If you can’t pick early, pick when ripe
We can all beat ourselves up for not investing in corporate giants in their infancy, but Apple’s return to growth shows it’s never too late to back a winner.
It was a bittersweet week for Apple, the biggest company in the world by stock market value. First the technology giant got into a political row about America’s travel ban on seven Muslim-majority countries. Chief executive Tim Cook said this would have hit co-founder Steve Jobs — adopted in California but the biological son of a Syrian migrant — and pointed out: “Apple would not exist without immigration.”
Second, after reporting its first fall in full-year sales and profits since 2001 last October, the company announced a return to growth. It declared record revenues of $78.4bn (£62.3bn) in the three months to December and all-time peaks in earnings per share and sales of iPhones. Nearly two-thirds of revenues were generated outside America.
So never mind the macro-economics and global politics; what does it all mean for investors? ……
…… Alan Steel, founder of the Scottish asset management firm of that name, told me: “The telecommunications giant Vodafone was the most valuable company on the London stock exchange by 1999, but it has been a mediocre investment since then.
“Much the same thing happened at the bank HSBC or oil major BP in the 2000s.
“Is it time for an Apple turnover? You might do better to pocket gains and recycle into Baillie Gifford’s Global Discovery fund.” This unit trust seeks capital gains wherever they may be found around the world but pays no income.
Professional stock selection and automatic diversification within unit or investment trusts mean these pooled funds should deliver a less bumpy ride and could prove a better bet for most investors. These features are particularly valuable in sectors such as technology, where specialist knowledge has real value. …..