Related topics: stocks, Apple, Google, MasterCard, Michael Brush
Priceline: Name your own profit
Anyone who put their money into a broad stock index 10 years ago now knows a hard truth: Markets don't necessarily go up. But before that persuades you to give up, think about the other side of the coin.
Even in a down market, some stocks do go up -- and a few go up enough to make you rich.
Take Priceline.com (PCLN, news). A few years ago, this company looked like another dot-com flameout. But by beating competitors with clever packages and great ads, Priceline flourished. Investors who got in 10 years ago have gained 4,967%. The stock has increased eightfold just since the end of 2008. "Their online offerings like 'name your own price' are resonating with consumers," explains Morningstar analyst Warren Miller.
There's a lesson to learn here -- that washouts can be great places to find excellent, cheap stocks. But it's hard to sort them out, so borrow a tactic from the geniuses in venture capital and own a basket of stocks plucked from the wreckage.
Michael Brush
Here are nine other stocks that could have made us rich over the last few years -- and a few other lessons I hope help us spot the next big winner early enough to score.
Deckers: A shoe-in
Around 10 years ago, you might have noticed a lot of stylish women on the streets wearing cute soft leather boots with fur trim. Even if you don't live in an area where people chase the latest style trends, you could have seen on TV that celebrities like Kate Hudson and Pamela Anderson were sporting these popular boots, called Uggs.
Had you invested at the time in Deckers Outdoor (DECK, news), the company behind Uggs, you would be up 3,300%, according to Schaeffer's Investment Research, which helped us identify some of the top-performing stocks of the decade.
The key lesson: Follow the advice of investing icon Peter Lynch and keep your eyes open, so that you can spot popular trends that bring stock market riches. Just be bold enough to look beyond your own little circle to spot the truly big consumer trends, says Andrew Corn of E5A Funds in New York.
Apple: Buy the future, cheap
It's easy to like Apple (AAPL, news) today as a play on Steve Jobs' mastery of cool design and clever marketing, most obvious in his three i's -- the iPod, the iPhone and the iPad.
But to some investors who made the really big bucks in this stock over the past decade -- nearly 4,000% -- something quite different made the stock a buy.
Sure, they thought Jobs' 1997 return suggested a lasting turnaround might play out, as it did. But the stock didn't start soaring right away.
And 10 years ago, before the dawn of iAnything, value investors still mainly viewed Apple as a stumbling tech company with lots of cash. So much cash, that when you bought the stock at a split-adjusted $10 at the time, you basically got the business for free. Apple's potential "wasn't necessarily obvious back then," says value investor John Buckingham of the Al Frank Fund (VALUX), who has owned the stock since 2002. He was mainly drawn to a financially sound and very cheap company -- albeit one rumored to have some innovative ideas with the return of its iconic leader.
The key lesson: Invest in companies that have lots of net cash to support a growth plan, as long as its industry has a future -- technology yes, buggy whips no.
Google: 'Game changer'
Even though Google (GOOG, news) would go on to revolutionize online advertising, its stock hit the market at around $100 a share in 2004, and stayed below $200 for a few months afterward.
