The Harsh Difference Between Investing In Apple And Microsoft


Photo: The Dark Knight

Think back to your life 10 years ago. Now think about this: if you would have invested $10,000 in Microsoft stock then, you would now have $13,000. If you would have invested the same amount into Apple, you would now be sitting on $700,000.

Really let that sink in.

Analysts and naysayers critique AAPL all the time. Apple’s stock is either not meeting Wall Street’s expectations or on the edge of nosediving into oblivion. AAPL hasn’t been doing so hot in recent months for a myriad of reasons. Stock has dipped to $500-$600 per share after a $700 high in September. You can attribute the fallout to a number of factors, including negative press surrounding iOS 6 Maps, the recent executive shakeup with Scott Forstall, a collapsing economy, and an upcoming increase on capital-gains tax. Shareholders are nervous.

But is it any better over at Microsoft, the tech giant that once claimed Apple’s position as the most valuable company in the world?

Not really.

“Apple is a super company currently making supernormal profits from very high market shares in markets it created with truly super products,” said Steven Russell of Ruffer & Co. to The Wall Street Journal. To Russell, Microsoft is “a so-so company making OK profits with nothing expected to change.” Sure, the Surface and Windows 8 may change all that, but there have been no signs of the folks in Redmond spearheading a revolution quite yet. Apple is where the growth is.

AAPL saw an incredible day of stock dollar gain today. Stock closed at $565.73 per share, an amazing 7.21% increase. Apple is worth $485 billion, while Microsoft is worth $220 billion at $26 per share.

If Apple is a fast-paced river that changes currents, Microsoft is a vast sea with predictable tides.

Since the death of Steve Jobs, investors have been particularly worried that Apple’s winning streak will come to a screeching halt. No company is perfect, but Tim Cook has continued to lead Apple well and ship things people want. Almost every single product in Apple’s lineup was updated over the past few months.

So, when is it a good time to ditch AAPL? When Apple stops making quality products, then it’s time to jump ship.

Source: The Wall Street Journal

  • spb57000

    do you mean ‘you would NOW be sitting on $700,000’?

  • Steven Quan

    When did Apple ever stop making quality products? Even when Steve Jobs was ousted from the company their Mac’s were still fine computers. They stopped being successful when they stopped innovating. It’s the new ideas they bring to the table that has set the company apart like having a touch screen, camera, and app store all rolled into a smart phone. Prior to 2007, no company had a smart phone like that, RIM’s Blackberry had a slideout keyboard, no camera, no app store, nothing!

  • jon

    Can’t compare the two, that is a very bad comparison. Microsoft was already big and wasn’t going anywhere else in 2000. Where as Apple had more potential to grow than Microsoft. Microsoft dominated the ’90s where Apple dominated the previous decade. If you compare the two decades it would be much better. Investing $10000 in Microsoft in 1990 and selling at their peak around 2000 gives you $900,000. Investing in apple at 2000 (I chose a very generous low) and selling at $700 (peak) gives you $850,000.

    You can’t compare a company that doesn’t have much growing potential to a company that has a lot more growing potential looking back.