Newbie Stock Question

M

Michael_

I recently decided to look into stock investing and signed up for a paper trading portfolio (virtual money) for being able to practice safely.
I then started to research/analyze stocks and investment strategys.

Yesterday i came across something i do not understand.

Below the stock price of general electric (GE) now and back in 11/03/1995:
stock1.PNG


As you can see it was 41,92$ back in 95. As of now it is 87,33$.

But when i calculate the "what if" scenareo of buying GE stock for 10k on 11/03/1995 for 41,92$ it says i lost more than half my money:
stock2.PNG


How can this be if the stock is worth significantly more now?
 
Michael_ said:
I recently decided to look into stock investing and signed up for a paper trading portfolio (virtual money) for being able to practice safely.
I then started to research/analyze stocks and investment strategys.

Yesterday i came across something i do not understand.

Below the stock price of general electric (GE) now and back in 11/03/1995:
View attachment 299555

As you can see it was 41,92$ back in 95. As of now it is 87,33$.

But when i calculate the "what if" scenareo of buying GE stock for 10k on 11/03/1995 for 41,92$ it says i lost more than half my money:
View attachment 299556

How can this be if the stock is worth significantly more now?
More...
dividends reinvested?
 
It looks like the stock return calculator is not accounting for the dividends that were received over the years. If you look at the adjusted price data from Yahoo you'll see that the actual price on 11/3/95 was $80.45 but the adjusted price was $41.18. If you had bought GE back in '95 and reinvested all the dividends you would be sitting on about a 111% profit (using today's price of about $86.86.
 
Here is a link to the calculator: https://finmasters.com/stock-calculator/

It states
"These figures are based on Alpha Vantage's historical stock data, which takes into account splits and dividends.
The most recent closing price is used for the selected symbol."

So where exactly is the error? (If i understand correctly the calculator is wrong?)
 
Michael_ said:
I recently decided to look into stock investing and signed up for a paper trading portfolio (virtual money) for being able to practice safely.
I then started to research/analyze stocks and investment strategys.

Yesterday i came across something i do not understand.

Below the stock price of general electric (GE) now and back in 11/03/1995:
View attachment 299555

As you can see it was 41,92$ back in 95. As of now it is 87,33$.

But when i calculate the "what if" scenareo of buying GE stock for 10k on 11/03/1995 for 41,92$ it says i lost more than half my money:
View attachment 299556

How can this be if the stock is worth significantly more now?
More...

It's a garbage product. Here's what you get from an even earlier buy-in.

upload_2022-11-15_18-10-7.png


The calculator is broken. Besides, never play the shoulda-woulda-coulda- game mentally. It messes up decision-making.
 
I was going to say... splits & merges need to be checked as well. Things can get a bit wonky with other oddities too... like when another spin-off is made etc... return-of-capital... and sometimes you get paid in stock equity, versus dividends.

That said, I may be over-complicating this for you, and I have to confess I only purchased GE as my first ever stock also. And I sold out shortly after. Basically, when Harry Markopolos jumped the gun and accused them of fraud, I loaded up when the fear and panic swept in... then sold after it began to recover when people came to their senses again.

 
Back then you had "defined pensions" that was killing GE. It is what killed (drove into bankruptcy) GM and Chrysler/Dodge/Jeep.

Here is a little background since then...

As of 2017, only 16 percent of Fortune 500 companies offered a traditionally defined benefit pension plan to its new hires, according to a Willis Towers Watson report. That’s a dramatic drop from the 59 percent of that same group of employers that offered pensions in 1998.

Pension plans are retirement plans that employers maintain and contribute money for employees who will later receive fixed payouts when they retire. Although more and more companies are opting to offer employees a 401k plan instead — which is much more cost-effective for the employer — there are still some jobs that come with a pension.
 
Michael_ said:
I recently decided to look into stock investing and signed up for a paper trading portfolio (virtual money) for being able to practice safely.
I then started to research/analyze stocks and investment strategys.
Yesterday i came across something i do not understand.
Below the stock price of general electric (GE) now and back in 11/03/1995:
View attachment 299555

As you can see it was 41,92$ back in 95. As of now it is 87,33$.
But when i calculate the "what if" scenareo of buying GE stock for 10k on 11/03/1995 for 41,92$ it says i lost more than half my money:
View attachment 299556

How can this be if the stock is worth significantly more now?
More...
%%
EASY\ its not a good growth co\ it has NOT even cleared/closed much>than 1995 HI.
FOR education+ fun check out a good trend like MSFT 1995+ many more time frames.
NOT a stock tip, wisdom is profitable to direct. Split adjusted on1995 MSFT $7 to > $237.777 today ........................................................................................................:caution::caution:
 
I assume whatever chart your using is not adjusting split correctly.

Two different charts both shows GE was around $80 at specified date.
 
Last edited:
You must log in or register to reply here.
Back
Top