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Imagine losing 20% of your nest egg on the market.
For many people, it's about tearing apart. Thus, investors often pay huge bonuses to buy stocks they consider "safe".
You probably know that & nbsp;fast-growing stocks in exciting industries& nbsp; can be expensive. But slow-growing boring stocks are often expensive too, if they are perceived as safe.
And even if you do not realize it, there is a good chance that you are paying a heavy price to keep your money safe.
The "safest" stock on Earth
Take Procter & amp; Gamble (PG).
It's a 200-year-old company that became 15th-the largest publicly traded company on the planet by selling basic necessities.
Brands include Gillette razors, Tide laundry detergent, Crest toothpaste, Dawn dish soap, and Bounty paper towels.
No matter what happens in the markets, we always brush our teeth, we wash clothes and dishes. This is why the sale of basic necessities is an extremely solid activity.
Since 1982 & shy; – & shy; 2012, Procter & amp; Gamble has increased sales by 28 over 30 years. This experience is why P & G has long been considered one of the safest stocks in the world.
You must & nbsp; pay dearly & nbsp; own safe stocks
P & G trades about 25 times its profits.
It is very expensive for a company whose profits have fallen by 20% over the last decade. For reference, the average S & P 500 company is trading 21X profits.
If you own P & G shares, you are not paying for growth. You do not pay for big profits. You pay a high price for one thing: & nbsp; Security.
For decades, P & G's stock has resisted.
For example, when the S & P 500 hit 30% between the summer of 2007 and the end of 2009, P & G held up, losing only 1.5%.
We live in the era of disruption
Take Amazon, the most iconic site & nbsp;disruptive stock.
The online giant has put dozens of companies out of business in recent years.
By selling cheap products online, he has bankrupted major retailers like Toys "R" Us, Sears, Circuit City and RadioShack.
In 2000, online sales reached $ 27 billion. This year, this figure will exceed $ 550 billion – a 20X jump & nbsp; in less than two decades.
By claiming much of this growth, Amazon has led its stock to more than 100,000% since its IPO in 1997:
While everyone is focusing on Amazon's takeover of retail, the group is preparing an even more disruptive onslaught on "safe" companies.
Amazon threatens safe stocks like P & G
In the past three years, Amazon has launched more than 100 brands of what it calls "private brands." These are Amazon's own products sold under different names.
For example: His brand "Presto!" Sells toilet paper and paper towels. And "Basic Care" sells medicines for coughs and flu.
Amazon now sells its own diapers, dish soap, laundry detergent, baby wipes and around 5,000 everyday items.
There is not much difference between the most "essential" items.
Crest toothpaste is about the same as Aim, which is about the same as Colgate. And do you really care if the batteries in your remote are Duracell, Energizer or a "private" Amazon brand?
The results of the Jumpshot research firm show that Amazon already controls 97% of the online battery market. And 94% of online purchases of kitchen and table products were made on Amazon last year.
The key here is & nbsp; Americans are buying more and more essentials online.
Basic foods, such as breakfast cereals, are the fastest growing category on Amazon. Personal care products such as soap and toothpaste come in second place.
Amazon raised about $ 7.5 billion by selling its private label products last year. Research by investment firm SunTrust suggests that this amount will reach $ 25 billion by 2022.
Amazon has a "Trojan Horse" in 100 million American homes
More than 100 million Americans pay $ 119 / year for a Premium membership. Prime is the Amazon subscription service that guarantees free delivery.
Premium members tend to buy a lot of things on Amazon. According to research firm eMarketer, Prime members spend more than 5X & nbsp; more than regular customers on Amazon. And one in two core members buys something from Amazon at least once a week!
As part of Prime, Amazon offers a program called "Subscribe & Save." In summary, it allows you to create an automatic subscription to thousands of products.
You simply ask Amazon to send you laundry detergent every month. A container will appear on your porch at the same time every month.
Amazon has spent billions to develop these so-called "friction-free" services. The idea is to allow users to buy basic products via Amazon in a simple, fast, convenient way, and you will rarely have to go to the stores.
Amazon started to offer its own products to key members
Amazon's subscription service has been around for a few years. What is different now is that it started to strongly promote its own core products … rather than those made by other companies such as P & G;
Log in to Amazon and see for yourself. It now offers its own private label products, which rank first in almost every category.
And if you order by voice, through Amazon's Alexa device, Amazon automatically sends you Amazon branded products.
Amazon now encroaches on the territory of former safe stocks such as Procter & amp; Bet.
My research suggests that these companies will succumb gradually as more and more "essential" purchases go online.
I do not just choose P & G;
Like the 15thThe largest publicly traded company in the world, P & G has the most to lose. But his "safe" peers face the same big problem.
Unilever (UN), which owns household product brands like Deodorant Ax and Dove skin care, saw its sales drop below 2001 levels.
Nestle (NSRGY) sells popular products such as Poland Springs water and Nescafe coffee. Its activity is flat since 2005.
These three stocks are trading for profits above 20X.
Their businesses do not grow up …
Their stocks are expensive …
And the most disruptive force on the planet – Amazon – invades their territory.
Does this seem like a safe place to put your money?
& nbsp;
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Imagine losing 20% of your nest egg on the market.
For many people, it's about tearing apart. Thus, investors often pay huge bonuses to buy stocks they consider "safe".
You probably know that fast-growing stocks in exciting industries can be expensive. But slow-growing boring stocks are often expensive too, if they are perceived as safe.
And even if you may not realize it, chances are you'll be paying a price to keep your money safe.
The "safest" stock on Earth
Take Procter & Gamble (PG).
It's a 200-year-old company that became 15th-the largest publicly traded company on the planet by selling basic necessities.
Its brands include Gillette razors, Tide laundry detergent, Crest toothpaste, Dawn dish soap and Bounty paper towels.
No matter what happens in the markets, we always brush our teeth, we wash clothes and dishes. This is why the sale of basic necessities is an extremely solid activity.
From 1982 to 2012, Procter & Gamble sales increased by 28 over 30 years. This experience is why P & G has long been considered one of the safest stocks in the world.
You have to pay a lot to own safe stocks
P & G trades about 25 times its profits.
It is very expensive for a company whose profits have fallen by 20% over the last decade. For reference, the average of the S & P 500 companies trades for 21X earnings.
If you own P & G shares, you are not paying for growth. You do not pay for big profits. You pay a high price for one thing: security.
For decades, P & G's stock has resisted.
For example, when the S & P 500 hit 30% between the summer of 2007 and the end of 2009, P & G held up well, losing only 1.5%.
We live in the era of disruption
Take Amazon, the most emblematic disruptive stock.
The online giant has put dozens of companies out of business in recent years.
By selling cheap products online, he has bankrupted major retailers like Toys "R" Us, Sears, Circuit City and RadioShack.
In 2000, online sales reached $ 27 billion. This year, this figure will exceed $ 550 billion, a 20% jump in less than two decades.
By claiming much of this growth, Amazon has led its stock to more than 100,000% since its IPO in 1997:
While everyone is focusing on Amazon's takeover of retail, the group is preparing an even more disruptive onslaught on "safe" companies.
Amazon threatens safe stocks like P & G
In the past three years, Amazon has launched more than 100 brands of what it calls "private brands." These are Amazon's own products sold under different names.
For example: His brand "Presto!" Sells toilet paper and paper towels. And "Basic Care" sells medicines for coughs and flu.
Amazon now sells its own diapers, dish soap, laundry detergent, baby wipes and around 5,000 everyday items.
There is not much difference between the most "essential" items.
Crest toothpaste is about the same as Aim, which is about the same as Colgate. And do you really care if the batteries in your remote are Duracell, Energizer or a "private" Amazon brand?
The results of the Jumpshot research firm show that Amazon already controls 97% of the online battery market. And 94% of online purchases of kitchen and table products were made on Amazon last year.
The key here is that Americans are buying more and more online essentials.
Basic foods, such as breakfast cereals, are the fastest growing category on Amazon. Personal care products such as soap and toothpaste come in second place.
Amazon raised about $ 7.5 billion by selling its private label products last year. Research by investment firm SunTrust suggests that this amount will reach $ 25 billion by 2022.
Amazon has a "Trojan Horse" in 100 million American homes
More than 100 million Americans pay $ 119 / year for a Premium membership. Prime is the Amazon subscription service that guarantees free delivery.
Premium members tend to buy a lot of things on Amazon. According to the eMarketer research firm, Prime members spend 5 times more than their usual customers on Amazon. And one in two core members buys something from Amazon at least once a week!
As part of Prime, Amazon offers a program called "Subscribe & Save". In short, it allows you to create an automatic subscription to thousands of products.
You simply ask Amazon to send you laundry detergent every month. A container will appear on your porch at the same time every month.
Amazon has spent billions to develop these so-called "friction-free" services. The idea is to allow users to buy basic products via Amazon in a simple, fast, convenient way, and you will rarely have to go to the stores.
Amazon started to offer its own products to key members
Amazon's subscription service has been around for a few years. What is different now is that it started to strongly promote its own core products … rather than those made by other companies like P & G.
Log in to Amazon and see for yourself. It now offers its own private label products, which rank first in almost every category.
And if you order by voice, through Amazon's Alexa device, Amazon automatically sends you Amazon branded products.
Amazon is now encroaching on safe-haven territory such as Procter & Gamble.
My research suggests that these companies will succumb gradually as more and more "essential" purchases go online.
I do not just pick on P & G
Like the 15thlargest publicly traded company on the planet, P & G has the most to lose. But his "safe" peers face the same big problem.
Unilever (UN), which owns household product brands like Deodorant Ax and Dove skin care, saw its sales drop below 2001 levels.
Nestle (NSRGY) sells popular products such as Poland Springs water and Nescafe coffee. Its activity is flat since 2005.
These three stocks are trading for profits above 20X.
Their businesses do not grow up …
Their stocks are expensive …
And the most disruptive force on the planet – Amazon – invades their territory.
Does this seem like a safe place to put your money?
