The lies about "If invested $1000 during IPO for MSFT you would have made $1.6m"

[Broly46]

The lies about "If invested $1000 during IPO for MSFT you would have made $1.6m"

We had been promised we can all achieved common prosperity, an utopia society, investors just have to invest as little as $1000, and everybody each of you can achieve retirement and freedom. Everybody win, a win and win ponzi, nobody could loss, not a zero sum. YES, an ultimate life goal of making all guy rich and nobody get left behind and get poorer, an utopian life!

Let’s make some most ideal outcome, assume we achieve the bestest ever outcome, we have US 200m population in 1986, say 10% population is 20m capable adult invested each $1000 into msft, each of them to be worth $1.6m after some 40 years... let’s do some simple maths.

In 1986, Microsoft launch the IPO.
$1000 times 20,000,000 investor, capital would be sum up to $20 billions...

In 2023, everybody win, we all achieved common prosperity, everybody retired in this utopia society because the president said so, thus you do not ask why!

$1.6m times 20,000,000 investor,
$32,000,000,000,000! $32 trillions!

When I look at the market cap of the Microsoft today it’s just worth some $3.2 trillions. Which is 90% shortfalls!

I can’t imagine how are Microsoft going to pay each investor $1.6m, if each of them invested during IPO, which would sum up to $32 trillions to make everybody achieve utopia life. It’s bizarre calculation. Obviously the ideal utopia society is never possible from be very beginning, it’s never possible to get the $1.6m from just $1000 no matter what they promised, it has to be some of the most lucky person in the world to be entitled the one who get into the IPO.

Apparently this game have to be rigged to make the payroll look possible, with a lot of creative calculations, not all guy could be invested on the IPO price, some investors have to loss to make up for the gainer, apparently 90% would be the loser to make up the 10% gainers which seem very fair. Because $3.2 trillions compare to $32 trillions idealistic outcome. Idk what to say about the 401k pension fund, it sound like a utopian wishful thinking at best.

But I don’t care about all the buzz, instead just toss all the capital into property, obviously it look to me there is so few property investors that could possibly loss money, I’m confident to say 90% property investors still in profit while 10% are losers (included wars torn property in Ukraine). It is unthinkable, maths is absolute, zero sum, obviously we got what we pay for, we pay for ponzi we get ponzi result.

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[Captain Corporate]

You do realize that there are other things you could invest into instead of Microsoft as well right? I mean sure you wouldn't have made enough to retire maybe, but you could have invested on IPO or whatever the lowest it was, and then sold it at the highest it has ever been, and retire with that money probably. But the problem is that we do not have enough shares to go around the whole world, which means that it could be something else, I can do it with Microsoft, you could do it with apple, the other could do it with google, some did it with bitcoin and so forth. Which is why it could work, just not for a single company but as a general idea.

[Broly46]

...other things you could invest into instead of Microsoft as well...

Yes... I had yet to read an article that suggest otherwise. Tbh every article on the internet wouldn’t hestitated when it come to advocating turning $1000 into $1m in some of the hottest trades. The most overused narratives such as $1000 in blue chip IPO is too common.

I couldn’t yet understand the trick behind diversified into some other investment. Obviously, the aforementioned curiosity is also a good reason I would likely loss more money trying into the new venture to learn yet another losing endeavour.

[mk4]

The lies about "If invested $1000 during IPO for MSFT you would have made $1.6m"

You probably misunderstood what they're trying to say with this. Do you really expect every single person to be investing in a company in the first place? Or better yet, a company that's actually just in it's early stages of growth?

It's more of a fun fact about how taking risks can potentially pay out really well. Not necessarily the fact that everyone should be risking their money into IPOs lmao.

[adaseb]

Back in the late 90s and early 2000s I’ve met and heard about tons and tons of people who became very rich because they were early investors in Microsoft. These days you don’t really hear about it. Part of the reason is maybe because when the bubble dust it took over a decade for Microsoft to break its ATH.

But it was pretty much the equivalent of buying Bitcoin early. Just like buying Tesla when it went public. One thing you need to keep in mind is that most would of sold with a 100% or 300% gain. Many never held it this long since IPO. Same with Bitcoin or the Ethereum IPO.

[davis196]

It's the same as saying "If I knew the winning lottery numbers, I would've hit the jackpot." Well, winning on the financial markets is supposed to be easier than winning the lottery jackpot, but in reality, it's pretty difficult as well.
Nobody is saying that the financial markets can guarantee everyone's wealth and prosperity. If anyone has told you this, he is lying to you.
If you ask me, the financial markets are:
1.A system for voluntary redistribution of resources.
2.A system that has to reward profitable companies(by making their stock prices go up) and punish the unprofitable companies(by making their stock prices go down). Profit means efficiency. The market must reward efficiency first and foremost. That's the whole point of market economy.

[Smartprofit]

It's the same as saying "If I knew the winning lottery numbers, I would've hit the jackpot." Well, winning on the financial markets is supposed to be easier than winning the lottery jackpot, but in reality, it's pretty difficult as well.
Nobody is saying that the financial markets can guarantee everyone's wealth and prosperity. If anyone has told you this, he is lying to you.
If you ask me, the financial markets are:
1.A system for voluntary redistribution of resources.
2.A system that has to reward profitable companies(by making their stock prices go up) and punish the unprofitable companies(by making their stock prices go down). Profit means efficiency. The market must reward efficiency first and foremost. That's the whole point of market economy.

Stock markets are not designed to make private investors rich.  Although most private investors will probably disagree with this statement. 

Stock markets allow the redistribution of national wealth from rich people (who managed to earn money in the past) to entrepreneurs who show energy and initiative at the moment. 

Through the stock market, new companies are able to raise funds in their own country as well as in other countries. 

Attracting money from other countries allows you to reallocate money from richer countries to poorer ones.

[Hydrogen]

The lies about "If invested $1000 during IPO for MSFT you would have made $1.6m"

I tried to find a source for the claim.

If you had invested $1,000 in Microsoft at its IPO, here’s how much money you’d have now

Published Mon, Nov 19 2018

A $1,000 investment in Microsoft on the day of its initial public offering, or IPO, on March 13, 1986, would be worth more than $1.6 million today, according to CNBC calculations. That includes price appreciation and dividends.

https://www.cnbc.com/2018/11/19/how-much-a-1000-dollar-investment-in-microsoft-at-its-ipo-is-worth-now.html

I think their claim revolves around DRIP (dividend reinvestment plan) of microsoft stock from IPO over the course of many years.

Where profits earned from microsoft dividends would be reinvested to buy more MSFT stock, over the course of decades.

[Broly46]

You probably misunderstood what they're trying to say with this... Not necessarily the fact that everyone should be risking their money into IPOs lmao.

Agree. It’s not worth to risk the money. Do we have a lot more horror story of guy get screwed in stock market? Remember retail on the GME? Also the billionaire one from Tesla? It seem baffling to me, well, I can imagine all their loss would contribute into the rich getting richer, notably the banker. Many may not get to know but 530, 2015 is remembered to be the day shanghai stock exchange wipe out a lot of hard earned money from many traders. Whether it’s IPO or it is blue chip, they’re not good to risk on.

Back in the late 90s and early 2000s I’ve met and heard about tons and tons of people who became very rich because they were early investors in Microsoft. These days you don’t really hear about it...

But it was pretty much the equivalent of buying Bitcoin early...

The 90s riches had to be rather poor by today scale. It’s true there is some talk of guy make money on the dotcom boom, that’s also how some friends introduce me to punting into the stock, btw I had to cut tie with this friendship after all the bs I had went through, I remember the moment I quit stock investing and call them all are bs, I also remember all my friends yell at me for being losers and rage quit while they never stop boosting about their trading profit one after another, yup it feel unimpressive and loser and humiliated, but it doesn’t make me more triggered. Apparently WB never invest in MSFT even though WB and Bill Gates are good friends, we should also not invest based on friendship.

[NeuroticFish]

let’s do some simple maths.
...
$1000 times 20,000,000 investor, capital would be sum up to $20 billions...
...
$1.6m times 20,000,000 investor,
$32,000,000,000,000! $32 trillions!

When I look at the market cap of the Microsoft today it’s just worth some $3.2 trillions. Which is 90% shortfalls!

Well, this is not how this math was done. Just google a little for it. For example one thing you've missed from your calculations was the stock splits (plus you may have wrongly assumed that all the initial investors would buy 1000$ worth of shares)

Had you invested $1,000 in Microsoft at its IPO, you would have acquired 47 shares at $21 per share. Adjusting for the stock splits, you'd actually have 13,536 shares today with a cost basis of $0.0729 per share.

Given Microsoft now trades at $238.73 per share, that translates to a return of 327,401%.

In dollar terms, that $1,000 investment in 1986 would be worth a whopping $3.23 million today.

And you can add on top of this also the dividends.
Really, you could have been just researching a little before posting...

[mk4]

Agree. It’s not worth to risk the money. Do we have a lot more horror story of guy get screwed in stock market? Remember retail on the GME? Also the billionaire one from Tesla? It seem baffling to me, well, I can imagine all their loss would contribute into the rich getting richer, notably the banker. Many may not get to know but 530, 2015 is remembered to be the day shanghai stock exchange wipe out a lot of hard earned money from many traders. Whether it’s IPO or it is blue chip, they’re not good to risk on.

I mean, profit from stock markets have never been guaranteed to start with. There will always be people that will be making bad/trades investments, just as how there will always be people that will make bad life decisions. What's the problem here?

[so98nn]

The lies about "If invested $1000 during IPO for MSFT you would have made $1.6m"

You probably misunderstood what they're trying to say with this. Do you really expect every single person to be investing in a company in the first place? Or better yet, a company that's actually just in it's early stages of growth?

It's more of a fun fact about how taking risks can potentially pay out really well. Not necessarily the fact that everyone should be risking their money into IPOs lmao.

..adding to this, it is also next to impossible that every single person who invested in the earlier days will stay or hodl their investments until it becomes X-times what OP is stating here. There are instances when some would just leave right after that stock/share is listed, they would start dumping it after they get their returns.

Now, from this many of them will still retain and believe in the project to gain more money. They will do it eventually if company does it properly. This cycle will keep repeating itself and peeps will actually come and go along the way. Thus, the output that is mentioned by OP is inaccurate.

There are always buyer and sellers on the market. It is always two way process, when one is buying then someone is selling. So everyone could not be on same boat here!

[Broly46]

Stock markets are not designed to make private investors rich.  Although most private investors will probably disagree with this statement...

Yup, I finally realise the ironic of this phenomenon, I concluded (just my stance not anecdotal) stock market is created to defraud innocent people, it has no foundation to be honest, because when a person is facing survival of fittest mode, they cheat through the roof. Any person would cheat when they’re facing death threat, the honest person wouldn’t cheat and become the main target to be defrauded. Politician lied and businessmen lied, surprisingly politician and businessmen could work together in a society because both of them are rampant liars and they have one common purpose that’s to defraud another person.

... What's the problem here?

Very big problem, that’s also the whole reason why bitcoin was invented in the wake of crisis, and Charlie Munger feel upset and wish bitcoin never be invented. How does it add up, I wouldn’t explain, it’s a mistakes which should never be widespread.

[NotATether]

If everyone invested money in microsoft then I don't think there would be enough shares to sell to everyone, right? That's how corporations work - CMIIW.

Which means, if everyone had shares, the stock might go up but everyone would not have initially invested $1000, maybe they would've been able to get only $10 or whatever a single share price for MSFT was in 1986.

[Broly46]

...It's human nature to want to go with...

I think you’re trying to say something like gambling addiction that could also be the norm and a human nature on stock market? Although there is often talk about stock market is business it’s not a gambling contract, Charlie Munger would never consider stock market to be gambling contract.

[stompix]

The lies about "If invested $1000 during IPO for MSFT you would have made $1.6m"
~
Let’s make some most ideal outcome, assume we achieve the bestest ever outcome[/b], we have US 200m population in 1986, say 10% population is 20m capable adult invested each $1000 into msft, each of them to be worth $1.6m after some 40 years... let’s do some simple maths.

The title was about a person investing, it didn't claim if everyone had invested everyone would be rich making millions!
If every single person in this world would have invested 100$ in Bitcoin in 2009, then the market cap of Bitcoin in 2009 would have been 800 billion or twice what it is now and nobody would have made a penny as it is!

Microsoft IPO raised $61 million, so do the simple math from that, not on how much could have been achieved if everyone would have poured $1000.That's how investment work, some invest and get profits, and some stand on the side and criticize things and try to find a flaw 30 years later, nothing different from Bitcoin.

[Bushdark]

So many lies every and the people that used to fall for this kind of lies are people who are money conscious. All they want to hear is pay $100 to get $1000 in a due time. If you invest because they are not going to tell you the terms of condition of you investing until you subscribed to there offer. Most altcoins do ow this pattern too.

They will keep telling us to invest so that we will become a millionaire within a year. If you buy and hold, you might end up losing all your funds without you getting it back. I had been in this kind of shit before and I never recovered my money.

[franky1]

alot of people think market caps and company evaluations means there is some nest egg of reserves sat backing those large numbers
there never is

when bitcoin went ATH at $70k
producing a mcap of 1,2trill
it did not mean there was 1.2tril for each investor of 1btc to take out 70k
it meant there was many buyers at lower prices. causing the price bidding war to go up.. however less and less willing buyers the higher the price went until there was one willing buyer left willing to pay $70k. before there was no one left willing to buy. and so the price topped out at $70k
market caps and company valuations are empty stats of just silly multiplications of one small market order multiplied by amount of coins/shares. its got nothing to do with hidden reserves

infact when bitcoin peaked at $70k only 1 person gained at that final top order amount. that final seller before other sellers started selling for less after selling to the other buyers that only wanted to pay 69k 68k 67k

its not a "oprah: everyone get a car" prize everyone receives. its just whomever makes a sell at their sell price gets their sell amount if there is a willing buyer. if your not selling your not getting that amount

same goes for the "tulip mania" .
out of the hundreds of thousands of tulips on the market on the day of the tip of tulip mania 300 years ago.. only 2 people gained from the tip of the 'tulip for house value' amount.
other people were selling for other amounts lower down that day

..
as for claims of ponzi.. nah
a ponzi is where money is handed into a guy. and he promises ongoing returns if you keep your value with him. where he then gives new investors money to old investors as a % of locked value.
but where that guy is not doing anything else

..
share/crypto trading is different
shares are changed ownership where each person decides what a value should be based on many factors

EG hawaii has highest electric on the planet. so their mining costs are upto 90k. so if they can buy bitcoin for $16k-$85k they are happy very happy
america have mining costs of about $29k(residential/hobby) so they are happy buyers at under $29k and happy sellers at over $30k

in short 90% of the world are happy buyers at $22k and it flips once their break evens are met.
so when america start mining-to-sell at $30k plus. hawaii and japan and germany would still be happy buyers as its still cheaper then their mining cost methods to get coin.
of course as prices go up. less people are willing to buy.

bitcoin has a purpose. a utility. its not just something that sits in some locked custodian. there is more to it then that.
bitcoin doesnt offer residual/passive income even after you sell. nor residual income while holding.. you just buy it at whatever the market is wanting to sell it for, and sell it for whatever the market wants to buy it for

bitcoins prices will naturally go up. as there are other factors at play

the trick is do not base any "value" at thte tip of a tsunami wave(ATH) as they come and go quick and dont happen often

real value is the natural sea level rise at the bottom (periodic low)

[STT]

Some places will have a graph that tracks all the share splits and dividends for reinvestment over time.  Most places dont account for value like that.  The claim I heard and/or saw is that 18k in MSFT was 1 million by end of the decade, '90 to 2000.  The Dot Com boom basically and similarly, $1000 in CSCO was a million by end decade.

That would have been a very nice return, it does ignore inflation of course but so do alot of things accurately.   When I hear of GDP growth of 0.1% I do wonder if its growth when considering the nominal losses to inflation so who knows but tech did grow alot at times.   Only in recent years has it started to act well and rise alot, though it's pulling back right now.

[adaseb]

To the above poster mentioning GME.

Yes many got rich when they bought at $10 and sold at $200 a few weeks later. However look how many people lost money who bought the stock when it dipped thinking it would go to like $10000 because the hedge funds needed to cover.

Now whenever there is a pump on GME many people buy the top and end up losing money. So it only worked for those that bought right after Covid and now those gains are very hard to get.