Past ≠ Future: The Investor’s Trap

The Apple Paradox: A Lesson in Long-Term Investing

Let’s look at a fascinating case study that reveals a key truth about investing: the past doesn’t dictate the future.

The subject? Apple Inc.

Apple’s journey is a textbook example. In its first 22 years, the stock delivered just a 100% return, equivalent to a modest 4% compound annual growth rate (CAGR).

This stretch was anything but smooth. The stock suffered brutal drawdowns falling 70%, 80%, even 90% in 1984, through the 1990s, and after the dot-com bust. For early investors, it must have felt like a losing game, years of holding on, with little to show and plenty of pain.

From Stagnation to Soaring Heights
Here’s where it gets remarkable. In the next 22 years, Apple went on to deliver a mind-blowing 92,000% return, at a 35% CAGR.

This reversal highlights a crucial point: a stock's dull or disappointing past doesn't mean it’s done. Many investors likely gave up after years of flat returns, missing out just before the real breakout began. Someone who bought in 1987 and exited in 2002 might’ve felt it was a wasted 15 years only to miss the historic rally that followed.

Shedding the Shackles of History
This tendency to let past performance cloud judgment is one of the biggest traps in investing. What a stock has done has no bearing on what it will do.

The Indian Context: Public Sector Surprises
This isn’t just an Apple story. In India, public sector undertakings (PSUs) across banking, defence, and other sectors have delivered massive gains in the past four to five years—after decades of underperformance. Again, the same lesson applies: past neglect doesn’t rule out future growth.

Embrace Openness and Adaptability
The key is staying open to change. A company’s future can shift dramatically, due to tech shifts, policy moves, leadership changes, or broader trends. Don’t anchor your views to what the stock has done.

If a stock is running, don’t hesitate—run with it. Let it run.

Today’s Daily Byte

The month closed on a volatile note. It started flat but turned shaky after Trump threatened 25% tariffs on India over Russia ties. Markets opened lower, recovered briefly on hopes of a reversal, then slipped again. Expiry-related moves added to the swings. A choppy end to an already turbulent month.

Reading Time : 6 Minutes

A 20-Year Perspective on Indian Asset Classes

When it comes to long-term investing, the usual assumptions don’t always hold up. Over the last 20 years, Indian midcaps have quietly outperformed not just large caps and Smallcaps but even gold. The data tells a compelling story about where real growth has come from.

Reading Time : 2 Minutes