In the 21st century Apple has become the home of many millionaire employees, and the stock’s metric rise has made millionaires of many investors.
If you had invested your life savings in Apple back in the day, maybe it would be worth the $7-billion that one site says it is.
Invest, Sit, And Be Rich
A home run stock investment returns about 10 times the original investment. Any investor who bought Apple stock in the 1970s, and then sat on the stock for the next 30 years or so, would have a return to talk about.
Gump and his friend, Lieutenant Dan, invested profits from their Bubba Gump Shrimp Company in “some kind of fruit company.”
That would be Apple Computer, Inc. and the investment would have taken place back in the 1970s when Apple was just getting off the ground.
How much could Forrest Gump make from an investment in Apple’s fledgling company? An easy-to-calculate and plausible $100,000 investment, accounting for stock splits, and not selling any of the stock, would be worth just under $7-billion ($6,980,702,880, to be exact).
There are a few problems with using Gump as the example investor. First, in the movie, Forrest Gump’s letter from Apple, which acknowledged his investment, was dated 1975, but Apple wasn’t even incorporated until 1977.
Still, it’s possible to get rich on Apple Inc even in the modern era after Apple became a successful company. The same investment would have been worth over $42-million in 1980 when Apple went public.
Sitting on a stock and exercising patience can bring about a reward. By 1987 the same investment would have been worth over $49-million. By 1994 it was worth over $91-million.
As of a few weeks ago, Fancy Dress Costumes’ calculations put Gump’s original investment at just under $7-billion. As of today, the amount is well over $7-billion and growing.
The only problem with the story is the timing and the amount and the fact that it’s all fiction. But the story is a fun read and a wonderful chart which shows Apple’s historic stock rise from around 2005.
The moral of the story? Find a good product and you’re likely to find a good company that made it. Invest in the good company and sit on the stock as long as the company makes good products.