Every investor has a goal of getting lucky and eventually finding the goldmine of stocks - those that cost dirt cheaper to buy but eventually become fabulously pricey. This happens when a company with low market expectations takes off to the surprise of everyone - except for those few lucky investors that got in early. What have been some of the most profitable stocks in history?
Berkshire Hathaway is an investment firm that was taken over by Warren Buffet in 1965 and is currently the ninth largest public company in the world. In 1962, one share of Berkshire Hathaway’s cost $7.56. After Buffet begun changing the company’s investment strategies and adding on new clients, the company began to experience rapid growth that has not stopped to this day. Today, buying one stock for this company will cost you $170,420 each as one of the biggest increases in share price, in the history of the stock market.
Poseidon is a nickel mining company that literally struck it rich in the late 1960s by finding a massive metal deposit in Western Australia. It caused Poseidon’s share price to shoot up from 0.8 Australian dollars to 12.30 dollars within a month, petering out at 280 dollars a share! This phenomenal growth virtually overnight was short, and even became known as the “Poseidon bubble” to refer to other similar types of situationally based and steep value increases. Someone who bought 3,500 shares in 1969 for only about 2,800 Australian dollars would be a millionaire today.
Microsoft is synonymous with cheap stocks that have become highly profitable over time. With the garage business turn global trailblazer dream actually coming true, the business began as a team effort by two kids with an interest in computers - Paul Allen and Bill Gates. Microsoft, still backed today by business mogul Bill Gates, was actually turned down by a few tech companies during its first years. When it started out in 1987, shares were as cheap as $0.08 each. Now, they are worth over $36 each. If you had invested $3,000 in Microsoft in 1987, you would be a millionaire today.
Cisco Systems has followed a similar trajectory, debuting on the market at $0.08 a share and peaking during the tech boom at $77 for every stock. If you had invested only $1,000 in Cisco in 2000, you could have become a millionaire in a decade’s time. Even if you decided to stick with the still popular and successful company, your stocks would be worth almost $21 each - an impressive mark up from its buying price.
Like Microsoft, Google is a household name for a small, innovative company that was able to make it big and change the world. Google debuted on the market at the respectable sum of $85 a share and is now worth over $1,000 per stock. With such a large increase in value and popularity, it is no wonder we have adopted this company’s name into our every day vernacular.
Although many have tried, but finding the common denominator between these companies and their soaring stock prices is a difficult task indeed. At times, like with Poseidon, the profit can be fleeting and the result of fortunate circumstances. In other cases, like with many technological companies, it seems as if the market is ready for that type of business and they happened to be in the right place at the right time. With others, like Berkshire Hathaway, smart investment strategies seem to make the difference. Look out for these qualities in this century’s next most profitable stock.
Author: Nate Miller