One Life-Changing Investment

"Don't love stocks -- they're just pieces of paper."
-- Jim Cramer

I respect Jim Cramer a great deal, and in some ways I agree with his statement. At The Motley Fool, we also recommend that you don't fall so deeply in love with your stocks that you can't objectively evaluate their business fundamentals or sell if those fundamentals begin to deteriorate. Controlling your emotions is often one of the most difficult, and most important, parts of investing.

However, I suggest you seek out investments in companies you like and are proud to own -- companies whose products and services you love, with management you respect and even admire, and whose stock you feel like you just have to own so you can take part in the company's spectacular success.

Investments in these types of businesses can literally change your life. Don't believe me? Let me give you an example.

I have long admired Apple (NASDAQ: AAPL  ) . In business school, it seemed like the company set an example for best practices in almost every business function. Apple has an excellent management team, even after the loss of the world's best CEO. As for its products, I love my iPhone and iPad; they're amazing devices. And my wife uses my iPad so often that I think I just may have to buy her one for her birthday (Just don't tell her I said that!).

Let's rewind a few years. In mid-2006, I was out of the market because expenses (also known as my wife's engagement ring) forced me to sell my stock investments. But one day I was watching CNBC and noticed that Apple was near its 52-week low at about $50 per share. I had recently read how Apple had reached a deal to use Intel (NASDAQ: INTC  ) processors, which gave Apple's computers the capability to operate Microsoft's (NASDAQ: MSFT  ) Windows-based software much more effectively. I knew this would be huge for Apple, and it didn't make sense to me that the company was trading near its lows for the year. So I added the company to my watchlist and began researching the stock.

A few months later, I took the plunge and invested in Apple. I also rated it an "outperform" in Motley Fool CAPS. (At the time, CAPS was a cool little stock-pick tracking service created by The Motley Fool. Now it has more than 75,000 participants.)

Fast-forward a few years to early 2009: The market fell to decade-low levels thanks to the housing crash, credit crisis, Great Recession, and this song. Apple's stock price hovered around $85, and some genius analyst had just downgraded the shares. At the time, my portfolio was taking a beating. Like the rest of the market, it was down more than 50%. I decided to sell the stocks of the weakest businesses in my portfolio and move the money into the companies I felt would perform the best in the long term. (In hindsight, this is what I should have been doing all along!) One of those latter companies was Apple.

Fast-forward a few more years. My family's portfolio is now solidly in the black and has more than tripled from those March 2009 lows. Even better, the gains in our portfolio are going to allow my family to buy a home. Most of those gains came from my position in Apple.

Apple is also one of my best-performing CAPS picks and has helped me earn a top 1% ranking. But here is the really life-changing part: Apple helped me land my dream job by basically bringing me back into investing. Back in 2006, I really didn't have much money to invest in the stock market, but I believed Apple was simply too good an investment to pass up. I had to own the stock. Soon the research I was doing on Apple led to research on dozens of companies, which led me to study economics, accounting, and personal finance. This ultimately led me to complete a degree in finance -- and to a place in The Motley Fool's Analyst Development Program. I have no doubt that my investment experience, countless hours of studying, and CAPS performance helped me get hired by the Fool. (And this truly is a special place.)

I've been a Fool for more than 15 years, and now, in large part thanks to investing in Apple, I'm an analyst on legendary investor David Gardner's flagship service: Supernova.

Not bad, for just a piece of paper.

That's my story, but I'm much more interested to hear your stories. If you'd like to join me and my Supernova teammates as we seek out more life-changing investments, I invite you to learn more about our proven investment approach. Our leader, Motley Fool co-founder and Supernova creator David Gardner, has crushed the market for well over a decade. David specializes in identifying game-changing companies like Apple long before others are keen to their disruptive potential, and he helps like-minded investors profit while Wall Street catches up. I invite you to learn more about how he picks his winners with a free, personal tour of Supernova. Inside, you'll discover the science behind his market-trouncing returns. Just click here now for instant access.


Read/Post Comments (28) | Recommend This Article (48)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 13, 2013, at 10:54 AM, techy46 wrote:

    "In business school, it seemed like the company set an example for best practices in almost every business function. for its products, I love my iPhone and iPad; they're amazing devices."

    Ya know those are the exact opinions and sentiments I have about Intel and Microsoft's ecosystem. Microsoft did to the mainframe for Boomers what XYZ'er think Appel's done to the PC. There's several big differences, we made are minds up by ourselves without being brainwashed by a bunch of socialistic liberals in some tax subsidized business school. We did act like a flash mob saying IBM's mainframes were dead, we increased business'es productivity by surrounding mainframes with Novell and Microsoft networks and invented and improved the internet. We don't worship Microsoft and would've never followed an arrogant self-centered single minded egotist. Long AAPL DELL HP INTC LNVGY MSFT NOK

  • Report this Comment On January 13, 2013, at 12:17 PM, TimKnows wrote:

    As you gain experience, you will come to regret this article for everything it says about how you need to learn a great deal more about the media, Apple and how business functions. A better example of a company that makes a great study is how McDonalds has faired over the years. You have to look at a company that is a large part of our engrained society, not one with a one trick pony that suddenly isn't the fad of our future consumers, the youth of today. Apple is "uncool" now with teenagers,do you really want to heap praise on a company that generates and loses "coolness" as fast as a pet rock?

    As for Cramer, really, he is the product of everything that is wrong with the market and the media. No wonder retail investors don't want anything to do with the stock market. Over time you will learn that he has always been bad for investment and the market. At some point, Apple will be a great case study for business students but for now, they need to complete their cycle so that you can discover the truth about their business model and how it has failed.

  • Report this Comment On January 13, 2013, at 8:42 PM, NickD wrote:

    I ask you this would you invest in Apple for the next 50 years?If you take more than 10 seconds to answer don't invest a penny.

  • Report this Comment On January 14, 2013, at 6:07 PM, Sotograndeman wrote:

    Every credible value investor from Buffett and Klarman on down will tell you straight: think of stocks as fractional ownership in businesses, NOT as pieces of paper or numbers on a Bloomberg terminal.

    Cramer is market entertainment, not a serious investor. He lost gullible would-be investors huge amounts of money a decade ago. So too did TMF incidentally, by not paying attention to valuation.

  • Report this Comment On January 14, 2013, at 6:09 PM, progressisslow wrote:

    Just last week I bought 8 shares of Apple I guess I am a moronic newbie. We will see. In 2009 I thought the price was too high. So, I bought other more reasonably priced stocks. Stocks like H H Gregg, Dreamworks and Dolby.

    The important part of this article is how he decided it was time to sell his lossers and buy Apple. Hope springs Eternal.

    Sam

  • Report this Comment On January 14, 2013, at 6:12 PM, craoli wrote:

    This guy just seems concerned because he investment with aapl is falling. I think aapl will fall more.

  • Report this Comment On January 14, 2013, at 6:14 PM, craoli wrote:

    This guys just seems worried because his investment with aapl is falling. I think it will continue to fall for a while.

  • Report this Comment On January 14, 2013, at 6:31 PM, jm7700229 wrote:

    Ho hum. Maybe you should change the name of the company to Apple Fool. Perhaps even list it on your own exchange so that you don't need to scroll past all the companies that will still be here in ten years.

  • Report this Comment On January 14, 2013, at 7:17 PM, richie54 wrote:

    Methinks Apple is the next Netflix.

  • Report this Comment On January 14, 2013, at 7:18 PM, barbiee01 wrote:

    Why is it that everytime one wants to read an article on your site that one has to log in and go to some page to get the information? Why don't you just present the information on your site without all this rigmarole? It is a pain to have to log in to read some commentary.

  • Report this Comment On January 14, 2013, at 7:59 PM, retiredR wrote:

    Apple may double in the next few months or years but unless the investor has alot of money a person like me could only buy a few shares at that price. Even if I put $20k into Apple I would only own about 40 shares, that to me is a big risk!

    There are other stocks I would rather buy that are great stocks at alot better of a share price. Stocks like MO, PG, JNJ, MSFT, XOM or KO.

    Value plays like AA, NOK or a number of others take your pick. Apple is just to high for my investment portfolio.

    That's just my take for what it's worth !

  • Report this Comment On January 14, 2013, at 9:57 PM, dunce12 wrote:

    Just don't understand why you respect Jim Cramer--you have got to be kidding, right???

  • Report this Comment On January 14, 2013, at 10:11 PM, Vince1172 wrote:

    retiredR, dont look at the stock price. its almost irrelevent. look at the valuation and the business itself. buy one or two shares of apple if u like -- no one said you had to use all 20k. what if apple was $50 instead of $500? whether u buy 2 shares for $1000 or 20 shares for $1000, your still getting the same percentage of aapl.

    for you fools who think aapl is the next netflix... wow. what can i say? aapl is an amazing company with loyal followers, great products, low valuation... and who knows what they have cooked up for the future! more innovative products ill bet. (by the way, i looove my netflix subscription! down with commercials and crappy cable!! have you noticed the stock's doubled off its lows? just sayin...)

    if aapl split right here, you'd see it skyrocket. maybe thats the only reason a stock's price matters. there are a lotta retired R's out there who just dont get it.

  • Report this Comment On January 14, 2013, at 10:14 PM, Vince1172 wrote:

    as for u barbiee01, why dont u just stay logged in so u dont have to worry about it? that IS an option u kno. incidentally, these articles are FREE, so stop ur b-@#%ing. no ones forcing u to read em. <3

  • Report this Comment On January 14, 2013, at 10:18 PM, Vince1172 wrote:

    dunce12, perfect name for u. say what u want, cramer is highly intelligent. he knows 10x more than most of us about investing. yes, he has steered many people wrong. but hes made many people $$ too. he IS an entertainer and he does make mistakes. every public stock-picker does!

  • Report this Comment On January 14, 2013, at 10:20 PM, Vince1172 wrote:

    craoli, didnt apple drop to 90 a few years ago, befor rocketing up to 700? its now at 500. not bad. stop thinking short term.

  • Report this Comment On January 14, 2013, at 10:24 PM, thunderboltnova wrote:

    No one ever mentions Steve Jobs no longer being with the company. He was the back bone behind the whole company and their products. How can Apple be a good investment long term?

  • Report this Comment On January 14, 2013, at 10:28 PM, Vince1172 wrote:

    thunder, thats a very interesting point and my only concern about aapl.

  • Report this Comment On January 14, 2013, at 10:44 PM, optimist911 wrote:

    Everybody's a genius in hindsight, but some feel the need to tout this.

  • Report this Comment On January 14, 2013, at 10:47 PM, Dennis129 wrote:

    Your requiem failed to come to a real conclusion. Are you holding Apple? Do you advise recent buyers to hold r accumulate? Once the worm of doubt gets established, it the Apple still worth holding?

    I have alays though part of Job's BS was to restrict the numer of shares and allow them tio inflate to ungodly levels. It is great way to create a self-perpetuating monument. Rather than pay dividends, left owners pay the options game. It works for a whilke, but ultimately reversion to mean will take its toll.

    While it might be more boring, using splits and dividends would have helped spread the wealth and open the stock to enormous untapped resources that found AAPL at its heights glittering but very cold.

  • Report this Comment On January 15, 2013, at 12:13 PM, 48ozhalfgallons wrote:

    Apparently, many are still holding Apple after buying at $705.

  • Report this Comment On January 15, 2013, at 1:03 PM, parhamth wrote:

    Now that AAPL has tanked What are you going to do?

  • Report this Comment On January 15, 2013, at 10:41 PM, progressisslow wrote:

    Just last week I bought 8 shares of Apple I guess I am a moronic newbie. We will see. In 2009 I thought the price was too high. So, I bought other more reasonably priced stocks. Stocks like H H Gregg, Dreamworks and Dolby.

    The important part of this article is how he decided it was time to sell his lossers and buy Apple. Hope springs Eternal.

    Sam

  • Report this Comment On January 17, 2013, at 8:20 AM, mikecart1 wrote:

    To say Apple is tanking is like saying Groupon is soaring. Who can do what Apple does better than Apple? This simple question will save investors a lot of time and headaches. If you can't come up with 1 solid prospect to overthrow Apple in the next decade, then you should change your thesis of Apple's Demise.

    :)

  • Report this Comment On January 18, 2013, at 1:49 PM, NickD wrote:

    It not to say it's tanking it is lol 700 to 500 not tanking

  • Report this Comment On January 19, 2013, at 1:46 AM, whyaduck1128 wrote:

    I read the entire article, just to find it was yet another plug for Supernova. Yeah, as if I haven't had enough "time is running out!!!" blurbs for it in my mailboxes.

    I subscribe to SA. I have followed its advice on many occasions, often to my benefit, sometimes not (but always my responsibility when not, n-n-n-nobody's fault but mine). If the advice given in SA isn't your best, then I and many others have been misled. If it is your best, there is no need for Supernova.

  • Report this Comment On January 20, 2013, at 8:56 AM, Elbonian wrote:

    Apple stock (AAPL) has been up and down and up again. Its only a matter of time before it once again comes down. You just don't get lucky to invent a new technological winner every time you need one. As markets mature, price becomes the leading discriminator for purchasers, and Apple has NEVER tried to compete on price (which is a lot different than competing on VALUE, which has long been a strong feature of Apple's products). Apple is approaching saturation for its market. To me, "approaching" means it reaches saturation in 12 to 24 months and sales growth becomes limited by market growth as Apple and its competitors (now largely Samsung) duke it out for market share. There just aren't any major population centers left for Apple to introduce its products and achieve worldwide growth by taking on a new market. The move to increase sales in China is about Apple's last chance for ever larger sales numbers, and in China Apple will begin to be more limited by competition from Samsung.

    So, to all the Apple fans out there, start deciding just how long you will ride AAPL down again. The big boy investors are already out or getting out, as the current low multiples and recent declines clearly demonstrate. Wall Street always beats Main Street out of the currently-most-popular stocks. It may not be this quarterly report that brings Apple back down to Earth. It may not even be this year. But Apple will fall sometime before January 2015 unless it can introduce an even more explosive new product category than the iPhone/iPad combination (and I'm personally betting that no such products are currently possible).

    As for Supernova, its way too expensive for my low-5-figure portfolio, about a third of which is stuck in my employer's stock (part of my compensation package). YMMV, as always.

  • Report this Comment On May 27, 2013, at 3:00 PM, jaybird43 wrote:

    Apple this Apple that. Cramer this Cramer that. Warren Buffett this, Warren Buffett that. This foolish record has to stop. There are other companies, financial buffoons, and wiz investors whose company actually pays a dividend. Show me the money Warren, don't keep it all to yourself. Apple didn't pay any dividend for all those good growing years either. And anyone going to the Sreet.com to find a ex-dividend date beware. Cramers site has given me the wrong date 3 times this last year.

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