Balls and Walnuts
more than you ever wanted to know
“All the blooms are off that tree.”
So said my Dean Witter stock broker back in 1982 when, for the first time in my life, I had more money than I knew what to do with. With my six-month internship at a Richmond, California herbicide company, I earned something like $2000, and it was burning a hole in my pocket. I wanted to put my money into what was then one of the sexier young stars on the horizon.
Alex specialized in penny stocks — itty bitty companies that would wither and die in less than a season, but would often run up a double or triple before they inevitably plummeted. After making a quick few hundred on my first transaction, I developed some misplaced trust in Alex. Turns out he was lucky, not good. If he was good, he wouldn’t have dissuaded me from investing my money in a young company that thought it could market personal computers to the masses. At the time, they were torn by infighting over whether to market first the Lisa or . . .
Yeah. The Macintosh.
Berkeley undergrad Kyle Conroy has tabulated what your money would be worth if, instead of buying an Apple product, you had invested in Apple stock instead. $5700 on the Apple PowerBook G3 250 in 1997 would be worth over $330,000 today. That’s 1997. And I wanted to buy Apple in 1982.
Apple stock has gone through a lot of swings in 30 years, so there’s no telling how long I would have hung onto my shares. But now, this very week, Apple stock has a net value greater than that of Microsoft stock. Apple is huge, and I could have gone in on the ground floor.
Reminds me of my thesis adviser, who did some consulting work for a little known biotech company back in the early 80s. They had yet to go public. He was offered cash or potentially worthless shares. He took the cash.
In 2009, Hoffmann-LaRoche bought them out for $46.8 billion. Guessed it yet?
Genentech.
D.
I have a friend who has been pursuing the startup dream in Silicon Valley. He works side-by-side with people who drive Ferraris, have two multi-million dollar homes (even at today’s prices), etc. People who were at startups at the right time and got the right stock and cashed out at the right time, etc.
Everybody remembers those people. Nobody remembers the thousands and thousands and thousands of people who invested in startups that went nowhere, that worked at companies and took stock in lieu of salary that turned out to be worth nothing.
For every Genentech, there are a thousand nameless, faceless companies that struggle from the ooze and die right back into it.
I watched a movie online (Netflix streams some movies) about a startup with four guys building stuff in a garage. They accidentally invent a time machine. Can’t remember the name of the movie but it was memorable mostly for how godawful it was . . . but apparently it has quite a cult following.
Yeah, I’m going off topic on my own blog but what the hell.