Earlier this week, we wrote a story titled Apple’s Original Investors Are Now Among the 1%. As the headline suggests, we discussed stories of people who were early investors in what is now America’s largest company by market capitalization. Many regular people became millionaries due to this one investment.
We were contacted by a reader who wanted to tell his story. He wanted to remain anonymous, but we verified his details. The man was a Peace officer with an average income, who now is worth $6 million, due entirely to Apple Inc. (NASDAQ:AAPL) investment. We also asked some questions about why he decided to invest in Apple:
For the next 10 years, in CALPERS, nothing much happened. Either up or down, a total of $2000/ year. Basically, not much happened. When I was 50, a new plan was available, if we chose to contribute. It was called a PCRA (Personal Choice Retirement Account). I got in on the Dot Com thing, and staying only in mutual funds, rode it up ($933,000), and rode it down ($110,000 at the end). Each time I made a mistake, like riding the market down, I made a mental note to not make that particular mistake again. Keep this in mind for later…. early December, 2008, at the end of the worst financial year the World has known in my lifetime.
At the beginning of 2003, when I had hit my $110,000 bottom, it was an early day in January 2003. So, I searched to find the 10 best stocks from 2002. Chinese company Net Ease, NTES, was one of them. 15 minutes after my due diligence, putting most of the money into it, a young friend called to tell me about another company, which I began tracking, until mid-October. By that time, NTES had tripled, and this other company was the only one to keep pace with it. One day, the Chinese government cracked down on NTES, it dropped from a triple to a double, and I immediately got out. Foreign country, couldn’t trust it, and put everything into the other company…..Taser, TASR. I loaded up, and over the next 13 1/2 months it went from $200,000m through three splits, to $2.2 million. I’d been dragging my feet for a couple of months, about putting a protective stop on it. I’d never done that before. Finally put in the stop, January, 2005, and the next morning, the bottom dropped out. (Sheer coincidence or Act of God.) Bear in mind, I’d been watching it now, practically every day, for two years. I had accumulated 101,663 shares for myself, and 10,000 shares for my daughter.
I’d dodged a bullet, and my legs literally were shaking. (By this time, I hadbecome the single parent of my daughter, who was given to me in 1987). So, I was investing for her and for me. What I am in, she’s in, too. I decided to see what looked really interesting, and after a couple of days, looking at a handful of companies any way I could think of, I decided on good old Apple.
During this time, I’d talked other officers into getting into the Personal Choice accounts, and they got into Apple. In ’08, Apple went from about $198.50 a share in December, to a low of about $79.35 late November, ’08. I was losing about 200k a day for weeks at a time. Remembering way back to the Dot Com days, I sold everything I had, because I would not go below $1.5 million. It was like a real life game of Deal or No Deal, with Howie Mandel hosting. I tried a couple of tepid re-entries into Apple, finally thinking it was good to go, on April 9, 2009. Did it for my daughter, for whom there is a Roth IRA and a brokerage account. (She worked at a flower kiosk as a teen, got her first W-2 form. So I matched that, and she now had a Roth IRA. Today she is 31, and her “Apple” Roth IRA is worth $78,275.) As of close of business today, I have accumulated 10,501 shares in my own account, and it’s net worth is $5,963,029.
By this time, I have gotten a number of other officers, perhaps 20, to invest, and I buy Apple for five of them. The others buy Apple for themselves. Over it’s lifetime, Apple has averaged about 24% a year,