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Apple Investors Should Look at IBM in 1969

Apple Investors Should Look at IBM in 1969

By    |   Thursday, 28 January 2016 08:06 AM


The most dominant tech company in the world controls 72 percent of the market for both hardware and software.

Over the last seven years, its stock price has gained more than 350 percent and it is now the largest publicly traded company in the world when measured by market cap. The company even pays a dividend of 3.5 percent. This is a can’t miss stock.

Of course you might think I’m writing about Apple but Apple’s only gained 260 percent in the past seven years, pays a dividend of 2.1 percent and the market share of the iPhone is under 44 percent.

That first paragraph describes IBM in 1969, the year the Justice Department called the company a monopoly and began efforts to force a breakup of the company.

The future certainly looked bright for IBM in 1969 but investors would see the value of their investment decline by more than 11 percent over the next ten years. The S&P 500 would gain more than 17 percent over that time.

Apple bulls are arguing the company holds a large market share in the smart phone market and users will continue to display loyalty to the company in the future. In 1969, IBM bulls were making the exact same arguments.

Apple has had a great run, just like IBM did 50 years ago, but as investors it’s time to look for the next Apple instead of waiting for other investors to appreciate Apple’s accomplishments.

Those who continue to point to Apple’s past should look at IBM’s past and learn that size doesn’t really matter in investing.

Michael Carr, CMT, is a subadviser to a mutual fund family and a chartered market technician. To read more Michael Carr, CLICK HERE NOW.

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MichaelCarr
Apple has had a great run, just like IBM did 50 years ago, but as investors it’s time to look for the next Apple instead of waiting for other investors to appreciate Apple’s accomplishments.
apple, ibm, investors, stock
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2016-06-28
Thursday, 28 January 2016 08:06 AM
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