This is an article I’ve written with the hypothetical scenario where I had over 5 billion USD in 1982, I was strategically developed as I am now and I was aged 34:
I was born in 1982. Around this time, Sony was making headlines with home electronics and I remember having Sony stereos and walkmen around the house. Stock price as about USD 6.931 price adjusted and I may have entered this stock.
In the late 80’s my interests were in an Intel 386 SX powered computer that my father bought that ran on DOS. This processor was launched in 1985. By late 1985 Sony’s share value was at 9.204. Intel’s share value was at 0.594 and I may have swapped Sony stock for Intel stock. Microsoft who produced DOS could also be bought at USD 0.164 in late 1986.
I’m not sure that I would recognize software as being more valuable if I was aged 34 in 1986 today so I’ll assume that I’d value Intel as the brand of the moment in 1985 but I might have shied away from it since it had a much higher share price in 1983.
Hindsight is 20 20 so making predictions on what would have been the path I’d have chosen in 1985 if I was aged 34 would appear obvious to me today but not certain in 1985. I certainly stopped spending time with my Sony appliances and more time on the 386 SX. Reading the right magazines would have opened my eyes to the value of software the way that reading the right internet articles made me realize that Jeff Bezo is today’s Steve Jobs!
Hindsight also says that I would have avoided the Sony stock since it peaked in mid 1981 and went downhill in 1982. Intel also peaked in mid 1981 but had a better recover in 1982 when it was priced at USD 0.373. Would I have been smart enough to choose Intel over Sony in 1982, I don’t really know as I am not sure how popular computers were in 1982!
In the early 90’s Microsoft Windows became a popular operating system. Windows 3.1 launched in 1992 and Intel’s share price in late 1992 was 2.719. Microsoft’s share price was at 2.727.
Fast forward to 2003 when iTunes for Windows was launched turning Apple into a cross-platform, media giant. In late 2003, Microsoft stocks were valued at 25.11 while Apple stocks were valued at 1.494.
Today in 2017, I use Amazon for most of my entertainment use. I used Amazon prime video more than itunes this month. Apple stock was valued at 140.68 a few days ago while Amazon was valued at 760.59. Today, I would buy Amazon stock if I were to follow a strategy of focusing on only one company that I use most frequently whether it would be for entertainment use or internet processing power (Amazon powers a rather large percentage of the web with their web hosting services which might even be powering this website and Amazon caters to a large audience with their shopping website).
Facebook stock is a close second but I cannot guage the value growth of a social network over the next 10 years. If I were to build a portfolio were advertising revenue had an important role as in the case of Facebook, Google would be a stock that I would mention as a worthwhile entry in the early 00’s.
Heck, if I had a portfolio that also had a heavy emphasis of media over platform, I would say that the Walt Disney Company would be the company I would have invested in 1982 until 1986 but I have to remember that hind sight is 20 20. That said, over a 40 year career, investing in Disney may actually be the easier investment to make but I’ll stick to guaging the most interesting platform that smart people of today are willing to spend their time and money on!
Until I have a sizeable net worth and easy access to the major stock markets, I’ll be practising fundamental driven investment for the Indian stock market for myself and my clients but I’ll remember that when it comes to long term, strategic investing, go where the smart money would go and that would be where smart cultured people spend their time and money!