NEW YORK (
) -- Talk to any investor, and they'll likely have a story about "the one that got away." It could be the stock that they owned and sold a bit too early, or perhaps the one that they "were going to buy" but didn't.
Invariably, these stories end with regret that the investor missed a trade that could have made a fortune.
But in my experience, investors rarely reminisce about the stock they almost bought that later tanked or went bankrupt.
Avoiding those big mistakes is a victory, but such stories don't have the "wow" factor that the "I almost bought
back in 1986" stories carry.
The fact is that landing the big fish often requires a significant time horizon, and a level of patience that few investors still possess. Unfortunately, we are told by many of the pundits that "buy and hold" is no longer effective, and that such "old school" investment tactics have no place in the modern era. (I disagree, but we'll save that argument for another day.)
In early 2002, shares of
(AAPL - Get Report)
were all but shunned. Revenue had fallen by nearly one-third in 2001, the company was in the red, and there was little if any excitement about the name. This was also a very difficult time for our country; we were but a few months removed from the devastating 9/11 attacks, the economy was suffering and fear was running rampant.
But there was something very curious about Apple in those days. The company had ended 2011 with more than $4.3 billion in cash and short-term investments, or more than $12 per share.
Debt, at about $300 million, was not an issue. In those days, Apple was selling for less than the cash and short-term investments on its books. As a value investor, I was intrigued by that.
I was also curious about the small, shiny white box that a colleague was bringing to work with him in those days, which turned out to be the first-generation iPod. It held an inordinately large number of songs, and the sound quality was great. But I failed to put two and two together. Could have, should have, would have, but didn't.
AAPL Cash and ST Investments