RONALD WAYNE’S STORY
Owning a tenth of Apple today would net you $100 Billion and that’s set to even increase in coming years. But Ronald Wayne sold that same share for a mere $800 four decades ago.
The little-known Apple co-founder sold his 10% stake in the company back in 1976 – never guessing that the company would be worth its 2019 high of $1 trillion. Ronald Wayne has said in subsequent interviews that the “very traumatic” failure of his slot machine business, the debt of which he had spent one year voluntarily repaying and lack of knowledge about the tech industry inspired his actions.
That wasn’t the last of his missteps. In the early 1990’s, Wayne sold the original Apple partnership contract paper, signed in 1976 by Jobs, Wozniak, and himself, for US$500. In 2011, the contract was sold at auction for $1.6 million. Noel, Noel.
It can be argued that Ronald Wayne is just plain unlucky but his unfortunate actions just boil down to poor investment skills. Here are three things to note in order to avoid making similar mistake(s):
- Research, research, research: One of the reasons Ronald lost out on keying into the Apple investment was his lack of information on the future of Tech. While it can be argued that tech wasn’t a major subject in the seventies, there was still enough information on tech and its future. He could have avoided his mistake by doing some research, going to the library or simply seeking informed counsel.
- Be patient: Being patient with your investment means that once you have selected the asset to invest in, you should not be bothered by short-term volatility in the value of the investment and stay invested for the long-haul. This can be dicey, but that is where all the knowledge garnered from research comes to play.
- Have a Goal: Ronald didn’t key into the goals and vision of Apple. A good investor will always have clear goals and a basic understanding of what the investment/company is about. It is very important to have a plan to achieve set out goals. Variations most likely tend to divert an investor from the agenda. Having a plan of action within a defined period of time for a particular return on investment is a sign of a good investor. They are prepared for the uncertainty of the market.