Chart of the Month: Incredibly Shrinking Shares

Most of the investment crowds’ research and forecasts measure the supply and demand for a company’s products or services. But never forget the most important factor in what moves a stock price next – the supply versus demand for its shares. 

This chart shows that almost half of all Apple shares (44%) have disappeared from the open market, no longer available for a new buyer to bid on.

We wanted to share the fingerprints from one of the largest buyers of stocks in the world, to help solve a mystery for investors wondering how there can be a relentless increase in a stock’s price regardless of economic conditions.  Some companies like Apple (they are not alone) are generating so much recurring free cash flow, that even after investing more to expand business, spending on research and development, making acquisitions, and growing its dividend – that there’s still more than enough cash left over to buy back its own shares.

If there is demand for any asset in dwindling supply, prices can rise.  Some things are not complicated. 

“Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” – Steve Jobs

Bonus Chart of the Month: Mailbox Math

What you are looking at is our calculation we call Mailbox Math. It is easy to do, for any stock. You can use the back of an envelope – there’s no A.I. needed. All you need is your cost basis on one share of stock, along with the current dividend per share. So, in this case when Apple began raising its dividend in 2013, each share cost $14. At that time, the dividend was $0.44 per share, giving you annual dividend yield then of 3.1%.

If all you did was hold onto that same share, your current dividend in 2026 is now $1.08 per share. Your original $14 purchase is now yielding 7.7% annually ($1.08 divided by $14 = 7.7%).

The reason we call this Mailbox Math is it’s a simple calculation we can do at any point along the way for the only thing that matters to each individual investor – what are YOU being paid on YOUR invested dollars. Too many investment professionals overcomplicate things and get distracted by a dizzying number of variables. It’s the only investment metric that you can hold in your hand to know what is real.

In only a few years, the income yield from this Mailbox Math is more than the most complicated financial plans, projections, and “safe withdrawal rates” estimate an investor can take from their account to live on.

To be clear, Apple is one of the most exceptional companies in history to use as an example. But we didn’t cherry pick it for a high dividend yield to explain Mailbox Math. Just the opposite is true. Over that same period of time, 2013-2026, the average current yield was 1.2%. Low current yields for a stock that is consistently raising its dividend can add up fast, into substantial Mailbox Math down the road for patient stakeholders.

Stakeholder Yield is a Powerful Combination

We like to combine the power of compounding data and lessons from these two charts over time. We wanted to share one of our favorite scores we use in our Stock Tournaments, to rank every holding and to find the next potential candidates for our portfolios – we call it Stakeholder Yield.  We add the net share buyback plus dividends paid, to calculate a company’s Stakeholder Yield for its investors. Of course, most companies don’t have enough free cash flow to aggressively buy back shares on the open market AND consistently raise dividends AND still keep extra cash on their balance sheet.  That’s why we don’t invest in most companies. We hope you can see another reason why we actively manage our concentrated portfolios, believing original homework will matter more and more.