Buying Apple stock instead of products
In 2001, a PowerBook G4 would have set you back $3500. Suppose instead that you had purchased $3500 in Apple stock instead of the computer…that stock would now be worth about $110,000. Even an original iPod’s worth in AAPL ($399) would be worth almost $12,000 today. (via)
Posts like this have been floating around the blogosphere over the past week as they’ve reached new highs. But the “I’d have X if I invested Y in Z” is a stupid game to play. It’s just not how it works. If you invested money in AAPL in the past, you’d probably have sold it when the gains became attractive. Do you think you’d really have had the balls to hold the position after you doubled your money? It’s unlikely.
You can play this game with basically any stock, especially after the ridiculous decline and correction in 2008-09. If you put $1000 in Ford (F) in November 2008, you’d have $9000 now. Bank of America would have turned $1000 in March 2009 to $3500 today. But in both situation’s, you’d probably have done what I did and sold for 10-20% gains, because as they say, “Bulls make money, Bears make money, Pigs get slaughtered.”
I’m glad everyone is realizing you can make money in the stock market, (you might want to try Covestor Investment Management), but the backtesting game is dumb.
