Some Great Investments Are Right Under Your Nose

As someone who adheres to a patient, long-term value investing philosophy, I tend to revel in consistency and familiarity (after all, as the greatest investor of this generation has said, it’s not about what you know – it about knowing what you don’t know that makes the difference.) Recently, however, one of the companies in which I have a controlling ownership stake made the switch from PC to Apple; everything from iMacs and MacBook Pros to Power Mac systems with 30” monitors. I was nervous about it – most people who know me figured I’d be the last one to switch – but within two months, found that the entire business could be successfully run from within the Mac OS software. Now, many of our associates have made the switch at home, as well. (In fact, we even have an Apple TV hooked up to one of the flat-screens hanging over the fireplace!)

How is it that I, a self-professed, Microsoft-loving professional, found my way to the Apple orchard? It all came about because I fell in love with a little device known as the iPod. It opened the door. It made me realize that if a company could create a device that natural and simple, their computer systems must be as good if not better. Then came the purchase of a 20" iMac for home use. The fact that the entire computer was tucked away in the monitor - no tower, no wires, no anything - was very appealing to me. Then, we finally decided to switch the business. With a simple phone call to the business specialist at our local Apple Store, we were up and running. It was the easiest techology transition I've ever had. Add the fact that I didn't have to worry about programs locking up on me, and I quickly came to realize why this company was more like a cult. As I began looking around, it was apparent that my experience wasn’t just an isolated incident – my eye doctor had the entire practice switched to iMacs. My best friend’s parents picked up an iMac for their home. My mother bought two iMacs – one for home and one for her office.

Back when the iPod was first introduced, Apple was on its deathbed. Saved only by the return of the proverbial king, Steve Jobs, the stock has performed spectacularly over the past few years, making those who took notice of the changing landscape a lot of money. Revenues exploded, profit margins got fatter, cash started coming into headquarters ... It’s funny, though, that often the most obvious turnarounds are passed by because investors feel that everyone knows what is going on so they don’t even bother looking into the situation.

This isn't to say that Apple, Inc. is a great investment now. What's clear in hindsight is that it was a great investment several years ago. The moral of the story: The next time you are walking through the grocery store, picking your kids up from soccer practice and hear them talking about some new gadget, or see a new chain of retailers dotting the landscape, take a moment. It might not be a great investment, but it’s at least worth a look.