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When to Invest in a Visionary . . .

corneliussmurphy 0

For decades, industry experts and value investors have largely ignored visionaries and have purposely not invested in their companies. Even the likes of Warren Buffett never put a dime into Apple stock until one of Buffett’s lieutenants at Berkshire Hathaway made a compelling case and BK bought its first 10 million Apple shares in May 2016 and it now represents nearly 1/3 of its’ holdings. This is not unusual as visionaries like Steve Jobs are unpredictable, quirky and often misunderstood as they are able to see their vision with 20/20 clarity when the rest of us are virtually blind.

With this in mind and history as our barometer, we researched a handful of visionaries to see what we could find out about WHEN to invest in a visionary. Starting with Steve Jobs and Apple Computers, there were many years of volatility, leadership changes and bizarre product introductions that tested our imaginations for why we would ever need them. Larry Ellison ran Oracle and many potential investors found their software offerings difficult to monetize. Today, we look to history to help us figure out just when to invest in them, hopefully learning from the past so that we too can make millions on the backs of these geniuses.

Next we look at Amazon and Tesla along with their respective CEO/Founders Jeff Bezos and Elon Musk. The same story unfold here where what were seemingly overnight successes actually took more than a dozen years to marinate.

By my calculations, the best time to invest in a visionary is not at inception but somewhere between 10 and 15 years after the company has been in business. Being completely honest, most of us knew at the time that Jobs, Ellison, Bezos and Musk were all visionaries, but many were not willing to invest in them. One expert is Cathie Wood who runs ARK Invest and focuses on disruptive innovation. Her ARK ETFs are clearly an offering for those who want to capitalize on current and future visionaries. Keep an eye on ARK Invest and occasionally revisit the four businesses and respective stock charts mentioned in this article.

This article was originally published in October of 2018 and updated in December 2019.