If you had a choice five years ago to invest a $1,000 in Apple (AAPL) or Microsoft (MSFT), which stock would you have bought?
A quick glance at a 5-year chart for each stock shows you which decision would have paid off the best.
Five years ago, Microsoft was selling for around $24 per share, while Apple could be bought for around $36 per share.
Now, Microsoft is going for around $31 per share (close April 23, 2010) while Apple closed the same day at almost $271 per share.
Even when you throw in some dividends from Microsoft, Apple would have been a super buy five years ago.
So, everyone is an investing genius in hindsight. What lesson can we learn from this example?
The one lesson (of many) I want to point out is the loyalty of Apple customers compared to those of Microsoft.
The Apple fanatics have kept them a force in the personal technology market despite the fact that the company has never owned more than 10-12 percent of the personal computer market.
Of course, the two companies are not exactly competing in the same markets.
Still, it is hard not to notice how many companies (Microsoft included) have tailored their products and services after Apple’s lead.
Is Apple still a good buy, even at $270 per share?
If you read comments on various stories about Apple, it’s hard not to notice the enthusiasm people have for the stock and the products.
I am not suggesting you buy (or sell) Apple stock.
What I am suggesting is that when customers willingly pay a premium (most Apple products are pricey compared to competitors) and buy huge quantities of new products sight unseen (Ipad), you should pay attention.
