Think Different

Warren Buffett described Steve Jobs, co-founder, chairman, and CEO of Apple, Inc., as “one of the most remarkable business managers and innovators in American business history.”

Resigning in 1985 from the company he had started in his parents’ garage with Stephen Wozniak, Jobs returned to Apple in late 1996 as an adviser and, in 1997, was made interim CEO—a position he assumed permanently in 2000. In September 1996, Apple’s stock price was under $6 a share. On October 5, 2011, the day Jobs died, the stock price closed at $377 per share—an increase of more than 60-fold.



Several years ago, the company ran an ad campaign that has since become legendary, known as “Think Different.” The spot featured the lives and thoughts of people who had changed the world—personalities such as Mahatma Gandhi, Albert Einstein, John Lennon, Bob Dylan, Muhammad Ali, and Richard Branson.

The ad referred to these people as “the round pegs in the square holes. The ones who see things differently”—a group Steve Jobs certainly fit into. By seeing the world differently, he changed five industries forever: personal computing, computer animation, music, phones, and mobile computing.

Steve Jobs became one of the most successful businessmen in American history by sticking to a vision despite what the rest of the world was saying and doing.

“Think Different” is a trait successful investors share.

The hard part

Identifying companies that have strong balance sheets and solid business models is not that hard. It doesn’t take much brainpower to know that there’s a substantial difference between Jones Soda Co. (NASDAQ:JSDA) and Coca-Cola (NYSE:KO). While they both sell carbonated soft drinks, water, and a range of other beverages, in 2015 Jones Soda had revenues of $14 million while Coca-Cola had revenues of $44 billion and is one of the best-known brands in the world.

Figuring out if the stocks are trading at attractive prices is also not as hard as it might seem. If you use a simple measure of valuation, such as a P/E less than 12, you will likely avoid paying sky-high valuations, which turn great businesses into lousy investments.

The really hard part is having the strength of your convictions and buying when everyone else is selling. In other words, thinking differently is easier said than done.

While short-term and emotional investors—those who let the stock market guide their investment decisions—have a difficult time during periods of high volatility, the longer-term investor understands that these periods create opportunity.

By “thinking different” and not allowing the most recent stock trade, media headline, or gloom-and-doom blog post turn you into a scared seller, you can take advantage of the bargains the stock market offers.

The formula successful investors apply in down markets is rather simple: Uncertainty creates volatility, volatility creates market inefficiencies, and market inefficiencies create opportunities to make above-average returns.

Disclosure: None.

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