Why AAPL is still the one stock to rule them all.
Spoiler Alert: Because it will become the world's greatest dividend stock.
AAPL still has lots of room to grow internationally and in corporate sales. It won't grow as fast as it has, and it's margins will shrink some.
Say it slows way down to a 15% (after inflation) annual growth rate for the next decade, 10% for the decade after that and 7% for the decade after that. Some will think this too optimistic, others, looking at the past decade will think it too conservative. I think it's as realistic an estimate as any.
You are 30 years old.
You plan to retire in 30 years.
You invest $12K in AAPL today.
In 30 years your AAPL stock, inflation-adjusted, is worth approximately $300K, based on the assumptions above.
And it's paying, realistically, a 4% dividend.
Yep, that's $12K a year, $1K a month, inflation-adjusted.
That's not enough to retire on, but, hey, it's a pretty nice chunk, all from that single $12K investment you made back in 2012.
In November 2006 I made the one big bet of my investing career. I determined that Apple was going to rule the world and I put 1/3 of my investible assets into AAPL. It wasn't much, unfortunately, but it was still a huge bet. They told me I was too late, after all, it had grown 10-fold in the past 7 years or so. Every few months since then some expert has written an article telling me why I should sell AAPL NOW! and take my profits. I did sell some of it at $400 in the name of diversification. Shouldn't have, but I'm hanging on to the rest forever. It's still my one buy and hold forever stock. It should be yours too.
Pretty soon I'll be making another huge bet, the second of my investing career. Probably 25% of my investible assets (a lot more than I had in '06). That will be the subject of my next blog.