"A great company is not a great investment if you pay too much for the stock".
"The intelligent investor is a realist who sells to optimists and buys from pessimists".
My father was a great believer in the stock market. He was spent a great deal of time on it. He had some notable success with Braniff Airways. My mother told me once that Braniff stock had split and split and split. (A stock split essentially means that the price of the stock had doubled. The company splits the stock by issuing two new shares in exchange for each old share. The price of each share is cut in half, which brings it back down to some reasonable level, presumably a price that more people are comfortable with.) Did my Dad's diligent research and brilliant analysis inform his choice of Braniff stock? Or was it just good luck? I have no idea.
I had similar good luck with Intel Corporation. That happened due to three people:
- E. Ray Bareiss, who was the head of software development at Impres, a small computer graphics firm in Austin, Texas back in the 1980's. He hired me, and was instrumental in the company using an Operating System from Intel. I spent a year or so mastering that O.S.
- Joe Hoover, an Intel salesmen in Austin who gave a presentation on the Intel 432 that intrigued me to no end.
- Chris Doutre, who I met at Impres. He went to work for Intel a couple of years later and he recruited me to go to work there. I never did figure out what Chris did.
Intel had an employee stock purchase plan. I signed up for it because of my Dad's belief in stocks and because I believed in the technical stuff Intel had been telling me. It wasn't because I did any analysis of the value of the company. It worked out well enough. If I had held onto the first 100 or so shares I got instead of selling them, I'd probably have a considerable nest egg, but I was broke then, needed the money, and while Intel looked like a good idea, no one knew it was going to grow into the behemoth it has become.
Update 2 weeks later, I finally remembered what Joe's last name was.