International Business Machines Corporation
52 Week High
52 Week Low
7 Days Mentions
Most U.S. patents granted in 2020: IBM: 9,130 Samsung: 6,415 Canon: 3,225 Microsoft: 2,905 Intel: 2,867 Taiwan Semi: 2,833 LG: 2,831 Apple: 2,791 Huawei: 2,761 Qualcomm: 2,276 Amazon: 2,244 Sony: 2,239 BOE Technology: 2,144 Toyota: 2,079 Ford: 2,025 Google: 1,817
Tech is a lot of things now. There is "tech" that is speaking of computers, internet, decentralized block chains, and Silicone Valley type stuff. Then there is the integration of tech into all aspects of life from "smart things", 5G, technological disruption in how we do work, mRNA vaccines, etcetc. In terms of investing, tech is also being merged into the idea of "growth" oriented stocks vs "value" oriented lower tech stocks. That doesn't mean IBM isn't high tech or not in the technology sector, but it seeks to operate and generate returns as a company vs a Google that is focused on growing. That can be applied to a lower tech industry like real estate where STWD will be about operating and providing dividends while a Zillow focuses on growth. The point the other guy makes is that "tech" can mean a lot of thing or nothing at all because every large company is technically a "tech" company in terms of *"Constantly recognizing the potential for upstart disruption and putting additional focus/funds towards thwarting it."*. Just like how EVERY media company is fighting with Netflix and rebranding as streamers or how EVERY automaker is throwing the gauntlet at TSLA and rebranding themselves as tech company. That's because everyone with 1/10th of a brain has seen that every "non-tech" company got disrupted and either adapted into a tech company or DIED. Netflix killed blockbuster hasn't managed to kill the other media giants. LYFT/UBER disrupted the taxi industry, but many small independent providers have adapted to offer better services. Apple killed Nokia and Motorola who killed landline phones. Iphones replaced like 99 other things from watches, maps, compasses, phonebooks, phones, cameras, etcetc. Where did those companies go? They either adapted/evolved like Samsung did or failed like Kodak did. Google killed Yahoo which replaced AOL which disrupted the pre-net world. Amazon who killed local bookstores, music shops, Mainstreet, Sears, Kmart, Radioshack, etcetc. Yet Target, Costco, and Walmart all survived by adapting technology not only on the consumer front facing end, but top to bottom from logistics, inventory, and integrating online with physical stores.
My favorite is IBM. 1. Lever up with cheap debt to fund buy backs. 2. Report continuous GAAP losses, but cover it up by making obscene future assumptions and report continuos quarterly layoff costs as "one time" costs and report non GAAP profit. 3. Award executives huge pay packages for meeting "positive" earnings. 4. Profit.
From above list Exxon, GE, IBM, Toyota, Nomura etc aren't out of business yet but did they beat the market over past 30 years? I don't think so. The thing is we cannot say with certainity that the stocks that did well in the past will continue to do so.
>Those 4 companies are \~20% of the S&P. Add tesla and you’re close to 25%. So, if you’re afraid of a theoretical downward risk in holding those names, and instead choose to buy the S&P, how are you not necessarily still at risk? Just to be clear, I don't advocate *not* holding those names. Just not making them 100% of your portfolio. As you say, if they outpace the market, you still benefit by holding them in your whole-market ETF. And if they falls short ... you still benefit by holding other things. It's not eliminating risk, but rather ensuring a positive outcome across a wide range of futures. As far as "today's behemoths are not like yesterday's behemoths" - everything you said was said in the past about GE, Bell Labs, IBM, etc. They were all tech-based, constantly re-inventing themselves, grew aggressively through acquisition, had multiple lines of revenue. Didn't matter. The changing world came for them all. More generally - every time in history someone has said "history has stopped turning, and the future will continue to look like today," they have been wrong. And every time someone has said "I get that, but this time is different" ... they've been wrong.
Just a reminder that their 11 qubit device is the only thing available to customers and it only has 3 usable qubits (passing QV n=3, 2^3=8). It lost to IBM and Quantinuum, so of they want to become an "industry leader" this next computer better 1. Exist and 2. Be amazing. https://arxiv.org/pdf/2203.03816 I'll believe it when I see it pass independent benchmarking
I mean years ago you could say Cars are here to stay (GM Ford), so are mainframes computers (IBM), so are washing machines and jet engines and locomotives(GE). And you be right!. What happens is competition comes in, technology changes even though the old Tech is still around competition drops the profit margins. Cloud computing is going to be a commodity eventually like a hard drive with cut-rate prices. Will they make money 10 years from now absolutely but so does IBM selling main frames.
All the engineers over from India on temporary work permits at IBM when I worked there would go to Ikea together after work and eat the equivalent to Costco cheap meals. IBM Canada absolutely preys on temp foreign workers and pays them peanuts.
Ye but what is medium risk? Tech is usually high risk. Maybe look IBM (cloud computing etc.). AMD is great stock - I already earned a lot on it. You got NVDA, obviously great pick even has small dividends. Then, if you are really into [g.cards](https://g.cards), INTC, opening 4-5 production facilities. NVDA looking for partnership in future, USA has microchip act. That could be next great pick. Since, I guess republicans will win next elections which will strenghten investing in domestic production. (Im on other part of world so you could know more). If you wanna go really WSB mode - TSLA. Great car, great CEO, WSB favorite, large volume, increasing market, increasing public investment in green energy. Maybe its not too late to join in. So, if you really want some value - i had IS (ironsource) - mobile game marketing platform from Israel. Now its really undervalued at 2.80$ (it was trading over 10$ last year). Pretty new one, more risky as there is a lot of competition. Hmmm.... what did I have more. Ah yess, the GOOG. Alphabet. Whatever name is. Trading at 2300$. I mean. Yea. I would stay away from Meta, fb, twtr, nflx and adbe. They already hit their highs and competition is comming to get em. What else can you look. Amazon, shopify, and other platforms are great ofc. I do not know how good will they perform as it is growing market with lots of competition. From all of this mentioned - my top picks are AMD and IS. You can check NU - Warren Buffet pick for financial technology. Affirm also good pick. Last but not least U (unity) and MU. I know its maybe too much chipmaking list but MU seems fine. Unity - well - everybody knows Unity, new age shit that I hate but it is the future.
Surprised by all the confident “no” responses. These recent ipo’s and high-risk “disruptive” stocks that haven’t even turned a profit are the first to sell off at the beginning of a correction or bear market. This doesn’t mean that ARKK’s dump alone confirms a bear market, but it adds weight in support of more pain to come on the markets. Look at the dotcom bubble. All of the “innovative” internet of things stocks sold off at a much faster pace than profitable and more reliable stocks like IBM and MSFT.
What if I percieve external factors that don't line up with these multiples? For example, years ago, IBM was behind the Mao. Technology behind all three games consoles. Later, it was AMD? IBM basically laughed all the way to the Bank, while everyone else seemed to be looking at their spreadsheets paying no attention to what IBM was doing for the gaming sector.
I think the difference hinges on that "organic" quality of the late 1990s bubble. By "organic," I mean that it's the kind of bubble that forms when a new technology comes along that really does transform society. At first there's a huge misallocation of capital, but the vast pile of cash allows the leading companies to lay down an infrastructure for the next generation. The massive valuations in the 90s allowed Microsoft and Cisco and Intel to create the foundation for Facebook, Google and Amazon, not to mention transform the way society itself operates. Same thing happened with railroad companies in the 1880s. A massive bubble formed and ended up bankrupting a lot of people, but at the end of the day, we had railroads that allowed the next gen companies to exist (same thing happened in the 20s with manufacturing and in the 70s with electronics). Totally agree that the valuations are still too high, and I've also noticed that some of them seem to lose more money even as their revs go up. The companies that survive eventually have to be priced on their actual earnings not the imaginary future ones. Microsoft is a classic example of a stock that used to be priced as a growth name (like Zoom) but eventually had to be priced as a value one (like IBM).
> Not sure if that’s a simple mistake, a Freudian slip or just a joke. None of the above. It was intentional. And I absolutely would argue they are no longer worthy of the Aveo um. Never really considered a video rental service to be the strongest of hyper growth play and, as we see, it’s pretty obvious they have no moat… And I would further argue that the rest have a tremendous growth runway ahead of them… as evidenced by recent earnings reports. Apple is still absolutely demolishing even the most bold of analyst reports. Amazon is hitting a rough patch with their e-commerce branch but is investing billions into the logistics of being the means of premier production, sales, and delivery in that sector. AMZN, GOOG, and MSFT are all in the infant stages of their cloud services. A segment that alone likely justifies their forward P/E’s. And with all the above mentioned companies… you can likely ask “what’s next” as none of them have plans to sit stagnant and go with what currently works. No, I don’t think they’ll go the way of IBM. And yes, I think at multi-trillion dollar valuations they each (sans NFLX) have a surprising amount of growth ahead of them. You do t have to agree… that’s what makes investing.
I can see where a lot of stock isn’t worth its valuation. All the crypto bullshit for instance. Pure vapor. I see that right away. But there are still companies that make an actual product for which there is an actual market, right? It’s not all nebulous gas, is it? Who cares that $HOOD tanks, or $DOGE, there’s nothing there. But Coca Cola? Disney? IBM? Microsoft? Apple?
Funny you say it’s not likely FAAMG stocks will be replaced as you’re replacing the n with an m. Not sure if that’s a simple mistake, a Freudian slip or just a joke. Whatever the case may be, I don’t think anyone would argue that NFLX is no longer FAANG worthy, FB FAANG status is hanging by a thread, and AMZN has been a disappointment for anyone still holding it from 2 years ago. I’m not saying these AAPL, MSFT, AMZN, FB, GOOGL and similar companies aren’t going to “be around” as people like to point out. I’m not saying they’re not going to remain hugely profitable. I’m saying you can’t expect the kind of returns they’ve produced for the last 10 years. The stock prices have more than priced in massive future growth. While they may remain hugely profitable, you can’t expect the same growth from now multi trillion dollar companies. The already inflated stock prices could easily be stagnant compared to other tech in the coming years. Profitability is one thing, growth is another. IBM is a perfect example of that.
I mean, he’s right… Amazon’s share price underperformed long before the recent market crash. But… comparing it to IBM is very disingenuous, in my opinion. Comparing the top stocks of today to the top stocks of 20 years ago is a fallacy. Sure… something could replace AAPL and AMZN just like something replaced IBM and GE. But is it that simple? Do companies rise and fall along the same linear timeline like clockwork? Is the literal ecosystem of today’s that has consumers buying more and more similar to the engagement of these companies from 2 decades ago? I don’t think it’s that simple… and while someone could pop up and displace all the FAAMG stocks… I don’t think it’s as likely as it has been in the past.
From what I've been reading, they do more than just pay people to shop groceries. They offer grocery services/products to other grocery stores as well. Catering stuff, smart carts, will do deliveries for other companies, run their websites, sells ads. They are becoming more and more of a tech company, they are even hiring really compeitively right now in tech. Looking at what limited financials we do have, their business is growing and they turned a profit at some point (don't know if it's continous). Other gig apps (at least food delivery related ones) haven't all turned a profit The company has growing revenue (almost $2B last year) , possibly still profitable and has multiple revenue streams. These kind of companies get a take rate (instacart's is 5-8% [maybe](https://www.digitalshelfinstitute.org/blog/how-brands-can-win-on-instacart)), meaning they get a percentage of money based on what's bought. Instacart advantage is that they aren't just selling meals, they sell groceries and things; with groceries alone you are looking at signficant bigger orders, which generally speaking can be better when average orders greatly outweights the fixed costs. A lot of the costs of the actual deliveery are offset by subscriptions, service fees, delivery fees and tipping. For the future, it looks like the company is looking into building automated warehouses similiar to amazon does for it's many sellers. https://www.warehouseautomation.ca/news-notes-1/2022/3/23/nbajakzgonlv73da1sfjzosfkoppt2 They also seem to want to just sell grocery tech too: https://techcrunch.com/2021/10/19/instacart-acquires-caper-ai-a-smart-cart-and-instant-checkout-startup-for-350m-as-it-moves-deeper-into-physical-retail-tech/ Bought a bunch of tech patents: https://newsroom.ibm.com/2021-02-09-Instacart-Acquires-Over-250-Patents-From-IBM I mean I don't know if Instacart is worth $24B but they seem a lot more interesting than other gig app services that have never turned a profit, have nothing uniquie, and are worth around as much right now. I'm personally a big fan of the app as a user.
I’d put your extra money into a Roth IRA account so it can grow tax free. I didn’t see you mention you had one. Also, it might be better to look at index funds or ETFs instead of individual stocks. Look at IBM for example. You’d have thought they were the leaders in computing ten years ago. Now it’s just bag holding. Individual stocks are more risky but with the potential of bigger returns. At your age you could probably handle the risk tolerance. But to answer your question, yes, some people rebalance their portfolio every year.
I agree you should not put all your money into one stock, that's why I said "stocks" I used AT&T as an example for a simpler illustration. There are plenty of other solid companies to flesh out a diversified high yielding dividend portfolio. Verizon, IBM, Unilever, Dow, Intel and Walgreens all come to mind, along with most of the consumer staples sector (Kraft, ConAgra, Campbell's, Coca Cola, etc) when it's not extremely overbought like it is at the moment. If you do go the index fund route, I'd recommend SPY over QQQ. QQQ tends to carry more speculative tech stocks, which usually get clobbered harder in downturns and recover more slowly. After the 2000 crash, the S&P took 7 years to hit ATHs again, while NASDAQ took 15.
I was born in Daly City. Lived there until I was 8. Moved to GA, where I lived until I joined the Army. First duty station was Ft Hunter Liggett, CA. Was there for a couple years, then was stationed in TX, AZ, and LA. Got out and moved back to CA. Worked for IBM in San Jose until 2006, when we left. I know CA. Amazing weather, tons to do, fantastic food. I personally hate the politics (sitting in stop and go, bumper to bumper traffic, because they wouldn't widen a section of the 101 because it was the natural habitat of a fucking butterfly, for example). However, it's mainly the effects of the politics, not the politics themselves, that bother me about CA. The state legislature is incapable of developing a cohesive plan to support the power and water needs of the state. Now read my posts again. Do I hate the state? Not really. It's just mismanaged as fuck, and the results have been a detriment to the state.
This is the comparison that makes sense to me, not the Netflix bs. People do some headline reading and thing they know something. I live manufacturing and if you're listening to the promises of CEOs (except Elon, of course 😉) you are simply hearing that company's propaganda. Go listen to those that have worked in a bunch manufacturing and tech industries AND THEN went to work at Tesla, THEY tell the real story (Joe Justice and Farzad Mesbahi come to mind). There is NO competition, literally ZERO! All EV manufacturers will be supply constrained in some way for the foreseeable future. When is the next nearest competitor's brand new EV only factory coming online, 2025-26?! I've posted this before but I'll throw it out there again. Tesla is doing a stock split again, probably in the 4th quarter, and shares will likely be under $100 again. Tesla will double its valuation (or more) in the next 2 years. Maybe it'll be "stupid retail investors" buying in because it's "cheap" again or maybe because some of the stuff Tesla is doing will make it worth it (more worth it). "Back in the day" very few would have thought that Apple would be one of the largest, most respected tech companies in the world. They would have told you it would have been IBM, MICROSOFT, HP, COMPAQ. Some made it, some didn't.
Timing the market is active management. Meaning you're selling and buying from quarter to quarter, week to week, month to month.. you're not just buying the dip. You're reading the news and forecasting stock movements in order to determine when the dip occurs. Time in the market is buying, walking away, and hopefully selling near the peak of the next bull market, because otherwise you'll be looking at a worse return. By definition, timing the market means buying low and selling high. Time IN the market has no such determination with respect to what is high and what is low. you sell when you have profit. It's not just two investment strategies here. One requires a great deal of research, the other is luck (in choosing a company that prospers for that entire length of time, and the state of the market or your shares when you go and get that money). So you're post is nothing but a complete misdirection of what timing the market actually is, and misleads people into thinking it's a casual choice like investing into SPY that requires little research and little maintenance. It's the opposite, It requires daily maintenance and a daily research. Investing is work. You need to do work to make your money work. This results in market timing because you can see the trends when the research is done correctly. Time in the market is a bullshit casino where you plop cash on a stock based on rumors and hope it does well over the next decade. There's no research required, it's optional TIME IS YOUR MONEY MAKER. You're really limited here to index funds or managed funds, as anything else might result in a complete loss.. say if you invested in Blockbuster, Blackberry, or Nokia, or complete stagnation like if you invested in IBM. Coming out with these bullshit comparisons that use stacked data to make a point only re-enforces the lazy attitude that many novice investors think the stock market is.. a friggin bank where you put money and walk away and take a look at it 10 years later. That's not investing, that's a quick way of hiding cash for 10 years and not knowing what you'll end up with.
Yea I can see them doing well and I think I see where the enterprise spending is going. They are adding features. Just looked over all their services including cloud stuff and I can see them having a strong hold over enterprise customers long term. Unreal is cheaper per seat but I dont see as many services so you have to provide them yourself or use 3rd party. Of course Unreal does have a proven track record for AAA games and many enterprise customers already but those are all established. In many ways its like seeing IBM back in the 80s. No one thought that anyone could ever compete. But MSFT took all the small developers... and eventually they became big business. Then it was steamroll time. I think the bulk of the startups the last 15 years went to Unity. Unreal didnt start relaxing license fees till recently. Maybe 5 years ago. They also opened it up at that point. But Im thinking its too late. Kind of like how IBM and MAC tried to play catchup but it was too late. The ball was already rolling. Of course my worry is profit still. Unlike an OS, the market is much smaller. But of course they also charge a lot more for service and license to offset. Tough call. What if Unreal decided to push their own cloud services and such? I can however see Unity as being a major buyout target for the big 3 (Azure, AWS, GC). One thing is for sure though, the current market is bearish. So not going to rush in yet. Ill give it a week or so.
BA has the most incompetent managers in the business. How do you fuck up a duopoly with only one main competitor that is run by 4 different governments in Airbus? They sat on their ass with their duopoly and now reap the consequences. Instead of reinvesting into the business; they used the FCF to bouy up their stock during the good times. Yeah, no way Boeing will go under but it’s dead money for the foreseeable future. Same as other once large players like intel, IBM, GE, etc
I've always thought a great way to price small cap stocks is to ask yourself, if you had $100 billion (or some obscene amount of money, but not richest on earth), how much would you be willing to pay to own this company. Obviously TSLA is $1 trillion, but the point of the question is, how much are you willing to pay for control of the company. How much are you willing to pay to buy enough of TSLA to be able to walk in there and tell some manager there to kick rocks - again, assuming you had enough money to do this. Frankly, there are very few other companies I would be willing to gain control of before TSLA (MSFT, NIO, and IBM -yes I kno it's an odd choice).... Tesla is one of those companies that is massive and yet is also poised to grow significantly. I personally would want to know more about the viability of Optimus. But ultimately, I would pay $100b for 10% of Tesla (so $1T market cap). I would think for most things, 10% wouldn't be enough to get what I want in terms of strategy/direction, but it would definitely buy me a say. However, anything over about $1200 per share would mean I wouldn't be able to buy enough shares to have an impact, so I would probably lose interest. However, if I had some rich friends, we could pool our billions together, so $1200 is reasonable given expectations of growth.
Calling companies recession proof is absolutely the worst advice you can give anyone. In case anyone forgot Xerox, Kodak, Sears, Blockbuster, IBM, the railroad barons and their companies, and other household names that people at the time said will never go under throughout the decades. Recessions show what people need and will spend money on and what companies have a product that can't be wedged out by undercut prices, a better model, or will adapt with changing technology and habits of people. That being said, I don't think Apple or Microsoft are going anywhere in the next decade but investing slowly to DCA instead of throwing everything you can every check towards the market and living in poverty sounds like a miserable time during a recession.
I worked at ACN for 4 yrs. I know IBM well, as I worked on consulting projects on clients that also had IBM guys on site. yes, this yr XOM is doing better than AMZN. this is a risk off market. doesnt mean XOM is a higher qualty stock than Amzn or XOM will do better than Amzn next 5 yrs. Btw, my cost basis in Crwd is $70. so I m still up, altho lots of gains have evaporated past month. also i sell covered calls each week. pretty juicy premiums.
Quality company doesn't equal quality stock. It was, and still is wildly overvalued. Everything is getting hit currently but the ones that are the most overvalued will take the brunt of that hit. It's why the older tech companies aren't seeing the same hits. They went through their wildly overvalued phase years ago. Take a look at IBM. They are still up because they weren't overpriced.
[INTC is only up 21% in the past 5 years.](https://www.google.com/finance/quote/INTC:NASDAQ?sa=X&ved=2ahUKEwj75o2Vx9P3AhWUW80KHdO2Db8Q3ecFegQIJxAi&window=5Y) Can't wait to see INTC and IBM get kicked out of the DJIA in favor of post split AMZN and GOOGL.
As far as I know, NASA does not have a quantum computer. The leading companies working on it are Google, IBM, Honeywell Quantinuum, IonQ, QuEra Computing in the US and the Alpine Quantum Computing in Europe. Those are the ones I know have solid scientific background.
Especially in electronics. I'm an electrical engineer and most good topologies have already been designed. Advances is the "raw materials" (semiconductors) drive new technology at the moment. If IBM is pushing out a ton of patents, sounds like they make novel but useless new ideas.
What does the SPY stand for? -You mean like morally? -No, what do letters mean? -Lol, what does the IBM stand for, nothing, it just sounds professional. -Actually, IBM stands for international business machines. -Get the fuck out of my office.
Other times a smaller tree will come up strong while other tall trees are actually rotten inside and just continue to live more dead than alive. Buy the FOREST! Eg Microsoft vs IBM. Most people here don't know that IBM used to be one of the strongest companies and the biggest software maker in the world about 10 years ago.
Not all of Mr Buffet’s investments are winners. IBM comes to mind. He’s well read so I don’t think he is uninformed about cryptocurrency, I believe that it’s outside his circle of competency and he just doesn’t get it. Why he believes that it will drop to zero is beyond me.
Hugely bearish in Amazon: 1.) The famed Bill Parcells used to say, "You are what your record states you are," and Amazon's share price has been dead money for the past 1.5 years. 2.) AWS is a great profit center but it's becoming a ultra competitive market with some of the best of the best, Google, Microsoft, Oracle, IBM all competing for business. Whenever you have a competitive market, profit margins erode - which is what will happen with Amazon. 3.) Trees don't grow to the sky. Amazon is such a large market cap of the overall market, and so many desperate parts, that it has become a digital conglomerate, which like the bricks and mortar type, usually don't do well long term. 4.) Their retail business is a low margin, almost loss leader, business. 5.) Streaming business - super competitive and as we have seen with the recent collapse of Netflix and the entire streaming subsector, the profit margin outlook for this subsector is expected to go nowhere but down. 6.) Labor issues - they have one of the largest workforces in the USA. Big problems on this front (unions, etc) and it could become a GM-esque type of problem.
And yet patents they hold don't convert to revenue or increase share price. That is all I need to know about their patents and IBM. Seriously, IBM is terrible. If you ever do any proper due diligence on it it's like a pimple that you squeeze and the puss just doesn't stop seeping out and you are like wtf did all that come from. It's a rotten terrible company.
Keep as far away from IBM IBM is getting out of the hardware business, the top hardware talent is in Austin and the best of the best jumped ship mainly to AMD to focus on hpc and AI which ibm exited .any body left is either focused on retiring soon or were defined jobs when interviewing with amd, nvidia , Apple,Facebook or aws. Just their cloud grew but the pie grew substantially and ibm’s growth is significantly smaller then aws, azure, Google , oracle and others. It’s a dieing company focused on financial engineering, these was a lot of technical talent but execs were focused on their own money and now the technical talent as left
IMO, PayPal is going the way of IBM/Cisco/Oracle, etc. Not necessarily a bad thing, but they’re getting beat by the new fintech players and they haven’t pivoted. I expect their growth to continue to drop going forward, and pretty much be a dead stock. The fact of the matter is, unless you pivot like MSFT/AAPL, you’re gonna get eaten. You can’t just keep the same business model forever.
> Why has this company failed so hard? prof. Jeremy Siegel of Wharton discusses IBM vs. Standard Oil of New Jersey (aka Exxon) in his 2005 book *The Future for Investors* as a case study of what he calls "the growth trap". the TL;DR is IBM was overvalued and paid lower dividends and underperformed Exxon for decades. from the book: >“IBM beat Standard Oil by wide margins in every growth measure that Wall Street uses to pick stocks: sales, earnings, dividends, and sector growth. IBM’s earnings per share, Wall Street’s favorite stock-picking criterion, grew more than three percentage points per year above the oil giant’s growth over the next fifty years. As information technology advanced and computers became far more important to our economy, the technology sector rose from 3 percent of the market to almost 18 percent [while the oil industry shrunk as a percentage of the market] >If a genie had whispered these facts in your ear in 1950, would you have placed your money in IBM or Standard Oil of New Jersey? >If you answered IBM, you have fallen victim to the growth trap. >Although both stocks did well, investors in Standard Oil earned 14.42 percent per year on their shares from 1950 through 2003, more than half a percentage point ahead of IBM’s 13.83 percent annual return. Although this difference is small, when you opened your lockbox fifty-three years later, the $1,000 you invested in the oil giant would be worth over $1,260,000 today, while $1,000 invested in IBM would be worth $961,000, 24 percent less. >WHY STANDARD OIL BEAT IBM: VALUATION VERSUS GROWTH >Why did Standard Oil beat IBM when it fell far short in in every growth category? One simple reason: valuation, the price you pay for the earnings and dividends you receive. >The price investors paid for IBM stock was just too high. **Even though the computer giant trumped Standard Oil on growth, Standard Oil trumped IBM on valuation, and valuation determines investor returns.**
And I get that... But you still have to ask yourself, if you could only invest in 10 stocks, would IBM be on that list? SCHD has done well, no doubt. The IBM holding is just a deal breaker for me, and that's OK. Just like it's ok for the expense ratio of other ETF's to be a deal breaker for you.
r/dividends loves SCHD, but I just can't get on board with an ETF that has IBM in its top 10 holdings. Makes zero sense to me and makes the question their whole strategy. I prefer DVY and DGRO, which have the same goal, but better holdings in my opinion.
*"If your buying anything remotely around Tech, you will be hugely rewarded. Thanks."* ​ Not really, GE, Ford, IBM, Boeing are science/technology based companies - how are they doing if you held them for 10 years or more. - Lucky to break even.
You can't effectively "passively" invest in individual stocks. You can passively invest in diversified ETFs (such as SPY, not necessarily QQQ) or broad-based mutual funds. One trap investors fall into is thinking that market leaders will remain market leaders indefinitely. I was born in 1970. In my lifetime, IBM, MO, XON, AT&T, MSFT, CSCO, GM, GE, AAPL, and many others have been the largest company in the world at one time or another. Most of those companies peaked, and then underperformed the market. Kodak was one of the largest companies in the world until digital cameras wiped out their market. All companies eventually get dated and lose their mojo, but names cycle in and out of indexes and mutual funds.
That's peanuts. NKLA had an over 30 billion market cap at its peak. Off the top of my head, QuantumScape i think got close to 100 billion. Seriously, there are worse companies at higher market cap today than there was in dot com. People like to compare these dot com bullshit companies to the money printing wonder FAANGs today, but that isn't a fair comparison. You compare FAANGs to the SUNW, ORCL, IBM, DEC, HP, MSFT, CSCO of 2000. You'll find that there are a lot more similarities there.