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John Shinal's Tech Investor Archives | Email alerts
Jan. 25, 2012, 12:48 p.m. EST
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By John Shinal
SAN FRANCISCO (MarketWatch) "” At least one group of Apple Inc. shareholders has an investment philosophy that would make Warren Buffett proud.
Like the Oracle of Omaha, they buy and hold, and are not quick-flip artists. The patience of those investors has been rewarded handsomely by Apple's /quotes/zigman/68270/quotes/nls/aapl AAPL +6.24% strong bull run, according to data from SigFig.com, a San Francisco start-up that helps users analyze and manage their investment portfolios.
Apple's first post-Jobs earnings report exceeds estimates, sending the stock up in overnight trading, Mark Gongloff reports. (Photo: AP)
Just more than a fifth (or 22%) of the 14,000 users of SigFig.com who own Apple shares bought them for $200 or less, says the company, which tracks $25 billion in accounts held at nearly 70 brokerage houses.
Based on the size of their positions, those 3,000 or so account holders had made at least a collective $16.4 million in profits as of Tuesday, on the eve of Apple's fourth-quarter earnings report.
That may not seem like that much, given that Apple's rise to a record of about $450 a share Wednesday is creating billions of dollars of additional wealth.
But the total equates to $5,300 per person, and a 125% return since March 2010, the last time Apple shares were trading below $200. The Nasdaq Composite Index /quotes/zigman/123127 COMP +1.14% is up 23% during the same time.
While holding a stock for just under two years may not impress Buffett, it's a more patient strategy than day-trading retail investors and professional traders usually employ.
For Apple shareholders, it's meant big money.
Perhaps this helps explain the presence of Laurene Powell Jobs, Steve Jobs's widow, at President Barack Obama's State of the Union speech Tuesday night. While Republicans and Democrats have been fighting about what's best for the U.S. economy "” tax cuts or fiscal stimulus "” Jobs and others like him were busy creating wealth (and jobs.)
Apple's rise, along with that of Google Inc. /quotes/zigman/68270/quotes/nls/aapl AAPL +6.24% over the past year and a raft of new tech IPOs help explain why Silicon Valley and other regions with a lot of tech workers are bouncing back from the recession better than the United States as a whole.
If you want huge returns, you have to pick the right stocks, of course. But timing is also key, and here's another interesting point from the SigFig data: A whopping 57% of its Apple investors paid at least $300 for their shares. That group has made a collective $50 million, even though these investors came late to the party, which means they've placed bigger bets than the longer-holding group. Apple last traded below $300 in October 2010.
/quotes/zigman/68270/quotes/nls/aapl AAPL 446.66, +26.25, +6.24%
Regular readers of this column will remember that I urged Apple investors to take some profits in May of last year, back when the stock hit $350. That call doesn't look great right now, obviously, especially with tax season fast approaching.
But hindsight is 20-20, and I hope those Johnny-come-latelies don't succumb to human nature and begin to load up even more on Apple shares at this level. It's rare indeed that an investor regrets selling a stock when it's trading at or near an all-time high, as Apple is now.
That brings me to one other thing that's interesting about SigFig.com's Apple holders: They don't put their profits at risk, nor take them off the table, during the volatile trading that usually accompanies an earnings report.
Only 5% of them say they either bought or sold Apple on an earnings day. Perhaps they're too busy tallying up their profits.
/quotes/zigman/68270/quotes/nls/aapl Add AAPL to portfolio AAPL Apple Inc. $ 446.66 +26.25 +6.24% Volume: 34.22M Jan. 25, 2012 4:00p var embeddedchart2053059580Chart = new EmbeddedChart('#embeddedchart2053059580', NormalChartStyleNoDecimals, 240, 80, '1dy', '5mi', null, null, null, 'US:AAPL'); jQuery.data($('#embeddedchart2053059580').get(0), 'embeddedchart', embeddedchart2053059580Chart); /quotes/zigman/123127 Add COMP to portfolio COMP NASDAQ Composite Index 2,818.31 +31.67 +1.14% Volume: 0.00 Jan. 25, 2012 5:30p var embeddedchart1186512883Chart = new EmbeddedChart('#embeddedchart1186512883', NormalChartStyleNoDecimals, 240, 80, '1dy', '5mi', null, null, null, 'US:COMP'); jQuery.data($('#embeddedchart1186512883').get(0), 'embeddedchart', embeddedchart1186512883Chart); /quotes/zigman/68270/quotes/nls/aapl Add AAPL to portfolio AAPL Apple Inc. $ 446.66 +26.25 +6.24% Volume: 34.22M Jan. 25, 2012 4:00p var embeddedchart2053059580Chart = new EmbeddedChart('#embeddedchart2053059580', NormalChartStyleNoDecimals, 240, 80, '1dy', '5mi', null, null, null, 'US:AAPL'); jQuery.data($('#embeddedchart2053059580').get(0), 'embeddedchart', embeddedchart2053059580Chart); //$(document).ready(function() { var storywidth = $('#mainstory').width(); var maxwidth = storywidth; $('#maincontent pre').each(function (index, value) { var thiswidth = $(value).width(); if (thiswidth > maxwidth) maxwidth = thiswidth; }); var offset = maxwidth - storywidth; if (offset > 0) { var margin = 13; var blanketwidth = $('#blanket').width(); var contentwidth = $('#maincontent').width(); $('#blanket').width(blanketwidth + offset + margin); $('#maincontent').width(contentwidth + offset + margin); $('#mainstory').width(storywidth + offset + margin); } //});John Shinal, a former technology editor of MarketWatch, is based in San Francisco.
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About John Shinal RSS News feedJohn Shinal is a former technology editor of MarketWatch. He also has covered Silicon Valley as a reporter for Bloomberg, an editor at Forbes.com and a... Expand
John Shinal is a former technology editor of MarketWatch. He also has covered Silicon Valley as a reporter for Bloomberg, an editor at Forbes.com and a correspondent for BusinessWeek magazine. More recently, Shinal was managing editor of Vator.tv, then a consultant and reporter for the Wall Street Journal Digital Network, where he helped launch the tech jobs Web site FINS.com in 2010. Collapse
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