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    This topic was a bit of a puzzle to me.

    I can easily list ten companies the products of which I use – but what do I learn from the fact that they are or are not publicly trading?

    I even re-read the chapter on investing in Aaron Clarey’s Bachelor Pad Economics. What does it mean if a company is on the stock exchange?

    It probably means that that company is so valuable that a lot of people are using it. And thus, in turn, the company brand becomes big enough that people trust them and then hope they can make money off the company’s profits.

    But is that true? Are, for example, the 10+ items I use – on a daily base coming from publicly traded companies? Let’s find out.

    Let’s also see WHY myself and others use them – because that will show us what the real valuable part of those companies is. Convenience? Quality? The only company in the market? Which problem do these companies solve? Let’s also just look at this graph of the companies and corporations that experienced a lot of growth over the last 25 years…

    Stock Exchange Big Players

    Return on investment of Apple, Google, Amazon and Microsoft from 2003 to 2012

    From that graph, it seems that the launch of the iPhone has been extremely profitable for Apple – suggesting that we are now accessing the web really more and more from mobile sources.

    #1 – Amazon (AMZN on NASDAQ).

    Amazon Stock Price

    Amazon stock price over the last 5 years

    I use them almost every day – for their convenience. I can buy almost anything in the world with a click of my mouse – downloading books within seconds, getting groceries delivered; I use their affiliate program to get a commission on items that people buy after I review them etc.

    I think what Amazon really solves is the problem of logistics. They provide the marketing and worldwide infrastructure to get a product to the customer. You can buy physical items in bulk and sell them via the “Fulfilment by Amazon” program. You can upload your book draft, let Amazon put it into Kindle format and sell it for you.

    Whether you are buyer or seller, you really only focus on the product. All the marketing and shipping is done by Amazon. It’s like a paid version of Google – with the difference being that Google gives you information, Amazon sells you stuff.

    Do you realize how lucky we are we don’t have to pay Google for information?

    #2 – Google (GOOG on NASDAQ).

    Google Stock Price

    Google stock price over the last 5 years – similar to Amazon 

    I have already mentioned it under #1 above. As a consumer, I am using Google for information and services. Directions, translations, scholarly articles, of course websites.

    When I want to provide a service, for example with this blog, I rely on the data that Google records. Who is most interested in what I write? How long do people look at my articles? How do people find my blog? form other websites, applications or search engines? 

    Google provides a complete network of data. Similar to Amazon, they provide the infrastructure to data mining and offering services.

    And all they have is an empty field, waiting for your words, only to send you away from their site as efficient as possible.

    #3 – YouTube (GOOG on NASDAQ)

    Here is another direct evidence for the usefulness of Google. I just typed in “When did Google acquire YouTube?” and got a direct answer: November 2006. That means Google directly understood my question. Which is pretty impressive if you think about it. People say robots can never be replace humans, but right now, I can think about robots that have authentic skin, smooth movements and when you ask them a question, they answer and communicate like almost every other human being… how will you know the difference?

    But I digest.

    I use YouTube for looking at and publishing movies. Whenever I have a question of how to handle a common software (or ANY software for that matter), I check YouTube.

    When I needed to caulk the edges of my sink, I checked YouTube.

    In Gorilla Mindset, Mike Cernovich explains how you could expand your reach as a local business – produce a movie showing how you trim lawns or produce delicious coffee – and people will find you. Right now, YouTube is the second largest search engine. Worldwide.

    And once again, the content on YouTube is free! Yes, there is now a subscription service, you can also purchase individual movies. By and large though YouTube is financed through ads.

    You don’t pay a damn thing for all the information of the world. Phantastic.

    #4 – Omron (OMRNY on TYO).

    Omron

    Omron stock price over the last 5 years

     

    Omron is a Japanese company that manufactures sensor technology and electronics.

    I measure my body fat using on of their devices on a daily base. Why do I choose them? For some reason, I don’t know of any other company that produces these apparatus.

    This tells me that Omron dominates the market. Why, I don’t know.

    They manufacture a lot of electronics that are built-in – and therefore I probably don’t even know where.

    Omron is listed on the stock exchanges in Tokyo and Frankfurt, but not the US. Maybe they are already profitable enough on those markets. Or maybe only Germans and Japanese people measure their body fat.

    #5 – Facebook (FB on NASDAQ)

    Stock Exchange Facebook

    Facebook stock price over the last 3 years – I remember people declaring Facebook dead a couple of weeks after IPO in May 2012

    I use it every day to check up on some of my friends.

    I also use it to spread the word about this blog.

    Facebook has an almost unprecedented way of targeting ads in a very specific way.

    So the overwhelming usefulness of Facebook is that it provides the infrastructure to reconnect with friends and reach a global audience.

    Maybe in 5 – 10 years, Facebook will be the interface of the web. The more important it is to watch out for censoring – which comes with being a global network that can be easily operated from a central position.

    #6 – Twitter (TWTR on NASDAQ).

    Stock Exchange Twitter

    Twitter stock price over the last 2 years – this one surprised me a bit

    I use it in a very similar way as Facebook. Daily. 

    I even like it a little more than Facebook, because it let’s you analyze your audience and their engagement relatively easily.

    And while Facebook has a complex algorithm that lets only a fraction of your friends see your posts, every follower can see your tweets – the only limitation here is that you are competing for space. But the engagement you get you can analyze.

    #7 – Apple (AAPL on NASDAQ)

    Stock Exchange Apple

    Apple stock price over the last 5 years

    I use their computers, iPods, iPads, iPhones for just about anything. Sometimes I buy books from their iBook store, although more form Amazon’s Kindle store.

    Apple mostly provides the physical interface with which we access this world and become connected to others.

    I still witnessed the earlier days of Apple, mid-90s – before the iPod came out.

    They were on the verge of vanishing. Microsoft dominated the market for personal computers, Apple was mostly considered a beautiful plaything, but not a serious competitor for the home computer market. Apple’s advantage was their graphical interface, while Microsoft’s famous “MS-DOS” was purely text-based… then Microsoft brought out “Windows 95” and reduced Apple’s edge.

    Apple came back with their iPod. It looked nothing like what we have now.

    Stock Exchange iPod 1st Gen

    One of the early iPods

    Stock Exchange Latest iPod

    Recent model


    #8 – Netflix (NFLX on NASDAQ)

    Stock Exchange Netflix

    Netflix stock price over the last 5 years – 2012 being the year after Netflix tried an ungraceful split of their company into DVD and streaming only.

    I use Netflix to watch TV shows. And movies.

    It’s much more convenient than TV and ad-free. I heard about Netflix from colleagues back in 2006, and all you could do back then was to borrow DVDs. And the great thing was – you could keep them as long as you wanted! You would get new DVDs when you sent in the old ones.

    Back then, that business model was quite unheard of. There were still stores where you could actually borrow DVDs, for example, Blockbuster. Eventually they went out of business, Netflix improved their streaming and ratings algorithm, and the rest is history.

    I found it actually interesting that Netflix would not simply show you movies to watch, but based their suggestions on the movies you have already seen and ranked from one to five stars. That way, consumers are incentivized to come back, because they are more or less guaranteed to watch a movie or TV show they like.

    #9 – Logitech (LOGI on NASDAQ)

    Stock Exchange Logitech

    Logitech stock price over the last 5 years – tablets may have posed a temporary problem for a company that makes keyboards.

    My mouse is from that company.

    I still use sporadic computer hardware from them, however… I am not sure I use them all that often anymore. Apple offers lots of computer hardware as well, and the trend goes more and more to devices that are integrated into our everyday lives – for example, the Apple Watch and mobile devices that let you edit movies with high quality almost as easy as on a desktop computer.

    #10 – Lindt-Sprüngli (LISP on SWX)

    Stock Exchange Lindt

    Lindt stock price over 5 years – did I buy that much chocolate to make the brand so valuable?

    This is a swiss chocolate company, and they are only listed on the Swiss stock exchange. Ha!

    I eat their chocolate – though mostly out of convenience. You don’t get other European chocolate in the US for comparable prices. 

    And sorry, Hershey’s doesn’t cut it for me.

    So why is Lindt only trading in Switzerland? My guess is that they don’t need to innovate much or in a very expensive way. It’s chocolate. People simply eat it and don’t access the internet with it.

    Although it could be interesting if Lindt offered a chocolate mix you could use in a 3D printer to produce any item you like.

    #11 – Epson (6724 on TYO)

    Stock Exchange Epson

    Epson stock price over 5 years

    I scan in almost all of my documents.

    Maybe scanners are becoming more important, because they facilitate the transition into the digital age? Like the companies that sold shovels during the gold rush being the companies that made the most profit.

    So I was a bit surprised that Epson would only publicly trade on the Tokyo stock exchange.

    #12 – Seagate (STX – NASDAQ)

    Stock Exchange Epson

    Seagate stock price over 5 years

    My hard drives are from Seagate. Not much more I can say to that.

    #13 – SanDisk (SNDK – NASDAQ)

    Stock Exchange Sandisk

    SanDisk stock price over 5 years

    Storage media. One of my flash disk is from that company.

    Similar to Seagate, I never had any problems using that company, so I’ll keep buying from them.

    #14 – Microsoft (MSFT – NASDAQ)

    Stock Exchange Microsoft

    Microsoft stock price over 5 years

    Software so prevalent that I almost overlooked it. Microsoft Office!

    It’s funny. Microsoft has the software everyone uses, while Apple has the hardware that everyone uses – not just computers. Who buys a MP3 player from Microsoft?

    And on the other hand, I have yet to see someone who consistently uses the iWorks office suite.

    #15 – Adobe (ADBE – NASDAQ)

    Stock Exchange Adobe

    Adobe stock price over 5 years

    This is the software I use for making pdfs.

    That was a genius move from Adobe to establish a universally used document format.

    On the other hand, their “Flash Player” was discontinued in 2011, when Apple and others decided to focus on HTML5 instead.

    Funny how that sometimes goes.

    Conclusion

    Judging by their stock price, there are 12 companies the products of which I use the value of which has been going up over the last 5 years… and only 2 companies have seen their values drop.

    So the value of a company seems to indeed correlate with the value they provide to their customers.

    What were those values? Most of the services and products I used were simply convenient to use. And they allowed me to either handle data (e.g. Seagate, Adobe, SanDisk), access the web and provide software (Apple, Microsoft) or connect to other people worldwide (Facebook, Google etc.).

    So the easier you make human contact, the more prosperous you will become.

    If you want to check out “Become an Idea Machine”, you can do so here.

    Yesterday’s challenge: Click me!

    What is this challenge about? This link will teach you more.

    And to get back to the main page, you can click here.

    Do you use any other items from companies on the exchange?

    What is most important to YOU for daily use of an item?

    Thanks for reading and let us know in the comments below!

    (Graphs taken from Google Finance – iPod pictures from Wikimedia commons.)