The Speed Of Light… And What It Means

By: ispeculatornew
Date posted: 03.15.2012 (5:00 am) | Write a Comment  (0 Comments)

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Yesterday, if you were anywhere near planet Earth, you heard about the Goldman Sachs exec who very publicly decided to leave the company while at the same time voicing his opinion that Goldman was more than happy to screw its clients and sell it poor products in order to enhance its numbers. On the face of it, those are not shocking revelations. What is however is to see this guy write a piece in the NY Times about it. Even more surprising to me is how quickly things happened after that. Within a few hours, it seemed to be all over the news even forcing Goldman Sachs and CEO Lloyd Blankfein to react to the news:

“We disagree with the views expressed, which we don’t think reflect the way we run our business. In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.”

All of this happened within a morning.

A few days ago, when Apple finally launched its much anticipated iPad, in a matter of seconds, everyone in the Western world seemed to know exactly what had been launched, how it was different, etc.

Don’t get me wrong, I know that things have changed, that information is going at the speed of light. But it still surprises me every time. The social networks have only made this even more evident. You are probably on Facebook, Twitter, LinkedIn or some other network. If you are not, I would bet a lot that many of your closer connections are. That means good and bad news can reach a record number of people within a few minutes. Reputations, customer bases, all of that can come and go so quickly.

When Bank of America (BAC) announced its new $5 fee, the backlash was so severe that it finally decided to backtrack, looking like a bit of a fool in the process but avoiding what was quickly turning into a disaster. Then there is Netflix (NFLX), which I’ve also discussed which made a terrible PR move which it continues to suffer consequences from.

What Does All Of This Mean?

I personally think that more than ever, the fate of a product, a company, or even an industry can change within a day. Every company is one bad move, one bad decision or one bad press release from suffering big losses. This reinforces my view that:

I want to hold innovative companies: Apple is a prime example but so would Google, LinkedIn, Amazon, etc. Companies that are unable to come up with the best products will increasingly be left behind

I want to hold companies that treat their customers as kings: With social media, word of mouth’s power has exploded making companies such as Apple that surprise their users every time they release a product rewarded for doing so.

Passive Investing Remains King for most investors: If you’re not able to spend time every week or every month looking at your investments, you should be going for passive investments. There is just so much happening every single day now that I believe less in less in “permanent portfolios” that can be bought and left alone.

What are your thoughts? Doesn’t it feel like the speed of everything keeps getting faster and faster?

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