A reader from Norway made an interesting comment on Twitter in response to the article Two Crashing Stocks I’m Starting to Like. In that piece I discuss the buying opportunities Amazon and Apple are in the process of becoming, given their unison 30% drop. Dylan disagreed:

 

emergingvsdevelopedmarkets2

 

I responded that the emerging market companies he argue are better buys, are simply poor imitations of the developed market originals.

 

emergingvsdevelopedmarkets1

 

The objections Dylan raised are important as retail investors now have the ability to hunt globally for the best returns. For the sake of argument then, I will look away from the fact that Xiaomi is still a privately held company and can’t be bought. Even if it were listed on either the Shanghai or Shenzen stock exchange, foreigners are not allowed to buy mainland Chinese stocks.

Korea’s Samsung is a publicly listed company trading on the KOSPI. Again, retail investors can’t access that country. The only alternative is buying a South Korean ETF (EWY) that trades on the NYSE and is 20% made up of Samsung shares.

 

 

WHY APPLE IS A BETTER COMPANY THAN THE NEW APPLES XIAOMI AND SAMSUNG

I understand Dylan’s argument that cheaper emerging market upstarts are the future and old western firms belongs to the past. But I disagree in the case of companies selling physical products as profit margins are more important than TO READ ON SUBSCRIBE AND BECOME A PATREON.

  • PeteyBrian

    Agreed – Apple will be a still be a major profit center for years to come because of it’s iPhone. But I believe there’s a peak here – especially if iPhone 7 doesn’t impress.

    I own one and have owned most iPhone models since 2008. The reason why I pay a premium for their phones isn’t status – it’s that 1) they got me to be an early adopter – harder to change now when all your stuff is there and you know how their operating service works inside and out, and 2) they make the software AND design the hardware – so shit actually works seamlessly (updates a breeze), unlike other platforms which are a bit more problematic to use (I’m a simple man)…

    All the cheap brands of the world, don’t make both (software AND hardware design). There’s a learning curve to changing operating systems and how they work. A huge time commitment to transferring stuff to a new phone. Programs don’t work on other platforms. $ is needed to buy apps/programs (or not) on new platform. Sure Google dabbles in designing phones, but they don’t spend much time on it… Lol.

    I’ll spend premium money on phones because I use them day and night…

    However, going forward, if iPhone 7 sparkles – of course I stay the course – but if it’s doesn’t, I will consider other phones.

    Other platforms have gotten so much better.

    In sum – Apple is now an iPhone company with Apple profits based so darn heavily on iPhone sales/margins. Sure Apple is a great buy now, IF iPhone 7 is a hit.

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