Predicting Winners
In 2002, IBM, reverently known as Big Blue, was a $130 Billion computer giant with unlimited resources and a formidable position in the computing world. They launched an enterprise cloud solution called Linux Virtual Services. In comparison, Amazon was just a $10B e-commerce store at the time that sold books.
By 2006, IBM had shut down its cloud storage service. Amazon started theirs.
Today, IBM is worth $124B and Amazon is worth $1.31 trillion — 10 IBMs — largely due to the success of their cloud computing platform that generated $80B of revenues in 2022.
In 2023, global cloud computing is estimated to be a $480 billion dollar industry. IBM had the right vision, even before Amazon did, but failed to capture it despite being the first mover. And IBM wasn’t the only one — many tech experts back in 2001 could see that cloud computing was going to be a mega disruptor. However, how many experts would have predicted that an online bookstore would dominate the cloud computing market 20 years later?
History is littered with corporate leaders of their time that eventually lost their dominance. Some names that come to mind are Kodak, Nokia, and Yahoo. Economists call this concept “creative destruction” — new innovations replace older innovations, sometimes even making them obsolete. If history is any guide, today’s dominant companies will also be taken over in the decades ahead.
The inherent risk here is that if you are still currently investing your hard-earned money based on stock picking and predicting the next mega-trend, you could be stuck with an IBM that has trailed behind, while the rest of the world has moved forward. Since 2002, IBM stock had returned +42.35% (that’s in 21 years) while the broader market has returned more than 6 times that, +279.41%.
Most of us would trust an accomplished physician to manage our health, after all, physicians have specialised training, real-world experience and access to tools outside the reach of the general public. Most importantly, they took an oath to prioritize the patient’s health over their own interests.
In the way same, GYC adapts insights from financial science to each client’s individual situation. We look at clients’ financial health holistically and work with them to create a plan that aims to accomplish their unique goals. We are a trusted partner who can help when times are tough.
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