Steve Jobs' Secret To Investing In Public Markets

Authored by Simon Black via,

One of the most brilliant businessmen of our time decided to do nothing.

In 1997, after being kicked out of his own company, Steve Jobs took back the reins of Apple.

At the time, Apple had less than 4% of the personal computer market. And the market didn’t think Apple could do anything more than corner its little niche (while Windows/Intel maintained the lion’s share).

Business professor Richard Rumelt spoke to Jobs in the summer of 1998... He parroted the belief of the time...

“Steve, this turnaround at Apple has been impressive. But everything we know about the PC business says that Apple cannot really push beyond a small niche position. The network effects are just too strong to upset the Wintel standard. So what are you trying to do in the longer term? What is the strategy?”

Jobs answer was unexpected, but simple...

“I am going to wait for the next big thing.”

Jobs knew there wasn’t anything compelling at the time.

One of the greatest visionaries of our time, didn’t try to force a strategy or BS Rumelt with business school jargon about “sticking to Apple’s core competencies” or “improving margins through synergies”…

He just waited until he spotted the next BIG opportunity.

At the time, in the late 90’s, the PC market was changing rapidly. And Jobs knew there would be major, technological advances that he could capitalize on… he had already successfully done it with the Apple II, the Macintosh and at Pixar.

And only two years after Jobs decided to “wait for the next big thing,” he introduced the iPod, which revolutionized the music industry. Then he did it again with the iPhone. The rest is history…

The result of Jobs’ do-nothing strategy pushed Apple to become the first publicly traded company with a $1 trillion valuation.

I’m telling you this story because, often times, in both business and investing, the best strategy is to simply do nothing.

Warren Buffett, the greatest investor in history, is a strong adherent to that strategy.

Buffett says that if every investor was given a punch card with 20 slots, representing the 20 investments you could make in your lifetime, their results would no doubt improve.

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