Updated: Oct 16, 2020
Investors do better over the long term, that's an undisputed fact. The stock market was intended to allow investors to buy ownership stakes in large companies; if you hold stock long enough for the company to grow, you'll do better. The goal of investing is to choose which companies will grow the most and invest in those. And there are some companies that will grow faster and farther than others, these are usually those that upend industries.
Netflix Inc. (NFLX) was the best performing stock over the last 10 years. Since its IPO, the stock has risen an astonishing 34,340%. Very few stocks have ever accomplished such an astonishing run. And over the course of this growth, did anyone notice that we stopped going to movie theaters?
Netflix created an entirely new industry, online streaming. In a recent interview, Netflix co-founder and CEO Reed Hastings stated he believed Netflix competitors to be video game streaming, social media, YouTube, alongside other streaming services. This is a clear indicator of an industry leader, inability to identify competition by company but rather by service provided. All that Netflix knows is that they don't have our full attention, whether it be Hulu, YouTube, Call of Duty, or Facebook, they see opportunity for growth.
Netflix isn't the only company that caught success by changing the game. Amazon, Facebook, Apple, Google, IBM, McDonald's, WalMart, Home Depot, etc. The list goes on and on. Investors that spot innovation early are rewarded, thus it's crucial to pay attention to the technology that could drive our future.