Over the past year, Best Buy has returned 59.24%.
Citigroup has returned 78.92%.
Netflix has returned 332%.
That’s real money. If you put $100,000 into Netflix this time last year, you’d have $332,000 today. That money is the difference between having neighbors that drive bouncy cars and having neighbors that own the used car dealership that sells the bouncy cars.
I owned none of those companies at any point in my life, and in all likelihood, I never will. And it’s not because I’m content with being inferior—rather, making that kind of money with Best Buy, Citigroup, and Netflix would be an example of me trying to play a game I’m not cut out for.
As far as I’m concerned, Best Buy has too many similarities to Blockbuster and Borders. It has been an anachronism ever since Amazon went mainstream. People go to Best Buy, … Read the rest of this article!
Like many else in the financial media, I spend my fair share of time thinking about the future of technology companies. From an investment perspective, it is not so much the excitement of tech-related products that draw me in so much as it is the incredibly high profit margins in the industry as well as the immense profitability that results from ease of scalability. In essence, that is the promise of the Internet. You can go from selling 1x to 10x in a way that you never could if your sole operating asset was a restaurant in the rural Midwest.
Having said that, I am also quite aware that, historically, the long-term survival rate of tech companies is quite low and the result of a competitor with a better product tends to be displacement rather than subordination of the inferior product–i.e. If you build a better house, the inferior house … Read the rest of this article!
Barnett Helzberg Jr., whose family sold the eponymously named Helzberg Diamonds to become part of Warren Buffett’s collection of subsidiaries at Berkshire Hathaway, said that the hardest part of growing his business involved (1) the high capital expenditures necessary to open up new jewelry stores and (2) the difficulty in determining the highest and best use of Helzberg’s business opportunities, as it is not always apparent ahead of time whether resources should be dedicated towards strengthening high-performing stores or combating the weaknesses at low-performing stores.
I have made no secret of the fact that Visa stock is the most essential stock that can be owned in one’s collection of investments because of the company’s market dominance (it processes more transactions daily than its nearest competitors Mastercard, Discover, and American Express combined) and the long-term megatrend in favor of electronic rather than cash transactions (this latter insight is not original to … Read the rest of this article!