Can you spot a winner? I can. Maybe not always, but more often than not. I call it my special purpose.
But can it make you rich?
Sure. Imagine you paid that guy Hiro from Heroes to bend time and space. You could whisk back to July 1995 and buy Dell
While you're there, grab some AOL for $1.66, before the Time Warner
You're probably wondering: If you could bend space and time, why invest only $1,000? Well, that's what you should be wondering. But you're really wondering whether I'm pulling winners out of my hat. Well, I'm not. I'll even show you a table to prove it.
That's right, I said a table
In fact, I heard about all three insane winners (and others you're about to see) one sunny day in 1995. And every one of those stories made perfect sense to me. Remember, we're not talking 1989 here.
With the exception of AOL, every business we'll discuss today was proven by 1995. They were industry leaders ... they were run by entrepreneurial zealots ... they essentially printed cash ... and insiders loved the stock.
And they were only modestly huge at the time, which made them attractive to institutions and left them room to run. Only one thing could have made them better, as you'll soon see. But first, it's time I revealed my source and showed you that table.
I won't keep you hanging
Tom Gardner turned me onto those stocks in 1995, plus the others in the table below. Tom's a founder of The Motley Fool. He's also bald and tells decent stories. In 1995, he got it into his bald head to build a portfolio we could hold for 10 years.
Here's how we fared...
| Company | 7/7/95 | 7/5/05 | Return |
|---|---|---|---|
| Dell | $1 | $39.85 | 3,885% |
| AOL | $1.66 | $16.48 | 893% |
| Cisco | $3.07 | $18.82 | 513% |
|
Texas
Instruments |
$8.30 | $28.94 | 249% |
|
Gap |
$5.11 | $20.26 | 296% |
Actually, there were 10 stocks in all. After 10 years, we were up 667% (versus 147% for the S&P 500) -- turning $10,000 into some $77,000.
But you could have done better
Of course, you'd have to go further back in time -- when these companies were smaller. If you'd have bought Dell in 1991, for instance, you'd have ended up with four times as much. Same with Cisco. Clearly, great stocks get greater when you get in early.
That's why megacap Oracle
That's also why Tom Gardner digs up small companies for his Motley Fool Hidden Gems subscribers. It may even be why 12 of his team's picks have at least doubled since 2003 and why his entire portfolio is up 43.3%, vs. 19.3% for the S&P 500.
Of course, I don't know that for certain
But our chances of catching a 15,000% gainer skyrocket when we buy small companies. We just need to know a good story when we hear one. Or hear better stories. That's why you should meet Tom G.
Especially now that you can try his Hidden Gems service for free. There's no pressure to join, and you get three full years of great stories while you mull it over. That's more than 60 small-cap picks from the guy who told me about AOL in 1995 -- for free. To learn more, click here.
Fool writer Paul Elliott doesn't own any of the stocks mentioned. Time Warner, Dell, and Gap are Motley Fool Stock Advisor recommendations. Gap and Dell are also Inside Value picks. The Motley Fool has a disclosure policy.
