Factories Show Increased Bullish Hiring - 2
By Saghir Aslam
Rawalpindi, Pakistan

 

(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)

Similarly, news that shoppers spent 11.3percent less this year over the Thanksgiving holiday weekend sent a chill through investors, perhaps contributing to a rapid fall in the value of Apple shares. Cyber Monday, a day in which many retailers try to spark online shopping with sales, also looked slightly disappointing, according to industry projections.

There is an old adage of investing: Never bet against human ingenuity. Don’t take risks based on the idea that a given commodity will remain just as scarce, or a given business model just as defensible against competition.

Now to be clear, all of these surfeits are very good things if you want to heat your house or order olive oil over the Internet. But they are just not very helpful to those who already have made investments in the way crude and extra virgin have traditionally been obtained or distributed.

Retail has seen its own revolution, one which is far from finished, as bricks and mortar give way to the bits and bytes of the Internet. While this has spawned all sorts of strategies among retailers, the common denominator is that it has made times continually tough, with tight margins and omnipresent competitors and fair-improved price transparency. Investors have reacted to this new landscape by assuming it is just a replacement for the old, run on the same lines. Poor Black Friday sales are a reminder that this may be a mistake.

Any kid with a new idea has a much better chance of putting it in place. Some might compete directly with Facebook or Amazon, but some indirectly, by attracting attention.

We as investors have a historic psychological bias towards expecting advantages to be persistent. We look at Facebook now just a bit like we foolishly looked at Barnes and Noble or Sears 30 years ago.

We look at a business and we get excited by its growth and revenues without truly comprehending how different the world has become. Abundance is justly celebrated, but can be dangerous to your wealth.

(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)

 

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Editor: Akhtar M. Faruqui
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