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

Apple Stock Certificate for 10 Shares

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.

UPDATE on August 14, 2013: in intraday trading today Apple is at nearly $500/share. At that $500 mark those 40 shares would equal $10,000.