So far in two blog posts I’ve shared why I’m down with Mark Zuckerberg’s mom and scared of Nick Woodman jumping me in a dark alley.
While Mr. Market may not be as tough to predict and temperamental as a stage mother going through menopause, it really shouldn’t be much of a surprise that as soon as I published my article on GoPro, a few hours later the market opens the New Year with a solid correction. Like a jilted ex-lover, GoPro is one of the few companies to go up. While I may be known to overvalue my importance in this world, even I was shocked to see the market react so personally to my predictions.
Thankfully, Mr. Market is back to his senses, GoPro slowed down, FB is moving back up…and maybe we have “FANG” round 2 (facebook, amazon, netflix, google), even though I’m more of an “F-U” type of guy (facebook and unconcerned).
While we wait to see what new drama the world brings coming into 2016, I figured I’d share two companies I’ve got my eyes on…
Inditex – You may not have heard of Inditex, but if you are young (or old and want to dress like your daughter) you’ve probably heard of ZARA, Inditex’s crown jewel. ZARA’s business model is: copy something in demand, put it on shelves in about 2 weeks, and sell it for way less than anyone else. It’s that kind of “Oh…..dayum!” type business model.
Inditex is the scourge of luxury fashion. Why buy an on-trend jacket from Nordstrom or Bloomingdales that is $700 when you can get one that looks the same for $89 at ZARA? It’s no surprise that the CEO of the company wrestles with Bill Gates for the title of richest man in the world.
While it would be wise for a company like LVM+Henessey or Kering to create some type of middle of the road between high and fast fashion that can capture their fashionista’s lost dollars, they seem perfectly content to stay more on 5th Avenue then bridge and tunnel it to New Jersey. Competitors like H&M, Old Navy, and Uniqlo aren’t leading the pack (and Old Navy comes with it’s two lame siblings, GAP and Banana Republic). I look at ZARA the way I look at Walmart back in the day. Sure the stock has soared and is still high when factoring in all the splits, but I feel like this is one of the those long-term plays.
Anyways, what I’m on the lookout for some stability in the market, EU, and Spain specifically. Spain is where the stock trades and they just underwent a pretty crazy election (like “the elected president was sucker punched in the face during campaigning” crazy). I’d like to see a bit more encouraging things before I put some money into Inditex. I’d also like to see if we could get the guy that sucker punched their president near Donald Trump…
Atlassian – Atlassian is a tech company that makes a bunch of programs that businesses use to increase productivity. While I may not work at a Fortune 500 company, apparently 1 in 3 of them are using Atlassian’s products. What I like about Atlassian is that it’s the “anti-tech” tech company.
While things may not be at Pets.com level, it still seems like the best way to do things in tech is to take hundreds of millions of dollars from investors before thinking about how to make hundreds of millions of dollars from customers. Sometimes I think Jeff Bezos wakes up with nightmares of Amazon.com actually trying to make a significant net profit.
Anyways… What separates Atlassian from riff-raff, is that it’s already making money. It didn’t use an IPO to move into the black. This company has had earnings growth every year since it’s inception. It’s definitely something to keep your eyes on, I like that it’s in tech but actually tries to run a business the way it’s supposed to (by earning money).
What I’m waiting on Atlassian to do before I throw some money in is get a bit more institutional ownership and to see it start moving past it’s previous high. I feel like tech stocks play on a lot of hype and I’m waiting to see the ticker (TEAM) get more attention and start to break out before I put in.
Anyways, till next time.
(wearing glasses is instant credibility)
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DISCLAIMER: As always, investing has inherent risks…blah blah blah.
These writings are my thoughts and should not be taken as gospel truths. Read my stuff, do your own research, then be responsible for your own actions. AKA, this is to warn you not to sue me because you need to be responsible enough to make your own decisions before you open your wallet.