Find out how Myer’s struggle to stay afloat, the far-reaching impact of self-driving cars, and Buffett hating Bitcoin could affect you and your investments.
1. Myer is bursting at the seams
The future is looking quite murky for Myer after a disappointing holiday season, leadership shake-ups, and sales figures coming in well under expectations.
The recently fired former CEO tried implementing a new strategy for growth, but it fell flat and was ultimately unsuccessful in improving the company’s bottom line or fending off competitors.
What does this mean if you’re invested in Myer?
We think Myer shareholders could be in for a very tough time.
Management appears to be in real turmoil with the CEO departing and its largest shareholder launching a scathing attack on Myer’s chairman.
We can’t see how the company can quickly turn around its fortunes, especially when faced with increasing pressures from competitors – particularly online competitors.
What’s happening to Myer has already happened to many other traditional retailers in other parts of the world.
They’re faced with large cash spend commitments, whether it is through property leases or borrowings, and are therefore finding it increasingly difficult to invest in their businesses to compete with online retailers.
2. The far-reaching effects of self-driving cars
Bloomberg published an excellent article this week – listing all the ways self-driving cars are set to transform industries well beyond the automotive sector.
It’s an interesting, insightful look at the impact of self-driving cars on businesses, cities and our lives. So it got us thinking about what it could all mean from an investor standpoint.
What does this mean if you’re interested in investing in the stock market?
Since some expert estimates have indicated self-driving cars will be “everywhere” in less than a decade, stock market investors should be prepared for their arrival and how it might impact their investments.
Our picks for the top 3 industries that are likely to be most disrupted are:
- Car manufacturers: the leaders in autonomous vehicle technology are likely to be the winners (think Daimler and Tesla) while more traditional car manufacturers are likely to lose out with declining car ownership.
- Insurers: car insurance rates may drop dramatically since human error is removed from the driving equation.
- Real estate companies: fleets of self-driving cars in populated cities may significantly reduce the need for car parks, auto-retailers and may impact how people use physical real estate space.
We believe self-driving cars will become a reality sooner rather than later.
When you consider the fast-growing electric vehicle trend, adding self-driving cars to the mix has the potential to create a significant investment megatrend.
3. Buffett & Munger hate on Bitcoin
Warren Buffett and Charlie Munger are two brilliant minds, billionaires and renowned investors that have been quite local about their stance on Bitcoin and cryptocurrencies more broadly.
Most recently, Munger said:
“I never considered for one second having anything to do with it. I detested it the moment it was raised. It’s just disgusting. Bitcoin is noxious poison.”
What does this mean if you’re invested in Bitcoin?
Buffett and Munger openly acknowledge they don’t understand cryptocurrencies and Bitcoin. It’s precisely why they dislike Bitcoin as an investment.
Buffett and Munger have a simple rule: don’t invest in anything you don’t properly understand. This rule has made them and their shareholders billions of dollars over many decades.
If two of the smartest investors don’t understand Bitcoin, do any investors out there truly grasp what’s happening in cryptocurrency markets?
We conduct a lot of fundamental research before investing in a company’s shares. A key part of this involves understanding how a company makes money, and how its products/services work.
Like Buffett and Munger, if we can’t understand what is going on with a company’s finances or products, we simply don’t invest in it.
From our experience, the best investments are usually those that are relatable and easy to understand.
For more market news and insights, visit our blog.
Kent Kwan is a co-founder of AtlasTrend. He was formerly a Chief Investment Officer of an ASX listed company and prior to that was an international equities fund manager with JPMorgan.