25% Apple, 25% Microsoft, 25% Google, 25% Cash

TripleB · Post by **TripleB** » Wed Aug 24, 2011 10:15 pm

Well my Permanent Computer Portfolio of 25% Apple, 25% Microsoft, 25% Google and 25% cash is going to have an interesting day tomorrow. Steve Jobs resigns so Apple is down 5% in after hours trading but Google is up 7% due to the expected rise in Android phone sales. Also Microsoft is up due to expected wins in Windows 8 versus OS X.

The 4 way computer permanent portfolio is so simple, yet so brilliant

Post by **dualstow** » Thu Aug 25, 2011 9:11 am

Nice! Impermanent as a snowman or a sandcastle, but nice.

Lone Wolf · Post by **Lone Wolf** » Thu Aug 25, 2011 9:22 am

Plus, if you backtest this thing as far back as you can, it has done amazingly well.

Jan Van · Post by **Jan Van** » Thu Aug 25, 2011 9:22 pm

i was kind of hoping for more of a pullback of AAPL...

btw.. i do own 3 out of those 4, though not in those percentages...

Odysseusa · Post by **Odysseusa** » Sun Aug 28, 2011 10:36 am

This portfolio of AAPL, MSFT, GOOG, SHY is the anti-Permanent Portfolio.

KevinW · Post by **KevinW** » Sun Aug 28, 2011 2:01 pm

What would the top 3 computer companies have been 20 years ago? 5 years ago even?

Post by **MediumTex** » Mon Aug 29, 2011 11:48 am

KevinW wrote: What would the top 3 computer companies have been 20 years ago? 5 years ago even?

Unfortunately, we are all getting older and 20 years ago was 1991. I wanted it to be longer ago than that.

As I recall, in 1991 Compaq and IBM were the big computer companies. At that time, I think Apple had about 15% of the personal computer market.

I bought my first computer in 1990 and it was an Apple Macintosh SE. I loved that machine.

Gumby · Post by **Gumby** » Mon Aug 29, 2011 12:22 pm

10 years ago, people laughed at you if you invested in Apple.

In 1997, Michael Dell was asked at a technology conference what might be done to fix Apple, then deeply troubled financially. He replied:

"I'd shut it down and give the money back to the shareholders."

http://news.cnet.com/Dell-Apple-should- ... 03937.html

In 2006, Steve Jobs sent an email out to all Apple employees, saying:

"Team, it turned out that Michael Dell wasn't perfect at predicting the future. Based on today's stock market close, Apple is worth more than Dell. Stocks go up and down, and things may be different tomorrow, but I thought it was worth a moment of reflection today. Steve."

Post by **MediumTex** » Mon Aug 29, 2011 1:14 pm

Gumby wrote: "Team, it turned out that Michael Dell wasn't perfect at predicting the future. Based on today's stock market close, Apple is worth more than Dell. Stocks go up and down, and things may be different tomorrow, but I thought it was worth a moment of reflection today. Steve."

...and 5 years later Apple is worth 10 times what Dell is worth.

KevinW · Post by **KevinW** » Mon Aug 29, 2011 2:21 pm

I'm thinking in 1991 the big dogs were IBM, Sun Microsystems, Microsoft, and DEC.

The computer industry sure is volatile, for better or worse.

TripleB · Post by **TripleB** » Tue Aug 30, 2011 6:08 pm

Just put 1/5 of your money in the top 5 computer companies. In 10 years, one of them will go up 500%. Unless the future doesn't use computers, or unless someone in their garage invents something better than Apple.

Post by **MediumTex** » Tue Aug 30, 2011 7:01 pm

TripleB wrote: Just put 1/5 of your money in the top 5 computer companies. In 10 years, one of them will go up 500%. Unless the future doesn't use computers, or unless someone in their garage invents something better than Apple.

What are the top five computer companies right now?

I assume Apple is one. What are the other four?

KevinW · Post by **KevinW** » Tue Aug 30, 2011 8:48 pm

Scanning VTI's holdings, the top 5 appear to be: Apple, IBM, Microsoft, Oracle, Google.

I didn't count AT&T as a computer company, although you could make the case that they are, since smartphones and broadband internet are big parts of their core business.

Incidentally I was tickled that Apple was the largest company by market-cap a couple weeks ago --- bigger than Exxon, GE, Microsoft, and others --- and yet Apple continues to be the think-different, anti-corporate product of choice. Score one for marketing.

TripleB · Post by **TripleB** » Tue Aug 30, 2011 9:39 pm

MediumTex wrote:
TripleB wrote: Just put 1/5 of your money in the top 5 computer companies. In 10 years, one of them will go up 500%. Unless the future doesn't use computers, or unless someone in their garage invents something better than Apple.
What are the top five computer companies right now?

I assume Apple is one. What are the other four?

I was being sarcastic.

Even if what I guessed is true, that 1 out of the top 5 will be the winner, it doesn't mean the winner will be profitable. Too many factors involved. Microsoft is technically "winning" by marketshare and they aren't making money, and are in fact hemorrhaging money in areas such as Bing, XBox, and Windows 7 Phone through cross product-line subsidization.

Gumby · Post by **Gumby** » Wed Aug 31, 2011 7:15 am

A few years ago, Steve Jobs changed the name of the company from Apple Computer to Apple Inc. He realized early on that "computers" were really a dying business (computers get cheaper and cheaper every year) and that Apple was going to make most of its money from new and exciting mobile devices (iPhones, iPods, iPads, cloud media, apps, etc). There is evidence that Facebook will compete with Apple and Google with their own line of mobile devices. Would anyone ever feel comfortable replacing Microsoft with Facebook (if it ever became public)? It's a tough call, but then again, nobody saw Apple taking over the industry 10 years ago.

HB Reader · Post by **HB Reader** » Wed Aug 31, 2011 10:30 am

TripleB wrote:
Even if what I guessed is true, that 1 out of the top 5 will be the winner, it doesn't mean the winner will be profitable. Too many factors involved. Microsoft is technically "winning" by marketshare and they aren't making money, and are in fact hemorrhaging money in areas such as Bing, XBox, and Windows 7 Phone through cross product-line subsidization.

That's not true. Microsoft is making lots of money. That certainly doesn't mean that it is the best prospect or is a great place to put your money, but they are currently a very profitable enterprise.

Post by **MediumTex** » Wed Aug 31, 2011 11:17 am

HB Reader wrote:
TripleB wrote:
Even if what I guessed is true, that 1 out of the top 5 will be the winner, it doesn't mean the winner will be profitable. Too many factors involved. Microsoft is technically "winning" by marketshare and they aren't making money, and are in fact hemorrhaging money in areas such as Bing, XBox, and Windows 7 Phone through cross product-line subsidization.
That's not true. Microsoft is making lots of money. That certainly doesn't mean that it is the best prospect or is a great place to put your money, but they are currently a very profitable enterprise.

P/E compression is what has ruined Microsoft over the last 10+ years. They never stopped making money.

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