Look, I get it. Everyone’s trying to find the next Amazon or Apple before they become, well, Amazon or Apple. But here’s the thing most people miss: there’s actually a pretty simple way to spot these future giants, and it doesn’t involve crystal balls or insider trading (sorry, not sorry).
The secret sauce? It’s all about efficiency, baby.
Think about it this way: companies are basically like people, except they survive on market share instead of coffee and existential dread. And just like people, they eventually… well, let’s just say they don’t live forever. Remember Blockbuster? Yeah, Netflix didn’t just beat them with better movies – they made renting movies so much more efficient that Blockbuster looked like they were still using carrier pigeons.
This whole process has a fancy name – “creative destruction” – coined by some Austrian economist who probably never had to explain why his portfolio was down 20%. But the concept is solid: new, more efficient companies constantly replace old, clunky ones.
The Magic Two Questions
So here’s my foolproof test for spotting winners. When you’re looking at any company, ask yourself:
1. Is this company making something way more efficient than what’s already out there?
2. Is this company using new tech to make their own operations more efficient?
If you get a “yes” to either question, you might have a winner. If you get a “yes” to both? Start doing your happy dance.
Take Ford back in the day. Henry Ford didn’t just make cars – he made them efficiently. The Model T went from $850 in 1908 to $260 in 1925, not because Ford was feeling generous, but because they figured out how to build them faster and cheaper. Sales went through the roof because, surprise, people like good stuff that doesn’t cost a fortune.
Modern Examples That Actually Matter
Today’s version? Look at companies like Corning (GLW). They’re not just making glass – they’re making fiber-optic components that make data centers work way better. That’s efficiency gold right there.
Or consider how AI is basically the ultimate efficiency booster. Companies that figure out how to use AI to do things faster, cheaper, or better are probably going to eat everyone else’s lunch. And with all the geopolitical craziness happening (looking at you, Middle East), companies that can quickly adapt their supply chains using smart tech are going to come out ahead.
The beauty of this approach is that you don’t need to be a Wall Street wizard to spot these patterns. You just need to think like a lazy person who wants everything to work better with less effort. Because that’s basically what efficiency is – making life easier.
The Bottom Line
Stop trying to predict the future and start recognizing efficiency when you see it. The companies that make things work better, faster, or cheaper are the ones that’ll be running the show tomorrow. Everyone else? Well, they’ll be joining Blockbuster in the “remember when” hall of fame.
Now go forth and find those efficiency champions. Your portfolio will thank you later.