2007 December 27

An investment lesson: 10 shares of Apple = $8,000

Rooting around in our safety deposit box recently, I came upon this Apple stock certificate from 1988. Even then I was an Apple fanboy and my wife went out and bought me 10 shares of Apple for roughly $440 and my infant daughter (now 19 years old and working at a local Apple store) gave it to me for father’s day.

With splits this has become 40 shares and, as of this writing, Apple’s stock price is hovering around $201 per share making this certificate worth just over $8,000. With it’s value I didn’t want it just lying around so I scanned it at 1200ppi (so I could more-or-less keep it) and deposited it at Schwab.

Before doing so I stopped at my daughter’s Apple store and showed it to her and said "thanks". She laughed as she accepted my thank you since she was a month old and it was really Mom that gave it. Still, it was a nice opportunity to demonstrate to her the power of investing — especially when you have a lot of time on your side like she does now — and since we’d had a conversation two days earlier about her consideration over whether or not she should leap into the Apple employee stock purchase program or not.

She’s a college student and every nickel counts so her reluctance is understandable. Waving goodbye to any money is tough (even when stock is discounted like ESPP programs do) since investing is something "out there in the future" for most younger people.

I hold many shares of Apple and have enjoyed its runup but a P/E of over 51 makes me really, really nervous. That said, Apple hasn’t even scratched the surface of increased Mac market share, new iPhones, rumored tablets (which I’m 98% convinced are coming) and what I’ll bet is a completely revamped AppleTV that facilitates video downloading and viewing on an HDTV. Lots of growth left and, barring any hiccup like Steve Jobs getting hit by a bus, there’s a lot of life left in the stock.

Apple + Presence and Location Awareness

What if you could take your mobile phone near a retail outlet and it would tell you the specials? Have your favorite cup of coffee waiting for you to pick it up? Personalize their offerings so that only the things you might like to buy would be presented to you? Allow the retailer to automatically know who the good and loyal customers are so you could be catered to?

Those are just some of the positives of Apple’s recent patent application discussed in this Forbes article.

The downsides? Too early to tell, but having an iPhone stolen would be one though there will undoubtedly be security implementations to avoid that problem. How about ordering something automatically — a cup of coffee or example — when today you had a hankering for tea?

My bigger concern is the perfect storm around presence and location awareness. Presence is when systems know where you are and that you’re online and/or your device(s) are capable of communicating with you (which is one reason why the Blackberry has done so well since YOU don’t have to check for email…it TELLS you when there’s a message). Location awareness is like the photo above when machines are aware of where you are geographically.

Both of these are huge for Google since every touch point where any of us could possibly receive and act on an ad is key to their strategy. Imagine you search for, say, an HDTV and the ads delivered to your phone or browser are specific to your location? Or what if you’re sitting in a Starbucks and corporate sends out a promotion while you’re physically there — and they know by your purchase history and interactions with them via your iPhone that you’re open to what’s in the promotion — and your phone vibrates with an SMS delivering the promo?

Slowly but surely we’re handing over more and more of ourselves and our privacy in exchange for what? I’ve handed over a lot and done so willingly (Gmail, Google Analytics, et al) but there is much I haven’t used (Picasa or YouTube with their complete ability to reuse your pics and video).

Lastly, I have to admit being sort of amused by Apple delivering this functionality since they’re the LEAST personalized and targeted company of their size on the planet. EVERYTHING that I receive from Apple is completely generic though they have my purchase history, machines and applications registered, and my credit history since I have an account at iTunes. Still puzzles me that they don’t bother to use any of that meaningfully.