I’ve written many articles along the theme ‘Diversity of Performance’ since I introduced the theme in 2005. Most recently (See 6th Dec 12 Diversity of Performance) I showed how the Top Quartile of NASDAQ shares had increased by 57% in the previous 12 months whereas the Bottom Quartile had reduced by 23%. This was the greatest dichotomy I had ever recorded with the gap getting wider every year.
All eyes today were on Apple. Indeed, it was as I suspected in my post yesterday Apple – The bears win. Apple opened down 12% although they have recovered a bit since. A slump like that writes some $50b from Apple’s market value. Indeed, Apple has dropped by 35% since 21st Sept 12 when its shares had hit $705.
But look at this under the Diversity of Performance banner. I have admitted to buying RIM (Blackberry) at that same time. An investment in RIM on 21st Sept 12 would now be showing a massive 180% gain! Obviously more than compensating for an Apple loss. Maybe that’s why I haven’t sunk into depression as many readers have suggested. Similarly, purchasing Nokia on 21st Set 12 would be showing a 52% gain.
It’s intriguing that although everyone would say that Samsung has been the real winner in the period – its shares are ‘only’ up 11% since 21st Sept 12.
I get exasperated trying to tell people that it is no good ‘investing in tech’ anymore. ‘A rising tide’ no longer ‘lifts all ships”. If you aren’t in the Top Quartile (whether it is in share price or company performance) then you will not go very far. Conversely, there are higher rewards for the winners now than at any time I can recall.