What's the maximum profit from buying/selling Apple stock?

[Doctor Q]

Investment companies like to tell us that if we had bought a certain stock at a certain time in the past, we would have millions today. You've seen these claims: If you bought into Cisco, Microsoft, Oracle, or some other well-known company in their early years, you'd have a fortune now.

Unless you have a crystal ball, it's not really relevant, but those "what ifs" are sometimes fun.

So how would it turn out for Apple? If you had magically bought and sold Apple stock at exactly the right times over the years, how much would you have made?

And if you bought and sold it at exactly the wrong times, how much would you have lost?

 

[iPhone 62S]

Considering how huge Apple is, and how much money they make, lots I guess... Or you could just watch Forrest Gump for a better idea

 

[whooleytoo]

I think pre 9/11, the stock price went from a low of around $12 up to $150 in quite a short period of time. I believe quite a few Apple execs took up stock options at around those prices, and made a tidy l'il profit out of it.

 

[Doctor Q]

I guess you could add up all stock increases to get the maximum earnings. That assume that you bought at the start of each rise and sold before each drop, meaning that you'd be buying and selling almost daily. I bet the total would be huge.

But that assumes there was no cost to these transactions, so I guess that's not very realistic. Those "if you'd bought..." stories are usually based on buying and holding, not constantly selling and rebuying the stock.

 

[yg17]

I think you'd be filthy rich. Once you get past a certain point, is there any real point to quantifying it in an exact number though? Is your life going to really change depending on whether you made 10 or 15 mil from Apple stock?

 

[thegoldenmackid]

The stock at one point in the 1980s was at 1.40ish, it never hit the magical $200 mark, but it got close in late 2007, like 199.83 (December 2007) close. There was also three splits that occurred and a couple of dividends.

So if you had bought stock in 1981 at 1.41 and sold it at the 199.83 (8 Shares because of the splits) you would sell it for 1,198.98. The IPO would not have generate the 850 times return because the IPO in the 1980s was at $22.00? I sold mine in 2007 at 184, bought it again in March, it had doubled a couple of weeks ago.

 

[yippy]

The stock at one point in the 1980s was at 1.40ish, it never hit the magical $200 mark, but it got close in late 2007, like 199.83 (December 2007) close. There was also three splits that occurred and a couple of dividends.

So if you had bought stock in 1981 at 1.41 and sold it at the 199.83 (8 Shares because of the splits) you would sell it for 1,198.98. The IPO would not have generate the 850 times return because the IPO in the 1980s was at $22.00? I sold mine in 2007 at 184, bought it again in March, it had doubled a couple of weeks ago.

Does that take into account stock splits? There were several of them over the years. Also, they gave out dividends for a few years in there as well.

 

[rdowns]

I'll let you know when I sell my shares.

My APPL shares have a cost basis of $11.24.

 

[thegoldenmackid]

Does that take into account stock splits? There were several of them over the years.

Yes
Split I: 1987, gives John Doe 2 Shares
Split II: 2000, gives John Doe 4 Shares
Split III: 2005, gives John Doe 8 shares

The dividends are minimal without getting into a confusing inflation formula given how many of them there were and that they were almost exclusively under $.05. When talking about a singular share or even eight shares, they are minimal, except when talking about something like Berkshire & Hathaway.

 

[Doctor Q]

I guess that's another reason those investment stories are silly. They tell you how much you would have now by investing $1000 in 1980, but that was in 1980 dollars so the comparison isn't fair.

What was that movie where somebody has a YAHOO license plate because they got a stock tip from the future?

 

[thegoldenmackid]

I guess that's another reason those investment stories are silly. They tell you how much you would have now by investing $1000 in 1980, but that was in 1980 dollars so the comparison isn't fair.

What was that movie where somebody has a YAHOO license plate because they got a stock tip from the future?

The question that I have is really if you bought in at the IPO, what would you have to sell it at today to make profit versus: inflation, 30 year bonds or a traditional bank account.

 

[belvdr]

What was that movie where somebody has a YAHOO license plate because they got a stock tip from the future?

The Benchwarmers

EDIT: Yeah, it was Frequency. I was thinking of the baseball game where the headlight gets broken, and it reminded me of The Benchwarmers.

 

[r.j.s]

What was that movie where somebody has a YAHOO license plate because they got a stock tip from the future?

Frequency?

Anyway, the whole going back and buying stock thing reminds me of this thread.

 

[MisterMe]

Considering how huge Apple is, and how much money they make, lots I guess... Or you could just watch Forrest Gump for a better idea

That has very little to do with it. You don't buy the company; you buy a fixed dollar amount of stock. If you buy $1000 worth of stock and that stock increases in value by 5%, then it is worth $1050. You made $50. However, the stock is just a ledger entry someplace until you sell it. If you sell it, then you must pay brokerage fees, capital gains taxes, and whatnot. If you bought the stock, then you also paid brokerage fees back then. The stock market is great way to go broke if you don't know what you are doing.

 

[Doctor Q]

The stock market is great way to go broke if you don't know what you are doing.

Some people manage to do well anyway. Maybe they are the same people who win in Las Vegas.

 

[sushi]

So if you had bought stock in 1981 at 1.41 and sold it at the 199.83 (8 Shares because of the splits) you would sell it for 1,198.98.

Apple was never at $1.41. The IPO was $22 per share. What you are looking at is the stock split adjusted price.

If you purchased a 1000 shares at the IPO you would have invested $22,000.

Apple has had 3 splits so those original shares would now be 8,000 shares.

At the the current price of $165, you would have $1,320,000, for a 5,900% gain.

Likewise, if you had done the same with Microsoft, which IPO'ed around $27 and has split 9 times (but not all were 2 for 1), you would have around $7 million.

The question that I have is really if you bought in at the IPO, what would you have to sell it at today to make profit versus: inflation, 30 year bonds or a traditional bank account.

Let's see:

If you invested 49,000 in Apple and Microsoft IPOs, you would have about $8 million.

If you took the same amount and put it in the stock market which has made an average of 9% since 1929, you would have around $660,000. (Using 1980 as a start point for both stocks.)

The bond market has lower returns over that timeframe.

So given the option of owning both Microsoft and Apple stock from the IPO vs. investing in the stock market, I would definitely prefer owning the two stocks.

Having said that, there is a flip side. You could have invested in two companies that went south and now you have nothing.

 

[Doctor Q]

Having said that, there is a flip side. You could have invested in two companies that went south and now you have nothing.

We don't hear those "worst investment you could have made" stories nearly as often.

 

[sushi]

We don't hear those "worst investment you could have made" stories nearly as often.

That's true.

A bunch of folks that I knew decided that day trading was the rage. At lunch, they would be bragging on how much they made. They would reluctantly, if at all, state their losses. Those that owned up to their losses, lost much more than they made.

Speaking of worst investments, Enron comes to mind. Knew some folks that put all of their eggs in one basket and lost everything.

 

[wako]

This is an interesting thread...


Funny thing is last year i was talking to a friend of mine. He had bought i think 50 shares of Apple stock right before we had started college, it was around 30 bucks then and was BEFORE the split (2:1). He ended up selling all of it as it seemed Apple had ran out of steam in 2006 and started to drop and sold all of his shares for about 90 bucks a piece. Not bad as he did hit bank. Unluckily for him though, 2007 would be the greatest year in history for Apple as it climbed to nearly 200 bucks a piece when he had sold. He says he doesnt regret anything but would still love the cash had he waited a bit longer

 

[iphones4evry1]

Doctor Q, if you were allowed to buy and sell and buy and sell, as you stated, then you would need to have a chart of detailed values of Apple's stock since their first IPO, and then integrate a buy/sell at every positive-slope price (and short sell on every negative slope) to determine your "maximum" profit possible. (FYI: large financial institutions have mainframe computers that buy and sell for them constantly throughout the day)
If you don't have a computer to buy/sell for you to create a "maximum" profit from integration, then you can use a Riemann Sum based on all buy/sell peaks (there are hundreds per day) that a human could actually have traded on. You will still end up with a very large number for your sum.

 

[MeliaArhrt]

APPL stock value

The stock at one point in the 1980s was at 1.40ish, it never hit the magical $200 mark, but it got close in late 2007, like 199.83 (December 2007) close. There was also three splits that occurred and a couple of dividends.

So if you had bought stock in 1981 at 1.41 and sold it at the 199.83 (8 Shares because of the splits) you would sell it for 1,198.98. The IPO would not have generate the 850 times return because the IPO in the 1980s was at $22.00? I sold mine in 2007 at 184, bought it again in March, it had doubled a couple of weeks ago.

We have one share of Apple stock purchased in 1982. Do you know its current value?

 

[miles01110]

We have one share of Apple stock purchased in 1982. Do you know its current value?

Google is your friend.

It's a little more complex than that, but it's kind of pointless to go into the particulars.