I sure hope you don’t make the same kind of big investing mistake as my friend “Pete” did.
He passed on one of the greatest tech opportunities of all time.
I have actually have changed his name for our chat today.
That’s because, if he finds out I told you this anecdote, I’m sure he will be red-faced all day with extreme embarrassment.
You would feel the same way, too, if you turned your back on the chance to earn a return of a whopping 34,238.5%.
Those are the kinds of gains that would turn $10,000 into $3,433,850
Just let that sink in for a moment.
This is why I keep saying it only takes a handful of tech winners – and in some cases just one – to make you a millionaire, if you know where to look.
The Negative Noise
Now then, if you’ve followed along with me for even a short time, you know that at heart I am a rules-based investor. That’s why I developed a five-part system to screen for tech breakouts.
And the stock we’ve been talking about is a classic case of why you need to heed Rule No. 2, which says to “separate the signal from the noise“.
Indeed, you’d have a tough time finding a stock that generates more noise from Wall Street and Big Media than Apple Inc. (AAPL).
Back in the late 1990s, the so-called “in group” was predicting the firm’s imminent collapse. That includes my friend Pete.
At the time, he was working as a Wall Street analyst. His boss sent him to Cupertino to visit the Silicon Valley legend’s headquarters.
Pete left that visit unimpressed. He could not see how the company would overcome all the negative sentiment facing it at the time and didn’t recommend the stock.
I don’t have the exact date that Pete went there but as I recall, it was in the summer of 1997. Back then, the stock was in the cellar, trading for a split-adjusted price of less than a $1, and often even half that figure.
Wall Street couldn’t see the future of the firm following the disastrous reign of former CEO John Scully.
But all that changed on Sept. 15, 1997. That’s the day the late Steve Jobs came back to run Apple.
An Amazing Comeback
Here’s the thing. The day Apple made that announcement the stock closed at just 78 cents a share. It hit a split-adjusted closing high of $267.84 less than a month ago on Nov. 27.
Folks who wrote off Jobs’ return as nothing more than the result of a corporate power struggle missed the Big Picture. Jobs was a visionary leader when he co-founded Apple in 1976 and he never lost his knack for breakout products.
As we now know, the best was yet to come. Apple turned the music industry upside down four years after Jobs came back when the firm introduced the iPod portable music player.
In doing so, he wrote the playbook for Apple’s success. The iPod was not the first MP3 digital music player, but it certainly was the best.
Ditto the MacBook. It launched in 2006 and was a late entry in the laptop wars. But it was so advanced that it eventually outsold all other laptops.
And just a year later, Apple ushered in the mobile revolution with the now iconic iPhone.
Of course, there’s even more irony about Apple today. When Jobs died on Oct. 5, 2011, Wall Street and Big Media said Apple’s glory days were over.
A lot of folks made the same mistake my friend Pete did a decade earlier. They once again wrote off Apple as a bad investment.
This time, the rap on Apple was that CEO Tim Cook was no Steve Jobs. So, without that innovation on its side, the stock would hit the brakes.
Instead, it went from closing at a split-adjusted $54.04 the day Jobs died to a recent closing high of $267.84.
That’s a 395.6% return, not counting dividends.
But don’t worry. I still see plenty of upside ahead. I believe Apple is set to double from here in less than five years.
So, be sure to check back with me as I show you why there’s still a lot of money to be made on Apple.
Cheers and good investing,
Michael A. Robinson