Peter Lynch
“Although it’s easy to forget sometimes, a share is not a lottery ticket. It’s part ownership of a business.“
Investing is a business partnership in a way, and that is something that needs to be remembered. Sometimes two companies can be in the same industry, have identical business models, and have similar numbers, but only one is the better business. This issue is the reason some investors prefer Ford Motor Company (NYSE:F) over General Motors Company (NYSE:GM).
Perhaps it’s just a matter of principle, but I prefer to be part of a business that doesn’t take government help.
F Net Income TTM data by YCharts
While the numbers still aren’t completely peachy for Ford, it is pretty impressive what they have been able to do since the financial crisis in 2008. They have swung from a huge loss to more than a $5 billion profit.
As you look to long term growth prospects, you have to be happy about the Ford EcoBoost engine. While not entirely new, this engine has been increasing fuel efficiency without sacrificing engine power. Fuel efficiency is needed to comply with government regulations, while engine power is needed to keep costumers happy. Recently Ford Motor Company (NYSE:F) announced that soon they’ll be adding this engine to even more vehicles in their lineup, and will be making them right in the USA.
I think it’s important to realize that you need both the fuel efficiency and the engine power if you are going to be relevant in the auto market. You can’t ignore fuel efficiency because the government requires it. But you can’t throw customers under the bus with vehicles that under perform. Ford seems to be finding a good balance between the two.
George Soros
“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.“
Putting that philosophy into practice, Soros continues to buy Wal-Mart Stores, Inc. (NYSE:WMT). Is that boring enough for you? I mean, who wants to invest in Wal-Mart anymore, when there are so many exciting investments like 3D printing and experimental pharmaceutics?
WMT Revenue TTM data by YCharts
It may seem boring at this point, but the numbers are hard to argue with. Every important metric just continues to rise, except for their price to earnings ratio. But where is the continued growth for Wal-Mart? Right now, they are focusing their efforts online. Only 2% of sales are currently made on the internet, but Wal-Mart is hoping to leverage their huge store count to improve online sales through the use of lockers, a place in the Wal-Mart store that you can pick up goods ordered online.
Conclusion
The only thing you can learn from a monkey is “monkey see monkey do.” Some people beat the market consistently for good reason. Learning the valuable lessons they have to teach can make you a better investor, and will allow you to imitate those things that have made them great.
The article Return of the Blindfolded Dart Throwing Monkeys originally appeared on Fool.com and is written by Jon Quast.
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