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ILNK: The Importance of Disruptive Technology and Lower Prices(1)
by: Glotech (49/M) 4/24/00 5:45 am
Msg: 26971 of 27072
America's economic history is illuminated by stories of quick fortunes made by daring entrepreneurs with new technologies-railroads, motorcars, computers and most recently the Internet.
I have been studying how great entrepreneurs made their fortune-both in the past and today. I am writing this post to share what I have found.
Flash back???
It's 1850; and the railroad is growing like a vine towards the west. And as you know thousands who invested in companies like Southern Pacific, Great Northern Railroad, and Union Pacific made a great fortune in their time. Backers of James Hill's Great Northern Railroad made an enormous fortune after they bought a bankrupt railroad and turned it into America's first viable transcontinental line.
Now it's 1908; and you have opportunity of financially backing a young, wild-eyed mechanic, whose new system for making motorcars promises to revolutionize the industry. It's a true story-that "wild-eyed mechanic" is Henry Ford. And, his early backers turned $10,000 investment(s) into over $25 million stake(s) in Ford Motor Company.
Now we are in our generation time and it's 1971; and one of your neighbors, someone called Andros Krof-he's a Hungarian immigrant, tells you that his company, Integrated Electronics, is going to make computers so cheap that everyone can afford one. It seems impossible-your calculator just cost you $300 and computers cost more than your house. But, he's your neighbor? so you give him a $1,000 initial investment. A few years later, your neighbor becomes the most celebrated genius of your hometown, now called "Silicon Valley." But by then your neighbor is known by his Americanized name--Andy Grove-and his company, now called Intel, has made you one of the richest man in the country.
So what do all these stories from the past have to do with you?
Well, they all have something in common-a single secret to wealth. And once you know the secret, finding investments like these in the present isn't nearly as hard as it may seem. I'm going to tell you what it is-but first I want you to know that what I'm going to tell you isn't widely known on Wall Street. That's part of the reason in fact that the market panics nearly every year. And, as I think you'll see, the real secret of wealth is still very much a mystery to most investors. For example, at the last Berkshire Hathaway annual meeting, Warren Buffett indicated that he wasn't buying any of the technology/Internet stocks because he doesn't understand them? the world's best investor is ignoring the largest creation of wealth in a generation.
I'm not surprised. Investment professionals, it seems, have never invested where most wealth is created-in revolutionary new businesses. Even back when the first railroads were built, the world's top money men were blind to the opportunity. In the 1840s, England's great Prime Minister Benjamin Disraeli noted with amazement the banker's fear of the new railroads. And the great J.P. Morgan himself turned down Henry Ford for a loan in 1908, while he was forming Ford Motor Company. Imagine the most famous investors of the era missing the biggest investment opportunity of their lifetimes.
continued????.
Glotech |
