Philadelphia Phillies pitcher George McQuillan took the mound on a day that I doubt he knew would be historic. The date was Sept. 6, 1909. It was the bottom of the 4th when Brooklyn Superbas catcher Bill Bergen stepped up to the plate. As the pitch sped towards him, Bergen took a mighty swing. There was a crack at the bat as the ball soared up, up, and over the fence. It would be the final home run of a record setting career from Bergen.
Bill Bergen is such a good example for us. He did something that very few people have ever actually done: hit a home run in a major league baseball game. He played over 11 years, in 947 games, and had over 3,000 at bat attempts. And on that fateful day in September of 1909 he hit a home run. That home run was the second (and final) home run from the worst career batting average in MLB history (0.170).
Pretty much anyone who plays the game will eventually hit a home run. But a good career is much more desirable than a single home run.
Some Tech Home Runs
Nowhere is this principle more easily seen than in the tech sector due to the rapid rate of technological advances. Consider that the top supercomputer from 2009 has now been declared obsolete. If a tech product can go from the greatest thing man has ever made to obsolete in just just 4 years, then what about the common computer, tablet, or phone? Companies are forced to constantly release new products in an effort to keep up with both available technology and consumer needs.
Every year in Vegas the Consumer Electronics Association gives an opportunity for companies to flex their muscles and display their top new tech products. This event really gets the crowd juiced. Here are the top three from this past January according to TechRadar.com:
- Nvidia Corporation (NASDAQ:NVDA)’s Project Shield
- QUALCOMM, Inc. (NASDAQ:QCOM) Snapdragon 800
- Sony Corporation (ADR) (NYSE:SNE) Xperia Z
Allow me to throw in one more product that has also been creating a lot of buzz. The Blackberry Z10 is being called many things, most impressively “the iPhone killer.”
Research In Motion Ltd (NASDAQ:BBRY)‘s Blackberry Z10 and Sony Corporation (ADR) (NYSE:SNE)‘s Xperia Z have more in common than just the letter “z.” These represent two smartphones with the common goal of taking down Apple Inc. (NASDAQ:AAPL)‘s iPhone. Both of these smartphones also represent the best their companies currently have to offer. Both have been received well by many critics. By many standards, both of these phones are home run product offerings.
Nvidia Corporation (NASDAQ:NVDA) is on to something truly engaging with their Project Shield. There are several reasons consumers are reluctant to completely give up their personal computers in favor of tablets. One of those reasons is PC games. Serious gamers haven’t had a mobile alternative…until now. Project Shield now puts the power of PC gaming in the palm of your hand.
QUALCOMM, Inc. (NASDAQ:QCOM) is generating a lot of talk with their Snapdragon 800. This processor, in layman terms, run things faster, improves graphics, improves battery life…you know, all those things processors are supposed to do. This is just the latest in a long line of winning processors from QUALCOMM, Inc. (NASDAQ:QCOM).
So enough with the products, what about the companies?
They say Rome wasn’t built in a day, and in a similar manner company trends aren’t determined in a product offering.
Sony Corporation (ADR) (NYSE:SNE) has been a company that has been consistently trending downwards. Along the way there has been a good quarter here, and a Xperia Z there, but nothing in the big picture that would make an investor excited. If the Xperia has you fired up as an investor, you might want to cool it just a tad. The company’s track record in terms of growth just isn’t all that great.
Looking at QUALCOMM, Inc. (NASDAQ:QCOM)and Nvidia Corporation (NASDAQ:NVDA), they are pretty consistent when it comes to growing their bottom lines. They only thing they seem to be lacking would be a home run. In QUALCOMM, Inc. (NASDAQ:QCOM)’s case, it is kind of hard to garner a lot of excitement for processors. But their established track record of good processors should continue to lead to demand from their many costumers for the foreseeable future.
For Nvidia Corporation (NASDAQ:NVDA), this Project Shield might actually be their home run. PC gaming is currently a $20 billion industry, and still growing–and mobile gaming is expected to triple by 2015. Nvidia Corporation (NASDAQ:NVDA) may very well be able to capture the hearts of gaming fans with this device that is expected to be released in the 2nd quarter. Home run or not, Nvidia Corporation (NASDAQ:NVDA) has been growing both the top and bottom lines consistently for a while now. If Project Shield is a home run product, it just compliments an already good company.
Sometimes I am the first to jump on the BlackBerry bear wagon. But when you zoom way out, you are reminded of BlackBerry’s past. This was a company that at one time was firing on all cylinders. Only recently have they struggled with their products and profits. Many are saying that the Z10 is BlackBerry’s savior. That might be a little exaggerated, but reviews range from good to glowing. Perhaps the Z10 does signal that the once great BlackBerry still has what it takes.
The Babe Ruth of Investing
Not only is Babe Ruth currently #3 all-time in home runs, he is also #10 in batting average. El Bambino didn’t just hit it deep, he consistently performed at the plate. It’s little secret that Apple Inc. (NASDAQ:AAPL) is my Babe Ruth of investing.
This is the company who gave us the iPod–not the first mp3 player, but definitely the one that started a movement. This is the company that gave us iTunes, when critics said no one would pay to download songs when they could be pirated just as easily online. And for the out-of-the-park home run, they gave us the iPad, which has changed the way people compute. That’s a very relevant batting average.
I could sight some of the many stats you’ll find in any Apple article, but I will instead just focus on Apple’s brilliant financial position. Critics will quickly point out that the majority of Apple’s $137 billion in cash is overseas, which is true enough. However, even if you apply the 35% repatriation tax, Apple is still sitting on nearly $90 billion in cash. That’s more than the market cap of BlackBerry, Sony Corporation (ADR) (NYSE:SNE), and Nvidia Corporation (NASDAQ:NVDA) combined.
It is this fantastic history of Apple – home of a series of home run products and the financial backing of colossal proportions – that leads me to believe that the next big thing is right around the corner.
Bergen vs Babe
It is very exciting when new products are released, and many investors believe that one product can make a good investment. But we are not investing in products; we are investing in the companies behind the products.
Bergen’s home run wasn’t enough to change his career. He was still a terrible batter. In like manner, one product offering doesn’t change whether a company is a buy or a sell. One home run isn’t enough to make me invest in Bill Bergen.
With Apple currently trading almost 40% off from September highs, an increasing dividend, and a massive share buyback plan, you might want to go ahead and pick up shares before the Babe Ruth of the tech sector gets up to bat again.
The article Invest in Companies, Not Products originally appeared on Fool.com and is written by Jon Quast.
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