[투자노트] How to choose a company like Amazon, look at the leader

Input 2021.02.08 08:35

Chartist, in terms of world history, refers to a movement demanding the expansion of the voting rights of British workers in the mid-19th century, but has a different meaning in the stock market. It refers to analysts (researchers) who analyze the flow of stock prices in detail, centering on the stock market trend graph (chart). It was named Chartist, meaning that it analyzes the flow of stock prices shown in the chart. The analysis method they use is called Technical Analysis.

On the other side of technical analysis is Fundamental Analysis. It is a method of analyzing an investment company by evaluating the intrinsic value of the company. The intrinsic value is not about the movement of the chart, but rather by looking at the financial statements of the company to be invested in or evaluating the marketability of the products that the company creates. In the investment industry, investments based on this analysis are usually referred to as value investments. Warren Buffett, chairman of Berkshire Hathaway, is a leading value investor.

Experts, such as investors and analysts at many securities companies, analyze companies in this way. Analysis is literally dividing, splitting, and examining. Wrap your hair and check carefully to see if the place to put your investment is okay.

However, many professional investors in the financial investment industry and those with long investment experience must include important factors that do not fall within the framework of this analysis in selecting investment companies. It is who is leading the company. It means that we can thin out a promising company by seeing who the leader is and what kind of vision the leader is.

Companies that currently have little intrinsic value financially and have seen their stocks bottom for several years even by looking at the charts, and even such companies may have leaders with innovation and vision to change the landscape of the future industry.

The world’s largest global companies gathered in the US Standard & Poor’s (S&P) 500’s market capitalization No. 1 (Apple) and No. 3 (Amazon) are all companies started in garages without even offices. Apple, founded by Steve Jobs in 1976, has become a company worth over $2.412 trillion (based on the 4th closing price). Twenty years later, Amazon, founded by Jeff Bezos in 1996, changed the paradigm of distribution into the world’s largest e-commerce company (with a market capitalization of $1,687.7 billion). According to Amazon, the company’s operating profit last year amounted to $6,873 billion (about 7.73 trillion won). When Bezos offered to sell his books to readers around the world on the Internet, the question he heard the most was’What is the Internet?’

Jeong-woong Min, a professor at Inha University’s Department of Asia-Pacific Logistics, said, “Amazon has been able to become a company that has never broken its growth over the past 30 years. It is the result of Bezos’ commitment to innovation, ideas, and execution power.” “The role of the leader who achieved this made today’s Amazon.”

Most investors only follow figures that appear numerical, such as stock charts and financial statements. In particular, when the market is overheating and burning as it is now, it is often buried by the chart curves and figures in the financial statements showing the flow of money. But sometimes you need to wonder who is leading the company you’re investing in, what they think and what they’re trying to accomplish.

You don’t know. You might encounter a company led by an innovator who says, “Keep inventing. Don’t despair if your initial idea seems crazy. Use your curiosity as a compass” (from Bezos’ retirement letter to employees).