I can't believe what I'm reading. This is investing 101. Dominant marketshare is what the biggest companies in the world have. As an investor you have both options of going long, in what will likely become a safe rising stock or make profit from selling the stock in the expansion period.
2) is completely wrong. Stock value is speculative and can rise even without profits a la Amazon, Tesla, Netflix etc. MS's stock price has doubled in a year. Has there profits doubled to cause this? Of course not. What a ridiculous assumption.
You're also wrong on Netflix. Netflix became a pioneer in an entirely transformed industry: digital content streaming, and it did it all while not making a single bit of profit. Same with Amazon, delving into e-Commerce or Tesla with the EV manufacturing industry. See a trend here.
Aggressive expansion and domination, requires debt and induces thin margins, margins that can easily be increased once they've become the dominant players after market stabilisation.
To put it more simply:
Sony is on track to break records in the videogame industry and achieve $25 billion revenue. Nintendo is at $11 billion. Sony can achieve similar profits at a measly 20% margin while Nintendo needs a near 50% to match this.
Its only going to get more lopsided in the future, as Playstation has massive leverage over third parties, whose revenue stream rely on PS.
Hahah, these posts are hilarious. "This is investing 101." LOL. Here is actual investing 101: buy low, sell high. That is investing 101. Collect dividends which are based on profits. That is also investing 101. That's how investors make money. What sort of thing do amatuer investors need to avoid? Don't invest in a company just because it's big. That's dumb. If you make money just investing in big companies then it has more to do with luck than skill. That is the third lesson of investing 101.
There. You just got schooled. Now all you have to do is follow that advice and you won't lose your shirt. It couldn't hurt you to look at some of Warren Buffet's advice either. Basically he says to avoid short term speculation and invest in companies which will be profitable in the long term. That's what makes stock value increase in the long term (i.e. over the course of several years.)
You also seem to have no clue how Netflix got started. It didn't start out as a streaming company. It started out renting movies through the mail. Amazon also started out just selling books only online. They started out as small businesses with high profit margins. That's how they became so successful today. High profit margins matter to investors. Size? Who cares. It makes the company look impressive, but it doesn't help investors. And in the long run the profitable businesses end up growing anyway.Last edited by The_Liquid_Laser - on 29 September 2020