Apple is going to announce its Q4 financial results on Oct. 11…
For the last six years, I’ve begun most mornings by reading technology news reports, opinions about products and companies, and analysts surveys of the hottest properties. If you didn’t know that I was a journalist, you might think I was a stock broker… not that there’s anything wrong with that.
But I’ve never really been compelled to invest in stocks directly. In 1999, I watched the dot-comers flaunt their soaring options while I collected a paycheck, put some in savings, and maintained my milk-toast 401K retirement account. Some of those dot-comers really got rich, others didn’t. Many of them have less put away than me.
But it’s a different time now, isn’t it? As I follow Apple’s upward trend — according to my Dashboard Stock Widget, Apple stock hit $55 a share this morning — I wonder about applying the knowledge that we have about this company to our own benefit. Not in a greedy way, but in a common sense way. I’m talking about the real research we do everyday about Apple’s products, fiscal health, and business plan. Isn’t that the same stuff that serious investors do?
It’s not hard to buy stock. Learning Perl is hard. You can open a Scottrade account for less than $500 and have it operative within a few days. So why, as technologists, do we seem so hesitant to discuss this side of the business?
Great observation
I have wondered about this matter myself for many years. I have shares in a milk-toast mutual fund and 401K, but I certainly don't invest according to my knowledge of technology trends.
Back in 1996 when Apple's stock was down to $12 I urged my then girlfriend--and now wife--to dig up $1000 and buy Apple stock. It didn't seem practical at the time, so we passed it by.
That same stock would be worth about $8,000 today.
Although I can afford to take some financial risks today, I still don't. Perhaps I, like yourself, saw the craziness of the 90's and decided it wasn't a practical approach. Maybe the way we approach our subject leads us to not take big risks.
Geek Culture
I think the fact that technologists don't talk about stock is that a company with a great stock price doesn't necessarily have a good product. A company can make money by making people think they need it, or even making people think they're going to make money. Generally, people interested in technology need something more substantial than market- or broker-droid speak to make a company interesting.
RE: Geek Culture
I know what you're driving at, but I don't think it's an "either/or" thing. I'm talking about meaningful analysis of a tech company using the type of knowledge that we (as technologists) have. Not the "market spin" that we often see.
RE: Great observation
It's curious though, isn't it? That empirical side of some of us that doesn't resonate with the buying and selling of stock. The paradox to me is that, in some ways we could be just as good at predicting of the future health of a tech company as financial analysts. In 2000, for example, I was pretty confident that Apple would find a way out of its mess. It's a company that often innovates best when its back is against the wall. Steve was willing to make the hard choices. He trimmed the product line and brought focus to the company. Of course, I had no idea at that time about the iTMS. But I had a good feeling they would come up with something. Plus, Apple had a lots of cash in the bank and good talent onboard.
might be foolish, but...
I have always put my money where my mouth is when it comes to investing. So far, it's paid off very nicely. The upswing is lead by Apple these days (I've held Apple stock for years because I am a fanboy), but I generally try to buy shares of companies that I believe in (i.e., I buy/use their products). Apple is first among them. I bought shares of Nokia when I bought my 3650 (at about $14, I think) and I bought Google because I think Google is great.
In general, I think that many people who know a bit about technology are in a good position to invest. As you've pointed out, most trades are internet-based and it's cheap to set up an account. So there's the HOW part of the equation. When it comes down to WHAT to invest in, I think it's pretty easy to just stick what you find cool and interesting and revolutionary (speaking of revolutionary, I'd keep an eye on NTDOF.PK) and hope that other people also think these companies are doing cool things.
You can also dig deeper and find companies that supply other companies. I do this with Apple all the time--the Nano is a huge hit, so it's logical to look to see who makes components for the Nano and see if they are publicly held. The company that makes flash memory for the Nano is PortalPlayer (PLAY) and I snatched some of that up right away and mentioned it to some friends. One of them wrote me last night and said that the crazy guy on CNBC (Jim Cramer) did a whole segment on this company last night!
Some people find investing boring, but I've always liked doing it for myself--and the internet makes it so easy.
My story
Although I wouldnīt consider myself a tech person - I work as a teacher in German business schools, though I took part in some business informatics lectures during my studies - I invested quite a bit in Apple stocks about 3 years ago. I sold the shares about two times since then and reinvested most of it later. The money has by now almost trippled. My reasons for investing were mainly the cool new products Apple released, especially OS X but also the G5 and powerbook laptops. Of course the ipod did its share as well.
So if you think you know a cool company with good products why not use your knowledge? Naturally you shouldnīt loose your head like people did in 2000. And better donīt listen to analysts too much...
RE: might be foolish, but...
Your point about finding the companies that supply the companies we know about is a terrific one. I'm curious though... since you enjoy managing your own investments, which is very cool, how often do you check-in with them? Monthly, weekly, hourly, every time you open Dashboard?
RE: My story
I have similar thoughts, and another one that I want to add. About once a year my father would go to Las Vegas to play blackjack. He was pretty good at it, but his approach was always to take X-amount of dollars to gamble with, then that was it. He used to tell me, never gamble, or invest, with money you can't afford to lose. I still think about that now and then.
Here's a Real Life Example
I noticed that there was a "sell off" today for tech stocks, Apple was included in this, going down 74 cents a share.
But, those of us in the business know that Apple announced a media event for Oct. 12 at the California Theater in San Jose. Seems to me this would be a time to hold on to Apple stock, not sell it, right? Especially a media event titled, "One More Thing..."
Purchased most of my computers this way!
I'm also a Apple fan boy... Bought some stock in 96 and sold the profits to buy a computer (PM8500). I did this with my iBook and flat panel G4 iMac too. I just bought a bunch of Apple stock earlier this year because I need to replace my rev 1 iBook. I'm up ~$2500 in profits, and I'm waiting to see what the next rev of 12" powerbook will be before I buy a new laptop. If you are patient, and take the money that you were going to use to buy a computer in the future, and buy the stock with it, you may subsidize your purchase or have a free computer. Of course stocks go down... So you may have to wait longer to purchase... Anyway, it is not a bad deal if you are patient and disciplined. Oh... Thank you Apple, for performing so well financially!
RE: might be foolish, but...
I check the portfolio daily--usually it's just a quick peek at Dashboard before i go to bed. Sometimes more often if things are volatile. More often if I've just bought, sold, or in an online discussion like this one (checked a lot today). Like you, I generally keep a pretty close eye on the market.
I'm a big believer in staying in a stock for the long-term, though. I did sell off a lot of Apple stock after the last split, but that was kind of a take the money and run moment. I'd already tripled up, and it's always good to have some cash on hand to diversify with, or pay off debt.
And I love that Cramer guy--PLAY was up over $2 today! That's 7%+ gain. Probably some very happy people over there, and it's a well-deserved bump.
Here's a Real Life Example
I learned several years ago to be a bit skeptical about my ability to predict at least the short-term motions of Apple stock, particularly around major announcements. Quite a few keynotes saw a relative run-up in stock price beforehand (typically based on rumors of amazing products), followed by a noticeable dip when investors realized that the real products weren't as earth-shattering as the rumors had implied. Then, the one time I actually tried to bank on that effect, the price went up.
Maybe it's just me.
RE: Here's a Real Life Example
It's definitely not just you...