$1 billion in profits in a single decade, beginning with $100 -- how'd we do it? Well, we didn't, otherwise I doubt I'd be sitting here typing this on a beautiful August afternoon. But using the always-reliable benefit of hindsight, we've done a quick study of how an unbelievably astute investor might have become a billionaire overnight (or at least, over the years between 1997 and now).Let's fire up the flux capacitor and hit 88 miles per hour to return to January 2, 1997. Yahoo! (NASDAQ: YHOO) would emerge at the end of that year as the best-performing name among our basket of large-cap stocks (similar to the S&P 500 Index). The internet company had its initial public offering in April 1996, so it was just a pup when the calendar turned to 1997 -- the year of the Spice Girls, Hanson, and Titanic.
With the stock trading at just 71 cents per share, our insightful hypothetical investor took a crisp $100 and bought 141 shares. Less than a quarter into that year, Yahoo! had acquired online communications company Four11, which later evolved into Yahoo! Mail. The stock rallied solidly throughout the year, handily outperforming the broader market and using the support of its 10- and 20-week moving averages.
On December 31, Yahoo! was trading at $4.33, a 511% return. The $100 from the beginning of the year had turned into $611.
Next: Step 2: Amazon.com (AMZN), 1998
Beth Gaston Moon is an analyst at Schaeffer's Investment Research.
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Reader Comments (Page 1 of 1)
8-30-2007 @ 10:46AM
dale said...
1998 turned down stock in AOL
and when subscribed said I should invest in this company but didn't....
9-14-2007 @ 1:48AM
Valerie said...
Sounds great, what's new to invest in to become a billionaire in the next 10 years? Are these still good?