Ghost Global: lessons from 100 Magic Markets research reports (part 1)

The Magic Markets team is two years into the Magic Markets Premium journey, having recently released the 100^th podcast and research report on that platform. The Finance Ghost and Mohammed Nalla also have nearly 150 free weekly Magic Markets shows under their belts.

In short: there’s been a lot going on.

To celebrate the 100-show milestone, I asked the hosts to each pick a handful of insights from the various research activities. Demonstrating the breadth of research coverage and variety of industries, part 1 of this series includes insights from Swatch, TripAdvisor and John Deere.

Swatch: life comes at you fast

In business as in life, disruption can come at you at any time and from any direction. The quartz crisis, which affected Switzerland’s watch industry in the 1970s and 1980s, is a prime example. Swiss watchmakers (who prided themselves on aeons of mechanical expertise and craftsmanship) were blindsided by the rise of quartz technology, which made watches more accurate and affordable.

Suddenly, you didn’t need something expensive just to tell the time.

For context, the Swiss watch industry captured a staggering 50% share of the global watch market before the 1970s. By the late 1970s, quartz timepieces had overtaken mechanical watches in the market, and the Swiss watch industry’s 1,600 watchmakers at the start of that decade had dwindled to just 600.

The lesson here is that even well-established industries and companies can face unexpected challenges. Investors should always be vigilant and open to the possibility of disruption. It doesn’t happen often, but when it does, it can reshape entire markets.

Lab-grown vs. mined diamonds, we are looking at you.

Tripadvisor: the power of Google as a gatekeeper

Google is the go-to interface between internet users and countless businesses worldwide. Although Microsoft is trying hard to make headway with Bing as an alternative, nobody “Bings it” just yet. They Google it.

They don’t “Tripadvisor it” either, unfortunately. Despite this company being a household name, the lesson is clear: if you need to keep paying Google to reach consumers, your business has a structural flaw.

Tripadvisor’s business has been significantly impacted by changes in Google’s search algorithms and advertising practices, underscoring the importance of diversifying customer acquisition channels and not relying too heavily on a single platform. This is especially true when that platform is also one of your biggest competitors!

To make it worse for Tripadvisor, the unit economics are also weak. The share price has lost more than two-thirds of its value over the past five years and there’s no indication of things improving.

John Deere: tractors, but with internet?

The digitisation of industrial companies is a trend that has been reshaping traditional manufacturing and services. Companies like John Deere have been transitioning towards offering “as-a-service” models, where they provide not just equipment but ongoing services and data-driven insights.

This is the classic “internet of things” trend – and in this case, the tractors are the things.

Investors should recognise that even in traditional industries – and is there an industrial industry more traditional than agriculture? – digital transformation is driving innovation and new revenue streams. Companies that adapt to these changes can remain competitive and capture new growth opportunities. Those that don’t will sadly fall behind the curve.

And if you need a good example of why John Deere likes the combination of hardware and service revenue, look no further than the house that Apple built!

Investing in global stocks requires careful research, regular monitoring and an ability to spot changing market dynamics. That’s a lot to try do on your own, which is why Magic Markets Premium brings you a weekly research report and podcast on global stocks. At just R99/month, it’s a bargain. To celebrate the 100^th report, you can use the coupon MAGIC100EPS on checkout to pay R899/annum instead of the usual R999/annum. Be quick! This deal is only valid until the end of October.

About the author:

Dominique Olivier is a fine arts graduate who recently learnt what HEPS means. Although she’s really enjoying learning about the markets, she still doesn’t regret studying art instead.

She brings her love of storytelling and trivia to Ghost Mail, with The Finance Ghost adding a sprinkling of investment knowledge to her work.

Dominique is a freelance writer at Wordy Girl Writes and can be reached on LinkedIn here.