Stocks That Could Have Made You A Millionaire

Stocks That Could Have Made You A Millionaire: Many IPOs are met with excitement, as investors scramble to get in on the next big thing. They buy up shares of the newly-public companies at comparatively low prices, hoping that the following years will bring dramatic success and massive profits for all who were willing to back an unproven business. 

Most of the time, no massive profits materialize, and in some cases, investors lose their initial outlay of cash. But once in a while, these companies soar. They dominate their respective industries, delivering extraordinary value to early shareholders in the years and decades that follow.

These are five stocks that could have made you a millionaire – and, in fact, made many of their early investors a personal fortune: 

Steve Jobs + Steve Wozniak = Billions

The story of Steve Jobs and Steve Wozniak has become the stuff of legends – two college dropouts going after an absurdly lofty goal in the unglamorous setting of Jobs’ garage. They named their fledgling company Apple, and the goal was simply this: to develop computers small enough to put in every home and office. 

No one thought they would succeed, considering that the big excitement of 1975 was IBM’s release of the first portable computer. It was a 55-pound behemoth that cost between $8,975 and $19,975. At the time, this mammoth machine was considered an impressive step up from its half-ton predecessors.

Despite the naysayers,  Apple [AAPL] had a viable product in 1976, and the rest is history. Apple was the first organization to reach a market cap of $1 trillion, and in early March 2020, it was valued at $1.287 trillion. Considering its 1980 IPO offered share prices of $22 each, that’s quite an achievement. 

An investor who bought and held $1,000 worth of shares around the time of the IPO would have stock valued at approximately $651,000 as of March 2020 – a return of approximately 51,000 percent. In the same period, the S&P 500 returned only 2,627 percent. 

Online Bookstore > Behemoth: The Amazon Story 

When Jeff Bezos launched his small online bookstore in 1994, consumers were skeptical. Some were attracted to the convenience of browsing the shop from their home computers, but most preferred traditional brick-and-mortar retailers. As computers became standard in homes and offices nationwide, e-commerce started to catch on. Investors were intrigued, and Amazon held its IPO in 1997. 

The company grew rapidly from that point on, increasing its list of products. First, Amazon [AMZN] added music and videos, then it expanded to a wide range of goods and services. It opened its platform up to other retailers, essentially offering them an opportunity to take their business online and expand their consumer base. By 2015, Amazon surpassed retail market leaders like Walmart in terms of market capitalization, and today it is valued at $1.615 trillion. 

Investors who had the foresight to invest in Amazon shares at the time of its IPO paid just $18 each. Those who bought and held a $1,000 investment now own stock worth $1.58 million – a growth rate of more than 120,000 percent. Note that the S&P 500 returns for the same period were just 257 percent. 

Google Takes Over The World

Access to the world wide web opened up extraordinary possibilities. Average people suddenly had the opportunity to view an unlimited amount of information – a critical step in the democratization of knowledge. The biggest problem for early users was finding their way around. With so much data available, it was nearly impossible to systematically locate the most accurate, up-to-date, and relevant web pages. 

Enter Larry Page and Sergey Brin, two Stanford University students. They had a mission: to organize the world’s information and make it universally accessible and useful.Their first search engine was developed in their dorm rooms – an algorithm they named Backrub. 

They quickly rechristened their creation as Google [GOOGL], and they officially launched the company in 1998. Silicon Valley investors were immediately interested in being a part of the project, and an IPO followed in 2004. On its first day of trading, shares opened at $85 each, and by the time the market closed, they were already up 18.05 percent to $100.34. There was never any doubt that Google would play an important role in the future of technology. 

Today, the original Google has been reorganized, making it a subsidiary of parent company Alphabet. However, its Nasdaq symbol hasn’t changed. Alphabet is the third largest organization on any US exchange by market cap, and it is currently valued at $1.02 trillion. Those who bought and held $1,000 worth of stock at the original $85 per share price have seen the value of their  investment increase to $30,460. That’s growth of more than 291 percent. Over the same period, the S&P 500 has returned just 176 percent. 

Microsoft Conquered Desktop PCs

In the late 1960s, the original Star Trek series showed a world in which computers were universal tools. However, a majority of the show’s fans couldn’t conceive of that vision becoming a reality. However, Bill Gates knew that computers had a place in the very near future, and by 1975, he was ready to create that future. 

Gates and a friend founded Microsoft [MSFT] to develop early computer software. By 1986, investors wanted in, and the company went public. Just a year later, at the age of 31, Gates became the world’s youngest billionaire, and today, he is the second-richest person in the world, just behind Amazon’s Jeff Bezos. As of August 2020, Microsoft has a market cap of $1.614 trillion. 

When Microsoft held its 1986 IPO, shares were valued at just $21. Investors who bought and held $1,000 worth of stock at that time have seen their funds grow exponentially. The same $1,000 investment would be worth nearly $2 million today. That represents growth of 211,000 percent, as compared to the S&P 500’s growth of 1,174 percent. 

Berkshire Hathaway Is A Titan Conglomerate

Warren Buffet, the investing genius known around Wall Street as the Oracle of Omaha, is the brains behind Berkshire Hathaway’s runaway success. Buffett has an uncanny ability to identify businesses with unlimited potential, and through the Berkshire Hathaway holding company, he ensures that his shareholders profit from their success. 

Some of Berkshire Hathaway’s wholly-owned subsidiaries include GEICO, Dairy Queen, and Duracell. Berkshire Hathaway also has holdings in American Express, Coca-Cola, Kraft Heinz, and Wells Fargo – just to name a few. It has delivered average returns of 19 percent per year to its shareholders as far back as 1965, and today it is one of the largest publicly-traded companies in the world. 

Berkshire Hathaway stock is exceptionally costly, with share prices well over $300,000 each. That puts the company out of reach for many investors, but those who can buy in tend to be fully satisfied. Those that invested $1,000 in Berkshire Hathaway stock when Buffett took charge in 1965 would own $26.4 million today. Compare that to the mere $200,000 a 1965 investment of $1,000 in the S&P 500 would have delivered. 

It’s true that past success doesn’t predict future performance when it comes to any stock purchase, but market experts continue to recommend these five companies to clients. Each has shown its ability to innovate and adapt to a rapidly changing environment, and all have overcome obstacles and thrived through economic lows and highs. The five are still considered strong additions to any portfolio, and it’s even possible that holding these shares long-term could be a millionaire-making opportunity. 

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.