Sometimes great investments are right under your nose

Let me start out by saying…

I missed the boat on Netflix. I really did. I’m really kicking myself on that now.

Here’s why:

A couple of years ago, I’d say sometime in 2008, I was “geeking out” on some techie gadget message board arguing (well, it wasn’t really arguing as much as insulting each other) with some of the established geeks about the newly official HD format Blu-ray. While they proclaimed that Blu-ray would be an even bigger success than DVD, I firmly believed that the medium of the future would not really be a medium at all – everything would be streamed from the internet. (I honestly believed that! Cross my heart!) I simply based my projection on the success of steaming media from sites such as youtube. It could only get bigger and better, right?

Fast forward a little bit and Netflix announced unlimited movie streaming at a really cheap price.

I eventually subscribed once they had a few more movies and said to my wife “This will be the future.”

Without missing a beat she retorted “Then why don’t you invest in it?”

In silence I retreated to my computer and brought up the stock on yahoo finance.

Hmmm…

I believe the stock price at the time was around $20 a share. I checked the last year on the stock graph and saw that the price had been dropping steadily over the last 8 months.

Hmmmm… I began talking to myself.

We are currently in a recession, we need to save money just in case something happens, our places of work are going through changes, we need to save to buy a house, and the magic 8-ball said to ask again later.

I basically talked myself out of investing into Netflix. It pains me to look at the price of the stock currently. But as a show of my willingness to grow and learn, here is the graph of the stock price:

This isn’t really a question of taking a gamble or not when investing in a stock. Every investment is a gamble (if it’s not a gamble then chances are high you are doing something illegal). This is really a question of sticking to my strongest beliefs.

Just months earlier I argued extensively about my belief that streaming movies and media would be the way of the future. Yet when the time came to put my money where my mouth was, I cracked. I just couldn’t pull the trigger.

I chickened out.

Did I mention I also missed the boat on Jo-Ann Fabric and Crafts? Well funny story…

My younger sister in early 2009 decided that she would learn to make some clothes from scratch for her son in an effort to save some money. She got all her fabric, materials, thread, and tools from her local Jo-Ann Fabrics and Crafts. She showed us her results and soon my older sister and my wife went to Jo-Ann’s and started projects of their own.

At the time all I thought to myself was “Oh great, more girly craft stuff.”

It did not even occur to me to even THINK beyond that. What I was witnessing was not unique. More and more people were gravitating towards homemade items to save money because of the recession. It was actually my wife that recently finally decided to look up Jo-Ann Store, Inc. on Google Finance.

My jaw literally dropped. While I was busy making fun of girly crafts and worrying about the recession, I did not think beyond that and think about recessionary behaviors.

Let’s add insult to injury. Why not? I missed Costco as well.

As soon as the recession started hitting hard, my wife and I got a membership to Costso and she decided that we would shop there so that we could buy in bulk to save money and also save at the gas pump. We also agreed that the only other places we would get groceries would be generally cheaper places such as Winco Foods and Wal-Mart. (I am not even going to look those up anymore).

This is again another case of missing even our own changes and recessionary behaviors.

The lessons to be learned here?

  1. It takes real courage to invest. You may really believe or are convinced in something you can invest in, but the real test comes when you have to actually put your money where your mouth is. Take my experience. I could have lost money, but not acting on something I strongly believed in and seeing how things could have been feels even worse. Determine what is worse for you: Losing money or the regret of not acting on a great investment.
  2. Investing requires thinking outside of the box. This isn’t just some cliché. For me I could not think past my own stereotypes and materialistic habits. All the information and signs were right there in front of our noses, yet I failed to truly see them. Try not to make the same mistakes I made.
  3. Mama is always right.
Comments
5 Responses to “Sometimes great investments are right under your nose”
  1. Bret Simmons says:

    Great information! Bret

  2. Mike says:

    Nice post…I have been hearing from a lot of people about ‘missing the boat’ on NFLX, but you have to question whether that is really the case. From a valuation basis (not purely numbers) I think it has a ways more to go. They have great positioning, market share, and name recognition. Where Netflix is weak is content, which they are working on (I’m assuming). As the company grows its dominance, I foresee better content delivery as studios will concede to more favorable terms/deals.

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