Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Addiction is good for Investors

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Chemical addition is bad for the organism, society but its good for investors, that is how nearly all cigarette companies have been 1000 – 10,000 baggers over the previous 40 years. People are equally addicted to online games, poker, apps, social media almost in equal proportion to the vices of alcohol and other chemicals.

I wrote about a UK company, that I invested in, Games Workshop few months back at the below link, which I bought at 15 GBP and sold at 25 GBP within few months, now out, whilst it continues to make new highs and still not very expensive at 18 times earnings, growing at 15-20%. This company makes addictive board games for adults and sells plastic at the price of semi precious metal, same way as Pandora sells jewelery made of steel and glass at the price of silver and diamonds.

https://lifeandequities.wordpress.com/2017/07/27/stunning-annual-report-games-workshop/

Loyal fan base similar to that of Harley Davidson.  Website: games-workshop.com

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Nir Eyal wrote a nice book on Habit Forming Products: https://www.amazon.com/Hooked-How-Build-Habit-Forming-Products/dp/1591847788

You probably have habits of your own, perhaps a brand of tea/coffee you take (I don’t take either, water is the only liquid I drink with a rare exception of berry / mint tea for social events). The point is everybody is addicted to something, if that something happens to be backed by a listed company, the odds of making money are good.

Good habits are just as easy to form as bad habits, repetition and practice the key. Some of our modes of thinking are also deeply ingrained that we don’t realize why we think the way we think because of habits. These energetic mosaic grooves are almost like the patterns made on iron filings made by the magnet, like the fire-together-wire-together of the neurons. We are like a bottomless pit projected from a deep inner space, the only person that can understand you is you.

As Investors we like to invest in those companies that have “stickiness” for their products which may or may not be a good thing for society. As investors we like to see the company gradually decimate its competition and go on to rule as a monopoly. As egalitarian members of the society we expect everyone to have a respectable living. The easiest solution that I know of removing poverty is to fix a minimum wage, 16.5 $ per hour for example here (https://www.employment.govt.nz/about/news-and-updates/minimum-wage-to-increase/)

I probably think too much, but I used to to have desire as a kid of becoming materially very wealthy / richest person on the earth, and I am probably not even trying very hard. At some stage during growing up, I realised the stupidity of such extreme ambition. The counter balancing force that prevents me to work tirelessly towards accumulation of greenbacks is to work towards the 80,000 year plan rather than solely the next 40-50-60 year plan. We all have our attractions that move us, the point is to know yours intimately so you are not tossed as a cork on the waves of time or kicked as a soccer ball. Above all, know that you are going to be with yourself forever.

Written by amitdipsite

May 26, 2018 at 8:35 am

Posted in Uncategorized

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