Feb 2, 2014

Stock Buy Break it Down - 6, Apple and Blackberry Compared

If you bought $1,000 of Apple stock in the year 2000, it'd be worth $24,000 today.
If you bought $1,000 of Blackberry stock in 2007, it'd be worth $41 today.

It's important to eye the companies we invest in and sell shares before the scat hits the fan.  Knowing when to hold 'em and when to fold them is the stickiest part of managing your booty.  

The stock price of many companies tends to increase over time, but not always.  With Blackberry, your investment would be worth enough to buy a small cup of Starbucks.

Blackberry's stock chart is the inverse of Apple's.  The iPhone was introduced in 2007, beginning the end of BBRY.  You can see it in the chart, look at berry bleed in 2007 when Steve dropped the iPhone bomb:


Blackberry's management was deeply entrenched in phones with physical buttons and a weak app system that didn't allow users to download Angry Birds.  Companies must be agile, adaptable and willing to move on from old cash cows, else the death knell shall toll.

Corporations that used to order thousands of Blackberries at a time for employees soon switched to a bring-your-own-device gig.  And guess which device employees brought to work?  iPhones.  This is why Apple's stock price is doing decent.




Apple's share price is currently at $500.  If considering buying, it's important to see what other tech companies are competing and doing well.  

Ten years from now, Apple's share price could be $1,500.  
Or Apple could fail to innovate and share price sinks to $9, like Blackberry. 

Samsung is jabbing, so is Google.  Apple needs to continue inventing, creating new categories of devices and own the space.  Coming soon are the iWatch and improved Apple TV to pound the sledge on cable companies.

An innovation failure party is playing now at Sony and Nintendo.  They are not changing with the times and keeping up, so their stock is worth little compared to just a few years ago.  Nintendo's Wii U game console flopped, and they refuse to release Mario on iOS or Android.  This is what stubbornness looks like on their chart, ugly 'tendo since 2011:




I won't be surprised if over the course of 10 years, Tesla Motors will do to the traditional automakers what Apple did to Blackberry.  More than one of those large, crusty, rigid old companies that fail to adapt will become obsolete.  

If you bought $1,000 of General Motors stock before 2009, it'd be worth $0 today.

Any company can go from top of their game to bankrupt if they don't slither and give consumers what they want.    

-Beard

2 comments:

  1. Anonymous2/03/2014

    “What’s Good for General Motors Is Good for America”

    ReplyDelete
    Replies
    1. That one still makes me laugh.

      http://www.crossingwallstreet.com/archives/2009/06/whats-good-for-general-motors-is-good-for-america.html

      Delete

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