23 Oct 2025 “I bought Intel at $6”
In light of the fall season, Megan and I recently watched Nora Ephron’s 1998 classic romcom You’ve Got Mail, starring Tom Hanks and Meg Ryan. While this is one of Megan’s favorite fall related movies, it was the first time I had watched it! I enjoyed the movie, especially for its pre-social media vibe, but I have also been thinking about one of the character’s lines.
(Minor movie spoilers ahead) As The Shop Around the Corner faces pressure to close, Meg Ryan’s character, Kathleen, is talking to Jean Stapleton’s character, Birdie, and mentions that she has a little money saved, implying she will be alright if the store closes. Birdie responds with a big grin saying, “if you need more, ask me. I’m very rich. I bought Intel at $6.”
If we assume she made this comment towards the end of December 1998 when the movie came out, she would have been sitting on a 300%+ gain in five years. It is easy to see why she would be feeling comfortable with this investment!
Birdie self-described as rich in 1998 and would likely continue to be fine for the rest of her life, but consider a thought experiment where she diversified her stock holdings instead of maintaining an Intel-only portfolio. Historical financial data is often complex, so this is an estimate, but taking dividends, stock splits, and reinvestments into consideration, Intel has grown at ~3.2% annualized from the end of 1998 until the end of September 2025. We can compare that to the S&P 500, which has grown ~8.5% over the same timeframe.
In dollar terms, if we start with $1m, that is the difference between having a little over $2m today in Intel vs over $8m in a broadly diversified fund!
On the heels of exciting technology advancements in the 90s, Intel continued to soar higher, with seemingly no end in sight. In 1998, Intel launched the i740 graphics accelerator chip and also helped establish the Bluetooth wireless specification. But they eventually topped out in 2000 during the dot-com bubble, and 25 years later, Intel stock has yet to return to those highs. Intel is still around and making important products, so this isn’t an example of a stock becoming worthless (though there are many of those), but it is an interesting example of the way history can rhyme.
Why? Just compare Intel to the Magnificent 7 stocks (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla) of the 2020s. Big returns based on promising technology with an unknown future to come.
While I think Birdie likely slept just fine at night with her Intel stock, this scenario raises many questions for us to consider in the present: How confident am I in holding a large position of a single stock? What is my plan to exit, and how will I know when the time is right? What will I do if there is a big downturn in my specific holding? Do I think this single stock will outperform the diversified market over long periods of time? Am I letting my concern about taxes prevent me from making the needed reallocation?
Many of our clients have experienced outsized returns from an individual stock holding, oftentimes the stock of the company they work for. But it is wise to remember that while these stocks can perform well, they present huge risks to our portfolio if left to grow unchecked and undiversified. Over the long run, which is the time period we are ultimately concerned with, being broadly diversified is the way to most efficiently capture returns relative to risk. Intel is just one of many historical examples of over-concentration ending badly. Picking the next one is a fool’s errand, but assuming your stock won’t be the next might be even worse.
If you ever need help thinking through your financial plan and specifically how to address a single large position like Birdie, reach out to us. We are always happy to chat through the options that you have.
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