tech stocks: that it's far better to invest in companies who benefit from technology than those who create it.

There are just too many unknowns to bet on the creators. There are many stories of a company's idea being successful, only to lose out to competitors in short order.

On the other hand, companies who use technology will only benefit, as their costs continue to drop.

I too believe that you can't put this statement into reality as it doesn't seems to have a wonderful track record.

True, ONLY if you bought it when it was the lowest. I bought bunch of Apple shares are $29 each in the 90s and they they dropped miserably for like 10 YEARS after that. Of course, if I kept it for more than 10 years, I would have made money but I lost about $10,000 so, I gave that up.

Same thing now, I wouldn't buy it, it's too high now.

Well, I bought at $224 and $245. Hardly the low point. And I think the stock has a ways to go yet. I may pick up another block on Monday.

Seems you gave up to early! How much would they now be worth if you have kept them? I think a lot of people think of stock as a quick method to get rich, but I think it is more about wisely - and longterm -investing your money into the right companies. John's last sentence "My advice: buy the product and the stock!" is actually good advice, as you buy shares of a company whose products you know and use. And if you buy the products because they are good, chances are, others do also. SY

You would be worth millions if you held till today.

I have some strong doubts about Apple stock being 'too high' right now. They're just dominating things right now and I think if you look at the direction they've been headed with itunes, iphone, the app store, and now the ipad... they have a ways to go before they've run their course.

But, all that being said, I have even more interest in the future of Facebook...

This is a bullshit statement because it forgoes the opportunity cost of what the Powerbook could have brought in, especially given 13 years to reach a meager $330k

I think it's more of a hypothetical situation, and just interesting to think about anyways ;)

Maybe so but a Powerbook wouldn't last 15 years. Well, it may but it wouldn't be good for much. As for opportunity cost, if you were really concern with that, you wouldn't have bought a Powerbook. :)

Hi John, what would you say about your fancy car? :)) it wont last 15 years ether. What about cap of coffee or something else we can brew at home. No doubt stocks are great But Powerbook was great at that time it WAS. COOL. Do you remember how much was the first cell phone? Thousands of dollars, huge but cool. Buy the way I need your personal advise, if you don't mind. Can I write you e-mail please? What I need is to choose good PPC or PPM but not Google. It has to be related to photography. What is the best in your opinion?
Model Allure - Where Beautiful Models Meet Professional Photographers.

I think that your logic works if you don't consider the Powerbook a tool. Consider the computer you used to start this blog. You wouldn't be making your monthly revenue unless you had a computer to start on. What was that ROI?