This morning, sleepless as I stared at the ceiling, I realized that Apple had now gone up a full 10,000% since I first bought it and recommended to my subscribers when Apple hit $703 earlier this week. When I later on got up, I started putting carrying out the mathematics and realizing precisely how next to difficult it truly is to visit a stock climb 10,000%.
You see, almost a decade ago, I purchased common share and long-dated call choices in a struggling tech company called Apple AAPL -0.25% that was nearly to roll out a fresh website for buying music called iTunes. Here’s a display screen shot of my trading diary from when I informed my subscribers for the very first time about buying Apple.
The time, as you can plainly see on there, was 4/29/2003. Here’s a graph of where Apple was trading when I entered that trade:
Apple was trading at $7.03 a share. It had about $8 per share in net cash. The company now has much more than $100 per share in net cash. That means that Apple’s market cap went up a lot more than 10x as much as its own stockpile of cash did, as investors pay premium for future growth.
I’ve been looking for the next Apple even as I’ve kept a big Apple position all these years. Currently, I think that Fusion-IO FIO +0.24% and Facebook FB +0.20% are two potential 1,000% gainers for me, but the fact is – I don’t know that I’ll ever catch a 10,000% move in a share in my own lifetime again, significantly less a 10,000% move around in significantly less than 10 years’ time.
A couple years ago, A column was compiled by me personally that i entitled, “Apple’s up 4,500% since We recommended it. What an who’s next right now? ” and in it, I wrote:
“It’s funny, however the same guys who wish death upon me now in my comments and who mock me around the Internet for thinking Apple can run to $1,000 by 2015 and that Google can get to $2,000 by 2020 are the same guys who were trashing me personally for such predictions if they were each 25% lower.”
Apple was trading of them costing only $300 at that time We wrote that. I later on moved that $1,000 price focus on up to 2013. And I still think that Apple will get there, as the platform the ongoing company has built its business upon and which I have so long written about, has arrive to fruition fully. Facebook, Amazon and baidu are creating their very own platforms and I very own all three of these too, but if each share were to move up just 1,000% from here, not 10,000%, their respective markets caps would be $400 billion. For those two stocks to go up the equivalent of what Apple has gone up since I first bought it and recommended it, they would each have a $4 trillion dollar market cap. Apple’s own marketplace cap right now, as the utmost valuable company during the past history of the earth, is $0.6 trillion. Had been Fusion-IO to move up 10,000% from here, it will be worthy of $200 billion, or even more than Cisco, HP, Dell, Nokia and yahoo – combined.
What also blows your brain is the realization that Apple’s still cheap here. I do think it can run to $1,000 in the next year or so, which is merely more than 30% from these levels. That would make Apple the first trillion dollar organization and it would still be cheap on forward earnings and net cash stability and yield at that time. But I believe I might go on and declare success if so when we had been to get near to $1,000.
I actually don’t think Apple may rise 10,000% from here. I’m uncertain how many stocks ever sold have risen 10,000% in a 10-year period. Perform any stocks are acquired by you within your own portfolio that you imagine could reasonably rise 10,000% in the next decade? No penny stocks, ok?