THE CASE FOR HOLDING GREAT STOCKS AND ADDING TO YOUR WINNERS, FOREVER.

The Product That Changed Everything

Quick little momentum study I conducted via a rudely constructed spread sheet yielded this little nugget:

If one had invested $500 in $AAPL at the top price it traded at in January 2001 ($11.25/per share – split adjusted), and then subsequently invested an additional $500 once per month – but only months that traded higher than your last purchase, and furthermore assuming you paid the top tick for the month (which would be highly unlikely, but this is just for comparison’s sake), here are the stats:

  • You would have made 37 unique investments since January 2001. 
  • You would have purchased a total of 418 shares
  • Your total cash invested would total $16,250 since January 2001
  • Your average price per share would be $38.88
  • Your investment at today’s close ($318.62) would be worth $133,183
For every Apple, there are 5000 stocks that won’t ever come close to matching this performance. However, it only takes one stock like this to have a serious positive effect on your long term investments. It’ll take lots of trial and error. And THE ONE will never be obvious in the beginning. But if you judiciously and consistently add to your winners and you stay at this game long enough, you’ll catch one. It only takes one.
Of course, the only way you would achieve these results is if you had an iron stomach and truly picked your investments with an eye towards holding them FOREVER. This may or may not even be prudent. I’m just feeling out some ideas for myself and the results of this test on Apple really got my attention.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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