Welcome to part 3 of this series. I don’t know how long the series will go but this topic right here is something that I like a lot. I was reading The Choose Yourself Guide to Wealth last night and he mentioned that Peter Theil (millionaire VC) invests in businesses that are monopolies and can change the world. Peter was the founder of Paypal and a big investor in Facebook. He sold Paypal for billions and me he a fortune in Facebook.
My position is that when you invest in a company that will change the world the valuations and thus the returns are limitless. Think companies like Apple who changed the way everyone uses the cell phone. Everyone either owns an iPhone or owns a phone that has the same design (all screen) of an iPhone. Another is Netflix. Netflix literally changed the way we consume television. It made TV so on demand that sometimes I forget that cable even exists. Lastly is Amazon. Amazon put big box retailers out of business and normalized e commerce. There is a reason all of their stocks have provided their shareholders astronomical returns. If you trace history there fortunes have been made betting on change not old faithful.
So how do you find a company that is going to change the world? Usually it is a company that has a new solution to a big problem. When Tesla as introduced a large part of why they were so appealing was the constantly rising oil prices. Electric vehicles would eliminate your gas expense which was destroying commuters. This was a world changer. It is an was a world changer because nothing like it exists but it has the potential to replace what currently exists. There is massive growth potential there and since stocks grow as the company grows this was a world changing stock.
Another world changing stock are the solar stocks. While those companies have under performed for a long time it seems like they are getting their stride and more and more people are converting and builders are being forced to implement solar into their new builds. If solar replaces standard electricity solar companies will see huge gains.
Speaking of solar, this reminds me that the name of the game here is patience. You don’t change the world over night. Google didn’t become google overnight. Amazon didn’t de-thrown big box over night and neither of the industries discussed above will come to full glory over night. It takes time but when it pays off it will pay off big.
When I am looking for stocks to buy I don’t look for the old giants, I don’t even really look at the current giants, I look at emerging giants. This will require some research, some digging, some faith and the ability to see through the doubts of the naysayers who want to hold on to old tried and true technology. When you find these companies go all in. That is where the true gains are. The Habit, the Under Armour, etc. All these companies, when they come to full glory will give you glorious gains.
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Thanks for reading!
Be great, invest well,