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Tuesday, October 13, 2020

What Would You Tell Your Younger Self?

 


 

Older me... to younger me..@1986.. "Go buy Microsoft, even if you have to beg borrow or steal, oh, and never sell it for a very long time"

 

 via Motley Fool 12/19

Patience and the right stock can lead to incredible results

Microsoft had its IPO on Mar. 13, 1986. The original trading price was $21. The stock split nine times over the years, with two of those being 3-for-2 splits. (A quick note about how splits work: In a typical 2-for-1 split, shareholders receive two shares for every one share they own. The stock price is then adjusted proportionally so that the value of the investment remains the same as before the split.)

If you had bought just one share of Microsoft at the IPO, you would now have 288 shares after all the splits. Those shares would be worth $44,505 at the current stock quote of $154.53.

A $5,000 investment would have purchased 238 shares at the IPO price. After the splits, you would now own 68,544 shares. Those shares would be worth $10,592,104. That's a compound annual return of about 25% per year, or a cumulative return of nearly 211,000%.

The dividends you would be earning every year are just as awesome. Microsoft paid its first quarterly dividend in 2004. The current payout is $0.51 per share each quarter. If you hadn't succumbed to the temptation to cash in your shares too early (as some of us do), you would be earning $34,957 in income every quarter, or $139,830 every year. <<< Read that again. aaaannnnd.. One more time to let it sink in.

 

25 comments:

  1. Yeah, well, if any of us could see the future we'd be rich.
    Not gonna lose any sleep over this...

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  2. My mother used to be in an investment club. This was back when Apple was in trouble, with a stock price of about $12. I told my mother that she and her club should be buying Apple stock. She said "Oh, we looked at it a couple weeks ago. It's not a good stock." I laughed. Many splits later, she could've had hundreds of thousands from a $1k investment. I was house-poor at the time, so I missed out. Could've retired in luxury in my 40's if I'd borrowed it. Oh well.

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  3. What would I tell my younger self?
    That's easy.
    SLOW THE FUCK DOWN YOU CRAZY BASTARD!!

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  4. Nobody ever bet enough on a winning horse.

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  5. I would have taken that job offer six years ago.

    Leigh
    Whitehall, NY

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  6. I actually did some of this but not with Microsoft (although I do own some Microsoft). For the last several years I've had more income from investments than from my salary but you MUST start early. I'd retire but I get a lot of intellectual engagement from my job. A friend of mine years ago got 3 shares of Berkshire Hathaway "A" at $7000/share and he was just a working family man. It took everything he could spare. That stock closed at $318969 per share today and he still has it.

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    Replies
    1. Your friend made a wise choice. Painful then but the payoff. Damn.

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  7. $5,000 in 1986 money is $11,874.09 today, not a bad way to outpace inflation.

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  8. But no one ever talks about buying a $100 worth of every IPO opportunity that comes along. What would be the results when all the duds are considered?

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    1. The dotcom boom ate a lot of people's money. Think back to the 90's when everything was dotcom. Most of them are gone or swallowed up. There is a lot of luck involved.

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    2. Ate my shirt on homegrocer.com ipo, but had me a little boeing/ibm/ge/Microsoft nest egg. Parents made my first investment at 3y.o. I retired at age 45 after telling my boss where he could put certain parts of his anatomy. Cashed out a bunch and built my dream house. I hated my parents back then but now......

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  9. I would tell myself to take advantage of the opportunities that present themselves. Being quiet and introverted do not pay. To follow the dream, whatever it may be, even if it sounds ludicrous. Take a step on the wild side, it keeps the blood flowing. To tell my Dad that I love him. To maintain a better relationship with my Mom.

    Well.......you asked!

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    Replies
    1. Both my parents are in their 80's now. Dad is failing mentally and Mom has physical ailments but is sharp as a tack. I talk to them every evening and always end the conversation with I love you.

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  10. I was thinking about the same thing yesterday. In the 80's or 90*s to old to remember my oldest brother was into the computers. He was talking about these computers with windows. Young and dumb it did not make sense to me. When I bought my first years later it was IBM with windows 3.1 32mghzt with both type of floppies. I understood that I better get on these things so my kids don't pass me up. I like to tinker and learn. Crashed it many times so long distance call to the brother and I had a boot disk. Learned a lot about DOS.

    Irish you will treasure those conversations. Mine are gone many years but I had the good fortune to spend many hours in the care of my in-laws who I loved dearly. It wasn't easy but treasure that time and conversations more than almost most any other time spent in my life.

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  11. I'd tell the younger me that pretty girls are just as easy to talk to as the plain ones.

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  12. My favorite investment story was told by my investments professor in college in the early 1970s. I was a Microbiology major, but had some slots to fill, so I took a couple of easy business courses -- accounting, investments, etc. The prof teaching the investments course was well known to be stunningly wealthy based on brilliant investments in the 1950s and 60s. So, he taught about all the metrics you use to value stocks, and the different kinds of investments and such, but there was no magic. So we asked him how *he* got so rich. He said that in WWII, he was captured early in the war and spent four years in a German POW camp. When he got out and was finally discharged in 1947 or 48 (apparently outprocessing took some time for these POWs), he basically had four and a half years of income that he didn't know what to do with. So, he just opened a paper and randomly chose about 10 stocks to invest in based almost entirely on name recognition -- IBM, GM, GE, etc. Then he just rode the 1960s boom, and walked away a zillionaire.

    His advice was simply to do a little reading, choose a strategy -- almost any strategy, follow it consistently, don't churn your money, don't do anything obviously stupid or try to make a quick buck, and wait 20 years.

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  13. 1000 shares of Apple bought in 2005 at 8.00/sh would be a couple million. 5 or 6 years ago, they would have been worth 1.4 mil. Too lazy to figure out the 2020 price.

    But yea, investing for the future would have been advice # 1 with No, Don't Smoke! @ #2.

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  14. All I gotta say about that, is,
    Shit Yeah!
    The woman I could have had,
    The jobs I could have had,
    and the peace I could have had!

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  15. I'd tell myself to not lose focus on goals because a pretty girl took interest in me. Go to Atlanta for that chemistry job; finish that internship at JPL. I guess mostly I would kick the sorry ass of my younger self.

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  16. Not exactly investment advice but something to think about....

    If we knew then, what we know now,
    We would have picked our own cotton.

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  17. I would have told myself to buy more ammo.

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  18. Advice to younger self; same that my Grandpa gave me (he fought in WWI) when I joined the Corps.

    "Boy, you remember when you go. Sometimes, some people just NEED to be shot in the face."

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