I was struck by what Packy McCormick shared on his outstanding "Not Boring" blog just recently:
Take a moment to absorb that final statement.
It appears straightforward, yet it's a concept you must fundamentally understand if you aspire to excel as a disruption investor. At RiskHedge, we devote exceptional attention to this principle.
Allow me to illustrate with several cases. . .
Have You Realized That Metal Braces Are Increasingly Scarce?
In the not-too-distant past, it seemed countless adolescents endured uncomfortable, distressing metal contraptions affixed to their teeth.
Then, an enterprise called Align Technology Inc. (ALGN:NASDAQ) engineered a novel approach.
They developed a superior method to essentially create orthodontic devices from plastic. Dubbed Invisalign, these "aligners" straighten teeth just like traditional metal versions.
However, when smiling, you don't display a metallic gleam — because they're constructed from transparent polymer.
Invisalign can also correct your dental alignment quicker than conventional braces (twelve to twenty-four months versus thirty-six months).
Between 2009 and 2021, Align's shares climbed from $8.52 to $737.45, delivering investors maximum returns of 8,555%.
Recall Arranging Holidays Before Internet Access?
What a challenge. The sole way to determine airline routes required telephone calls. It was tremendously inconvenient.
Subsequently, digital disruptor Priceline, now Booking Holdings Inc. (BKNG:NASDAQ), emerged.
With minimal effort, you could compare any flight or accommodation globally.
Put simply, Priceline transformed travel into something considerably more convenient and economical, and its stock value skyrocketed without hesitation.
From 2001 through 2021, BKNG surged to peak gains of 29,000%
Notice the three keywords in both scenarios?
Packy knew what he was talking about.
Superior. Quicker. Economical
This constitutes the framework for identifying the next extraordinary disruptive investment. Naturally, discovering these stocks requires effort. . .
But history's greatest market disruptors made significant advancements across all three dimensions.
Alphabet Inc. Class A (GOOGL:NASDAQ) wasn't the inaugural search engine... but it was unquestionably the finest.
Google's PageRank algorithm delivered substantially improved search outcomes compared to any rival, propelling its widespread adoption.
And it subsequently became one of the most successful stocks of its era.
Meta Platforms Inc. (META:NASDAQ) wasn't the first social networking service. But it proved considerably swifter at implementing innovations than competitors, thanks to exceptional engineering prowess.
Its shares climbed 1,688% from August 2012 through August 2021:
Then we have. . .
Illuminia
. . . Illumina Inc. (ILMN:NASDAQ). . .
Researchers have long recognized that DNA contains our health blueprint. The issue was that examining DNA traditionally required enormous expense and time.
The Human Genome Project, completed officially in April 2003, consumed 13 years and $2.7 billion to analyze a single individual's DNA. Then Illumina, the preeminent manufacturer of DNA sequencing equipment, created a breakthrough. A single Illumina device — the NovaSeq X — accomplishes that entire task within hours for just $200.
Illumina anticipates achieving complete genome sequencing for merely $100 within several years. That represents approximately 1/130,000,000th of its cost merely two decades ago . . . or 99.999997% less.
Illumina's technology has continuously decreased DNA sequencing costs for years. This triggered exponential growth in healthcare applications and its stock value:
And one mustn't overlook Amazon.com Inc. (AMZN:NASDAQ)...
Virtually everything Amazon undertakes involves being superior, quicker, and more economical. This approach transformed Amazon into one of history's most remarkable stocks.
So while researching your next investment opportunity, consider: is the company delivering solutions that are superior . . . quicker . . and/or more economical than any competitor?
If affirmative for one criterion, you're proceeding correctly.
If affirmative for all three, you've likely identified an exceptional prospect.
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- Chris Reilly: I, or members of my immediate household or family, own securities of: None. My company has a financial relationship with: None. My company has purchased stocks mentioned in this article for my management clients: None. I determined which companies would be included in this article based on my research and understanding of the sector.
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