The edge in being young.
No, I’m not talking about being able to get up in the morning without anything hurting. I’m talking about the true edge in being young – participation in the future.
When you are between the ages of 18 and 30 you are obviously, well, hopefully less wise than you will be in your 70’s. The youthful advantage comes from being able to do more than watch the world change. You can actively participate. You and your friends grew up with the current technology the generation before you is still trying to wrap their heads around. It’s already integrated into your life. And if you invest in disruptive and innovative companies, this can be an extremely strong edge.
If you watch the under 30’s live their lives, you will notice they order food through an app on their phone. They don’t watch TV, they stream on Netflix. They can get anywhere using google maps on their phone. They stay connected and socialize with Facebook and Instagram, and they can order a damn hot air balloon on Amazon.com and have it delivered to their parents house the next morning. Oh, and everything I mentioned above can be done on an iPhone.
So, what did the above paragraph just summarize? It summarized how most young people operate in the modern world when it comes to consuming information and goods. And it was all done through Facebook, Amazon, Apple, Netflix, and Google. Gee, I wonder why these stock have been grouped into their own acronym? These companies are no longer monopolies, but the foundation in which people build their lives around. They are an infrastructure so integrated into living in the modern world, that without using them, you are simply left behind.
The reason I mention young people is because if you had not been paying attention to the habits of the youth, you would have not only missed these investment opportunities (as many have), but FAANG would still be a head scratcher for you.
My father (baby boomer generation) still watches cable television. He still goes to the store to buy things, and still drives to restaurants or calls in for pick up. He has some social media but does not participate. The one service he does use and appreciate is Google search and maps.
These companies have had an impact on his life, but nowhere near what it is for the under 30’s. Removing FAANG form the under 30’s would be like removing a wheel chair from a disabled person.
Buffett has had a huge winner in $AAPL when he bought into the company a few years back, but it had to be pitched to him aggressively by a younger person he works with. Not only fundamentally but on a value metric as well. Think about that! The greatest investor alive had to be persuaded to buy $AAPL….
If you are a young investor out there, you can see things the older, wiser, and richer guys cannot. You can see how goods are consumed, and what trends are developing. You are around it. You are living it.