Betting on the Visionaries

Nov 8, 2012
J. Webster
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If you want to make piles of money in the stock market, then, in most cases, you’ll have to buy stocks in companies very early on and many times when companies are very beaten up. But how do you go about choosing those companies to buy when many times they’ve been almost written off?

Take Apple for example, the big bet to buy the stock took place when Steve Jobs regained control of the company he created. That was the time to make piles of money by buying shares of Apple – before the iPod, iPhone, and iPad. But who would have guessed that Apple would become the Apple it is today.

What about Starbucks, the bet on this company was again when the founder, Howard Schultz, became CEO once again and reinvigorated the company. He turned around the company and the stock.

You’ve often not betting on the stock or the company but on the “visionary”. And this is not so much what vision the leader has for the company but what the stock market believes the leader can do. Whether stock market believes he can eventually accomplish this vision.

That is a big reason people were piling into JC Penney when Ron Johnson took over, since he of course helped developed the Apple stores. The believe was, amazingly, that he could turn JC Penney stores into Apple stores – or at least give the JC Penney stores just a touch of the Apple allure.

Then there’s Amazon’s stock, Jeff Bezos is the reason you own the stock – you’re buying into this vision. After all, the company doesn’t make a lot of money, their margins are tiny, but you’re betting on Bezos vision for the future of how people buy things online.

The question now is what leader can you bet on that’s in their early stages? What leader is there that you can follow and make money buying their stock. Is it Mark Zuckerberg over at Facebook? The stock is beaten up, cut in half from its IPO price of around $40 as it trades for about $20 a share. Do you believe Facebook will be around ten years from now? If so, it might be a time to start building a position in Facebook.

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