Ladies, please help Conflict come to terms with his homosexuality

Sion wrote: »

Noir wrote: »

@sion break this down for me

@Noir this is the power of compounding. This is another reason why I say it's far better to invest longer term that to try and in and out the market. Compounding is a very very very important aspect of investing. Based on the growth that Apple has produced over the years that is what your money would have been worth if you invested in Apple and left it to grow while adding to it periodically. What's even crazier is that if you had invested that 10k in Apple during the years only when the prices had fallen by more than 10% you'd have roughly 20% higher returns than what the chart is suggesting. Obviously you have to be able to pinpoint those dips - which isn't all too tough. If you use a brokerage you can have alerts sent to your phone or email whenever a stock you own drops more than 10%, you can also set features on your brokerage account to reinvest whenever the stock falls to a certain point.


Another thing too the chart goes to show you is how much better stocks are versus real estate by showing you the condo example too. I try to educate people and show them that compounding is powerful and what Apple goes to also show you is why. Notice how the stock of Apple was at one point like $700 a share ? Then they split the stock to $100 to make it more affordable for new investors ? If no company on the stock market split it's stock, most stocks would be selling for over a million dollars a share. What companies do after a period is they split the stock (taking existing shares and split them into more units so more people can afford them, this way they can raise money to reinvest in their company), this doesn't mean that it's worth less it just means that new shareholders can afford to buy it on a nominal basis and the previous shareholders now have more shares b/c the company splits 1 share into 3 or however many. They may also increase the dividend too (they do this quite often). Now if you had invested in Coca-Cola in the 1930s I believe and bought 1 share, got a dividend reinvestment plan with the company and did not invest in it, you just held it to today, that money would be worth around $30 million dollars plus. The stock would have split and dividend increases by 2015 would have given you many shares in the company and a mountain of money. Conversely if you had invested 10k in Warren Buffett's Berkshire Hathaway in 1965 and held to today it would be worth over $50,000,000 and if you had kept investing your money every year you'd be in the 9 figure club. These are things ppl rarely if ever think about when investing. Now that you have the knowledge it's the difference b/w the guy beside you being able to do 3% in a day but lose 6% for the week and you being able to do 50% over a year or 2 and not losing your bread.


It's not the only company like that tho, Wells Fargo, Bank of America, Coca-Cola, ExxonMobil, Wal-Mart, Fairfax Financial, Berkshire Hathway, Disney, MBIA etc. could have given you similar or better returns if you had invested and then held on for 15+ years. Especially in 2000/2001 when markets crashed after 9/11. There are a lot companies that can land you better returns than Apple you could invest in and see better returns especially right now in the oil and gas industry with oil being down and companies scaling back. Personally I wouldn't invest 3k into Apple tho, you'd be far better off investing it entirely into Fairfax Financial and waiting that same time period, the mgmt over there is allocating capital and earning INCREDIBLE rates of returns, at this point now they're going to always be profitable especially as their insurance subsidiaries and other businesses grow. Your challenge now tho is whether or not you can overcome perception vs. perspective. The perception is that "Apple is the best" which isn't true at all, there are many companies that could give you far better returns if you intend to hold for 15+ years. But perspective will tell you that Fairfax will do waaaay better and tho it's not as well known around the world, it's still highly renowned in the value investing community as one of the best companies in the investment industry. They are a mini Berkshire Hathway. Apple's returns will slow up as time goes on especially as it gets bigger like most of it's predecessors have but Fairfax can literally invest in ANYTHING including Apple and grow your money by much more as it is also the cheaper company to buy on an intrinsic basis and will earn you more.