On the other hand, I imagine it'd be possible to put together a well-sanctioned group of accredited angel investors that would be able to do like a "YC round two financing" if need be. It'd be pretty interesting.
You could get around accredited investor rule by having the founder form a contract with each investor. "Whatever profit and earnings I make from startup A, you have xx% up until the year 20xx." In this way, there is no interference in the startup's balance sheet, although there should be some indication of a cash injection by the founder due to their relationship with the hackers.
Of course, that's never the case in real life. Imagine the time you would spend worrying about your investment and analyzing when it will go out or go down or when to exit, etc. If you convert that into money say $20/hr, is it still worth it to invest as suppose to buy the PowerBook?
Better yet compare it to the efficiency you have gained by having a PowerBook, or if you are a hacker, how much more you'd have learned by having a computer then. How would you even go about quantifying that?
Now before I get blasted for that comparison, obviously the lottery which is meant to be random is not exactly equivalent to an open market where information flows can mitigate some of the risk and provide indicators of good potential investments. But, investments are always a risk regardless especially as you are just getting out of school, have loans, and don't have much money you can afford to loose in bad investments.
Having graduated from grad school two years ago myself I've been doing the following: 1) In general I've been paying off my loans as quickly as possible as their interest rates are higher than the rates of returns I would see from putting money into the market. 2) Because the market was in a special place after grad school, I've temporarily violated my #1 rule and put about half of my spare money into retirement funds tied to the market as it was fairly obvious that the market would probably rebound strongly (which it did, yay!). 3) As the market's rebound levels off I'm redirecting more and more money back to my loans. 4) If you're going the route of retirement funds, invest in Roth IRAs before you're making too much to not be able to invest in them.
Once you have reduced your debts then take your money and go play in the market, but only with money you're willing to loose.
BTW - I realize that my current investment strategy is pretty conservative, as I'm attempting to experiment with living nearly debt free. I would love to hear alternative theories if there are any.
Looking at businesses that you are familiar with is a good starting point, but is -no substitute- for analyzing the numbers generated by the business. It's better for scuttlebutting, that is, visiting the stores and seeing how customer levels fluctuate. Are there more people visiting the Apple Store this year than last? That kind of thing.
A good case in point - I visited a hamburger chain, tasted the food and hated it. I thought the food was mediocre and the prices were too high. But, I decided to keep the stock anyway. Why? They had a new 32 year old investor who fought his way onto the board of directors, fired members of the old management team, made himself CEO, and cut expenditures to the bone. The result? They company steered clear of bankruptcy, became debt free, generated a 10% free cash flow yield, and has so far generated me an 80% return.
The thing is - had I just visited the restaurant, I probably wouldn't have noticed this. Red dots being removed from styrofoam cups (cost cutting), a picture of the new CEO in the restaurant (change in management), and sliced rather than cherry tomatoes in the salad (cost cutting) may have been indication of some change; but not enough to tell me about the big behind the scenes changes without the company's financials.
I actually know a great deal about trading, having done it professionally for a while. I only occasionally trade stocks now; I prefer angel investing...
The strategy is sound (and have a similar approach) but it makes sense only for a buy-and-hold approach. For the short term the quality of the company product doesn't really matter too much.
It sounds like it would be a good idea, but you'd actually have to take a look at each of the companies, and figure out exactly how much each contract with Apple is going to bring in relative to their current revenue streams.
I can't find when exactly Microsoft sold their shares, but it was sometime during 2003. Wolfram Alpha calculated the mean price of AAPL in 2003 was 9.26 (max 12.41 min 6.56), which is split-adjusted. The real price then would be 18.52 (mean). One split would have happened, so 36.4 million shares were owned by MSFT at the time of sale, so they sold for a mean of $674 million.
Someone check my math? It's 5am. It's difficult because a lot of the sources I used don't denote whether a price is split-adjusted or not, and Microsoft converted portions of stock at different times. It's a mess.
Maybe at the time Microsoft saw Apple as a dying company that would never recover from their early to mid-90s blunders, so throwing it a bone would have seemed like a no brainer at the time.
Oh, on reread - perhaps the stock split in 2003 would have been the second time?
I believe it is item "l"
Is apple over valued(or i guess i should say over priced) at its current market value. would you expect apple's value to go down relative to the market over the next year or so?
Rightly or wrongly AAPL is seen as a personal extension of SJs will. What happens when he leaves?
AAPL has also just had a HUGE run up. I'm not saying it's going to drop anytime soon, but you don't want to be the last one on the train.
AAPL makes premium products at premium prices. Has the overall market (jobs, financials, housing) really recovered enough that people in general are okay with spending again? Some statistics say no, but recent earnings say possibly.
All these are questions you need to answer for yourself. I would be a little gun shy today (either buying or shorting) because I think there are easier/less risky investments to be in right now.
What if's are always interesting in retrospect. I invested in apple last year at around the same time, made a small chunk of cash after a month, got out and never looked back. Had I left it there I'd be driving a bmw, assuming history would have unfolded exactly as it did.
[1] http://www.wolframalpha.com/input/?i=US+inflation+from+1997+...
But: only back to 1997?
What if I hadn't bought that Powerbook Duo 230 in late 1992? (~$2200 from Whole Earth Access in Berkeley, if I remember correctly.)
For example, Apple PowerBook G3 250 (Original/Kanga/3500): Price stated at $5700 released on 11/10/97. On 11/10/97 AAPL closed at $18.37/share. If you spent all $5700 you would have 310.3 shares (assume you can buy partial shares). On/around 6/5/2000 the stock split so you would now have 620ish shares. On/Around 3/28/05 stock split and you would have 1240ish shares. Multiple this by the stock price ~$270/share and you have ~$330,000. As someone already pointed out, you should not take into account inflation because the $330k is the amount you have have in the bank TODAY if you had bought the stock back on 11/10/97.
If you look at the stock chart you will see the price reports on 11/10/97 for AAPL is $4.59/share, this accounts for the split (It was actually $18.37 on that day, but divide by 4 because of the splits and you get $4.59). You can see http://finance.yahoo.com/q/hp?s=AAPL&a=10&b=1&c=... for details about this (You will notice a "close" column and "adjusted close" column. The "adjusted close" is what you will see on all the charts, but "close" was the actual close that day. This is done to avoid massive jumps on the charts that would make them less useful.
Hope that helps, and once again, this was a really cool thing to see, it really puts some things in perspective.
If you bought AAPL April $200 Call on Feb. 1 (at $10.20), you would made around 370% return. But obviously trading options is more risky, because you have to get both the direction and timing right.
I think it is a paradox every shareholder face from time to time.
In my case, I would have saved just a few hundred dollars, I got free AppleCare with my MacBook in 2008 and Apple has already replaced too many things, from my battery to fan to what not.
