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This is the Value Investor podcast with Tracy Reinek. All things value, all the time.

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Welcome back, value investors. So I want to talk about how long you've owned a stock. The average time now is under three months to own an individual stock. But I know many of you own the indexes for longer periods because that's usually in a retirement plan and so you just hold on to that. But how long have you owned a stock? And I started thinking about this because a little while ago I ran across a post on x by Darren V96 and he was talking about when he bought Apple and that he's held it for 21 years now, 21 years Apple shareholder. And he posted a screenshot of his cost basis and his gain over that period of time. He actually had bought five different times since 2005 and he posted all the data with each one of those. But I have been thinking for a while about the people who maybe bought Apple around the time of the iPhone. So for many years I've tried to find people who have bought, you know, some of the mag sevens at their IPOs, especially Apple. There has to be somebody out there who doesn't work for the company who bought that IPO, which was actually December 1980. And the news media has tried to find these people as well. We put out like all points bulletin, hey, if you've owned it all this time, you know, let us know, come forward. And I believe not that long ago they did find a couple of people who owned Apple through the ups and downs. And remember Steve Jobs was there, he got fired, he left for a long period of time. The company was going, you know, spiraling down. He came back. It was only a month away from bankruptcy. This was in the 1990s during the dot com boom. It had to get a bailout from Bill Gates and Mike Microsoft, among others. It didn't get build out as we know. And then they went on to create the ipod, the iPad, and then obviously the iPhone, which turned around the company. And now here we are still with a lot of these products. And then Steve Jobs passed away and we got Tim Cook in 2011. So a lot has gone on there. It would take an extraordinary investor to own those shares from the beginning. But that's why I've been thinking after I saw Darren V96, his post about how he zoned since 2005, that there are going to be quite a few number of investors now who maybe bought the stock around the iPhone launch in that era, managed to stay in it and now have owned it. For 19 years if they bought the launch. So I know some of you are out there, but it leads me to ask, how long have you owned a stock? Did you initially own Apple and then get out at some point? You know, maybe when Warren Buffett was getting in in 2016. So then you would have owned it nine years if you bought the launch. And along the way, you know, you would have had the good returns. So the iPhone was introduced to the world at Mac World on January 9th, 2007. So at that point is when you could have been like, I'm going to, I'm going to buy this because this looks like a super cool product. I can't wait to buy it. It actually didn't launch to be bought to the public until June 29th, 2007. But US investors are forward thinking and so again, you could have bought it in January. So I ran the numbers for, for that. If you had bought it at the launch and you, if you had bought then and you held this whole time through April 2026, you would have had a return of 8593% versus the S&P 500 of 357%. But the NASDAQ doing a little bit better than the S and P at 1,195%. That's not too shabby for 19 years, right? So even if you, you weren't alive or you never bought the ipo, or maybe you bought it, you sold during the rough years in the 90s, you got back in when the iPhone was introduced. Your return is still extraordinary. So Darren V96, he ended up buying before the iPhone, but remember there was the ipod going on which was an extremely popular product. And he bought on March 3, 2005. According to his ex post, his cost basis then was $919.78. That's how much shares he bought at in 2000 by the time he posted this in April 2026. So 21 years later, that $919 was now had a gain of $159,580. So this is when I say people can, you know, try to get a lottery stock. That's what this is. It is a lottery stack. Then he went on to buy in 2008 during the financial crisis. Basically on 9-29-2008 he bought $10,788 worth. And now that gain is 734,487%. So putting some real numbers, dollar amounts into what when I'm, you know, just spouting all these stats. So that gain was 6457% versus the NASDAQ of 757%. This is through April of 2026 from 2008. And the S&P at 506. So annualized 25.2%. That is done by only a few stocks, but Apple is one of them. So then he bought again in 2020. So that's getting, you know, more into our era. A lot of us could have been buying then, but he bought on February 28, just before the COVID shutdown. But Covid was already an issue in China at that time and he bought $13,706 worth. And the gain on that was 39,527. So not too shabby for the last six years, almost tripled that money. He also bought in 2021, August 12, 2020, $1,399. And the gain on that, he has a gain of $1,124. And then he bought again in November, November 11, 2021, $1,051. And he's gained $835. So the good news is he's gained on each one of these purchases. But the longest he's held is 21 years. The shortest period since the purchase was five years. But how many of us are even holding for five years anymore? And you know, that's just, it's very difficult to do. So Apple's returns over the five year period, let's say you did hold over that period, is 109% over that period. And S&P 500 is at 68 as of mid April 2026. That that number keeps fluctuating because we keep hitting new highs on the S and P. A hard problem to have. Two years, 58% for Apple versus 41 for the S&P, which is still outstanding. 41% over two years. 10 years for Apple, 1,055% versus 218% for the S&P 500. This is as of April 2026, and that's annualized for Apple of 27.6% over those 10 years. And now you can see why it had become the largest holding in the Berkshire Hathaway portfolio because they have owned it now for just about 10 in the portfolio. And if you're getting 27.6% annualized, you're doing pretty well as that continues to compound. But Apple has not been all smooth sailing. In 2022, the stock was down 27% while the S&P 500 was down as well, but just 20%. It was also down during the Great Recession. But I looked at the two year period from January 1, 2008 through January 1, 2010. Apple was actually up in that period, but only 6%. While the S&P 500 remained in the red for those two years, down 23% in 2008 itself, which most people, you know, kind of equate with the worst of the Great Recession sell off. Even though it bottomed in March 2009, Apple was down 57% with the S&P down 37%. So this is why when I say how long have you owned a stock? It's fun to look at these longer periods where the volatility is smoothed out, so to speak. Certainly is over 21 years or since its IPO in 1980. So I saw a stat that said if you invested $1,000 in Apple's IPO in 1980, it would be worth 2.7 million now. So you look at this and you're like, oh, you know, I could do that. That seems easy. But looking at these individual years like 2008, where Apple was down 57%, that is when really tripped up, understandably, a lot of people have 20% sell off that triggers an automatic sell on their stock, even if they're long term investors. Others, you know, we can get easily spooked. And in 2008, believe me, plenty of reasons to get spooked in 2008 again, you had the S&P 500 itself down 37% in just that year. So it takes extraordinary willpower, let's say, and patience to own even for five years, certainly for 10. But going over 20 years, it takes a lot of, you know, a strong stomach, let's just say that. So Darren V96 certainly has had it with his Apple purchase. But what about some of the others? What if there wasn't an iPhone launch date and a clear indication that something good is going on at the company. I took a look at Amazon. I actually bought that for my own portfolio 10 years ago. So I feel like I'm doing pretty good. When I look at the 10 year horizon on it, it's up 687% in that period with the S&P 500 up 218. And that is 22.95 annualized for Amazon. But over the last five years the stock has lagged. It's up just 61%, which is annualized at 9.99% annual. And the S&P at 68% which is a little bit over 11% annualized. So 11 versus 10, let's call it 10, 9.99. You might think, oh, that's not that big a deal. It is lagging, but only by 1%. But over long periods that 1% will loom quite large in a return. And the S and P is definitely outperforming it. This is any dividends reinvested in the S and P. Amazon does not pay a dividend. So this is underperforming the S and p. And still 10% is not chopped liver. Most investors look for 8 to 10% in over the long term for their investments and feel they are doing pretty well against inflation at that rate and compounding of their investment. But I could have just bought the S&P 500 right over those five years. However, Amazon is now breaking out to new highs. And so maybe we're in for a period of a little bit better performance going forward. But there's no guarantees. And this is what makes long term investing so difficult. A company that's on top of the world in one year might not be five years or 10 years or certainly 20 years later. A lot of competition out there and a lot of technology, you know, kind of fades away over a certain amount of time. And built in advantages that a company might have goes away or it loses a CEO like Apple did. But Apple got another CEO who has performed well. Amazon now has a new CEO as well in Jassy. So no longer Jeff Bezos in there. What kind of impact will that have on Amazon? Another stock that I've owned for a longer period that people might be surprised at what it's done is Starbucks. So ticker SB U X on Starbucks, I've held it since 2012 and since that time period, since January 1st, 2012, the return on Starbucks is 323%. That doesn't sound too bad, right? But the S and p is actually up 468% in that same period. So obviously underperforming the S and P over the last 14 years. Over the last 10 years it's been even worse. So we had 218% on the S&P and we had just 50% on Starbucks. But it just reported solid earnings and the stock is up since I ran these numbers. So it's going to get a little bit better. But it definitely has been underperforming significantly over the last 10 years. And this does not include the dividends of which it has been paying a 2 to 3, sometimes 4% yield on that dividend, but the dividend really can't make up for the underperformance, as that just says continue to compound. So some of these big names that you think should be big winners sometimes are not and over significantly long periods of time. Again, that's a 10 year return and then I've owned it in the 14 year return and it's still underperforming in there. So how long have you owned a stock? This is why it is very difficult. You can, you know, weed out and get occasional winners, big winners like an Apple. I know many of you are in some of the other MAG7 stocks, but consider a stock like Tesla. If you are a long term shareholder of say 10 years, you are still on top of the world with your Tesla stock. But over the last five years it hasn't been the performer that it was prior to that. And so you know, as a shareholder, then you're asking how long do you stay in something like that. That's the other question. Right, And I get this question a lot. When do you sell? Maybe if you owned Apple again, you might have thought about selling in 2008 when it was terrible, even in 2016 when the stock wasn't really going anywhere, was trading at 10 times, or maybe you decided to sell in 2022 and it was down 27%. But again, the strong stomach really comes into play with a lot of investing and you really have to look at what's going on at the company. Starbucks has been struggling for several years now and it's not really a surprise what is going on there and why the underperformance, especially within the last, say five years after Covid and the reopening of COVID But for some of the others it might not be quite as clear why it's not doing as well. So this is another lesson on how you really need to stay on top of your stocks. So if you are a Tesla long term shareholder, over the last five years it is slightly beating the S&P 500 up 80% versus the S&P at 70. So you are a little bit outperforming there and that might be enough to keep you in because you're waiting for Elon to launch the Robo taxis and to get some of the AI investments up and running and you think better days are coming. But again, for every investor, you have to look at what's going on with the business, what's happening with earnings, what's happening with the sales growth. Valuations do matter, although I won't comment on that with Tesla because it has a sky high valuation. But for most companies, valuations do matter. So for years nobody really cared about Amazon's valuation until they did. And now it's actually the cheapest it's ever been on a historical basis, on a PE basis. And so the lagging over the last five years has caused the valuations to come back in line basically with what you would think would be a more attractive value type stock. So I still own Amazon. I've owned it for 10 years with all of my holdings. Sometimes I'm buying, I am selling off chunks, sometimes to get into some other investments or I'm taking some gains off. I am still in Starbucks because I'm waiting to see if the new CEO is going to bring brighter days and it does look like he is. So I'm waiting to see that turnaround play out. But this is why long term investing is difficult. I, I know I've revealed on this podcast in the past and I did a whole podcast on my longest investment which is now 25 years. Oh my gosh, 25 years in APA. They should give me some kind of metal for that because it's been a wild ride. But oil back on the move and they are an oil explorer and producer. And just a hint, if you are going to be a long term investor, which many of us value investors are, the commodities plays or the cyclicals. Any cyclical or commodity play should not be held for the long period of time because it just goes through way too many cycles. And that includes stocks like Exxon Mobilization, which my grandmother and her sister, my great aunt, owned for 50 years. They did get a dividend through that whole period. It wasn't a terrible investment. They made money. But because the cyclical nature of it, it wasn't as good of a performer as you might think. Owning it since the 1970s, even with big bull markets in oil, a couple of bull markets in there and it still wasn't as good a performer. So keep that in mind. There's a lot going on. That's why people like to own the indexes, because it is easier. You're owning the basket of stocks. You don't have to determine if the new CEO is going to execute. You don't have to determine anything. You can just own the whole basket and that is a little bit easier. As they say, buy the S&P 500 and chill. That's what they say. But I know many, many of us like owning individual stocks because we hope we might get one where we are. Darren V96 and 20 years from now, we might be posting on X or whatever, wherever we are posting in 20 years that we bought in 2026 and in 2046, this is how much money we've made. So Congratulations to Darren V96 for having the guts to own Apple since 2005, before the iPhone launched. That's not easy. And for buying in the heart of the downturn in 2008 when he bought another $10,000 worth of stock. That is commitment. That was after the iPhone launch. But the overall market was terrible that year. Apple was down 57%. He saw an opportunity, he took it and it has paid off. With one of America's greatest companies. You never know what you're going to get out there. So be diverse. Don't just put all your eggs in one basket. At least if you're going to buy individual stocks, look to own at least 10 if you're going to buy individuals. Although Warren Buffett says you can own only three and you'd be kind of diverse. But that's him, that's not us. So 10 to 20 gives you at least a little bit more diversity in there in case something blows up, you aren't totally crushed down. So let me recap the tickers we talked about. Apple, of course, AAPL still going strong all these years later. Amazon, AMZN is that ticker. Starbucks, SBUX and apa. I mentioned that one. APA is the ticker formerly known as Apache. So as always, be sure to subscribe to get all of our podcasts here. I try to cover these more interesting topics along with the value stocks out there. But long term investing is what we do as value investors. So think about, think about how long you've owned a stock. Leave me a message on YouTube if you're following us over there. You can leave comments, tell me how long you've owned a stock over there. But join us subscribe on our YouTube channel. It's just under Zach's podcast. You can also get us on Apple. We're on Amazon Music, we're on all of these things. Maybe I should have bought all of these when they launched podcasting, right? That's another clue. Starbucks has no podcasting. Not yet, but if they do, I'll be interested. So be sure to subscribe somewhere, get us and I'll be back next week with some more value stocks.