If you Only Knew the Future
Here, let's do a more "realistic" exercise. Why not put something the "common" man might have been willing to "wager" on his Favourite Motor Company, and see what it would have done for us:
Let's take say $500 in November of '87 and toss it into the IPO of Harley Stock, & "Let 'Er Ride".
At $0.4534/share your cash nets you a certificate with ~1102.7 shares of Class "A" common stock - I'll round to no more than two decimals-places from now on, and all Splits and Dividends are re-invested (of course, this is all assuming I can add for sh!te).
For the first three years, Harley didn't do much - not bad, but not "tearin' up the market".
By June of 1990, Harley stock was up to ~$1.76/share, when H-D instigated a 2-for-1 split. Our shares now number 2205.4, with a value of ~$1949.79.
Should we get out yet? That's nearly a fourfold increase in our Investment - but not yet even enough to buy a Sportster 883 (at 1987 prices, even). Let's wait a bit longer, shall we?
Two years later (June '92), H-D has another 2-for-1 split. We now own 4410.8 shares, valued at $6965.97 ($3.16/share, pre-split). - HEY! Howzabout 'Dat Sportster now? We've certainly earned it, waiting five whole years. No? Keep on keepin' on, you say?
OK, if you Insist.
Barely more than a year later, H-D pays-out it's first Dividends - Seven and a Half Mils per Share! (three-quarters of a cent, that is) Our first Dividend Check in July of '93 is a whopping $33.08. It's so small, we tell Harley to just keep it - maybe it'll be worth the Postage to send it to us someday.
But, it's enough to add to our shares - we've "jumped" up to 4417.3: However, H-D stock has come up a bit as well; the value is now $22,431.10! ($5.08/share) Nearly enough for a Custom! Shall we continue, though?
You betcha.
Harley pays-out Dividends, if not regularly, at least fairly often for the next few years:
By the Div-payment in October of 93 we have 4423.12 shares valued at $25,167.44. ($5.69/share)
By August of 94 its up to a WHOLE PENNY for Dividend-payout quite a sum, eh? And hey! we've had another 2-for-1 split in September, with another Dividend in November! If the chart is correct, the price has come back up almost immediately so now we have 8883.8 shares with a value of $58,988.16. ($6.87/share pre-split) I'm Goin' to Disneyland!
Like any stock, there are dips in the price now and again. '95 was such a year for H-D, but it ends well anyway for us, as there are 4 Dividend-payouts. With reinvestment, we now have 8944.5 shares of stock, with a street-value of $63058.73. ($7.05/share)
For '96, Harley started paying-out Dividends on a Quarterly-basis in March, June, September, and December. There was also another 2-for-1 Split near the end of September, so we leave '96 with 17,980 shares valued at $208,209.00. ($11.59/share, Dec. '96)
Our Tenth Anniversary is lookin' GOOD. H-D Dividends are up, stock price is up, we close out '97 with 18,085.65 shares valued at $244,337.13 ($13.51/share). This, for a lousy 500-bucks and ten-years of patience.
1998 brings us to 18,165.4 shares with a value of $378,930.24 ($20.86/share). 1999 ends with a BIG Party after a bit of a price-drop-scare, (Get out! SELL! SELL! SELL! The Sky is Falling! Cruiser-Market's Gone South!) with 18,222.28 shares, worth $583,295.18 ($32.01/share).
Why-Too-'Kay brings us another two-fer Split the last one so far this decade on April 10. Our shares are now Legion (not the technical definition, but rather the allegorical one) with 36,465.22 shares with a street-value of $725,840.20 ($39.81/share pre-split price). Chickenfeed, I say. (Actually, to ME that means quite a bit as I'm fairly intimate with the goings-on of the Chicken Feed Business! Chicken Feed Ain't)
Heck, I'm thinkin 'bout cashin-out right about now, what about you guys? You can't get much more ahead in 13-years than nearly ¾ of a Million Dollars for a 500-clam Investment, eh? I probably spent more money getting' drunk in 1987 than that! And I was only 16 at the time
Such Predicaments; I must Forge Ahead!
By December of '00, we've got 36,528 shares with a value of a whopping $1,659,467.04 ($45.43/share). This is actually down a bit, from a high of over $1.74M in September of '00. Never fear, '01 brings us three more Dividend Checks (Sep. '01 is omitted from the chart I don't know if they didn't pay, or just didn't list it it's calculated as if none were paid) of over $1000.00 each, and 36596.22 shares worth $1,924,229.25 ($52.58/share). '02 has declining values all year-long (GET OUT!! RUN!.... Oh, you know the Drill
.) so we end with a mere 36,696.38 shares worth only $1,695,372.76 ($46.20/share). 2003 Finishes a lackluster 36,857.12 shares valued at only $1,751,818.91 ($47.53/share).
Hey! I've been ripped-off! Gimme my $500 back
Oh, alright. Harley might as well keep it it's not like I'm missing it after 16 years.
We close-out '04 with 37,118.88 shares or $2,146,213.64 ($57.82/share). Now, THAT is more like it we've finally finished a year as multi-millionaires! 2005 sees a bit of slippage: we've grown to 37,562.2 shares, but dropped to $2,023,100.09 ($53.86/share) after some "exciting" market-fluctuations. Now I know why everybody jumped off the top of buildings on Black Monday (because they were stoopid!). If you really want to know do the Math yerself!
2006 concludes this little word-problem with 38,089.58 shares, worth a cool $2,684,172.70 ($70.47/share).
I think I'll cash-out, retire, and buy Ducati
There you have it - what $500 COULD have done for you - if only you'd known.
I leave you all with a bit of advice: Buy Harley Stock (NYSE Ticker: HOG), forget what you think about the Motor Company or the bikes it manufactures, or the people it attracts. It's not over 'til it's over - and I'd say there's still a LOT of growth left in the Marketplace.
If nothing else, you're unlikely to lose anything - but look what you stand to gain.
(keep in mind, I'm nothing but an Idiot - I'm not an Analyst, I'm not a Genius - I'm a feckin' HiSkule Dropout. But even I can hear the Thunder echo from the wall)
