Even titans Apple and Amazon have been learning some tough lessons when it comes to stock values and retail. While painful for investors, these recent trends are a great reminder of the safety and predictability of other assets, like brick and mortar shopping plazas.
Apple and Amazon enjoyed an amazing run. There’s no question about that. While many large businesses and tech startups could crumble in the next few years, these two giants will probably survive and last a long time. They just might prove to be extremely expensive for investors in their stock.
Apple lost $452B in market capitalization between October and January. That’s more than almost any other company is worth. It’s more than JP Morgan or Facebook is worth. It’s three times more than McDonalds is worth. Apple may have made more real estate investments recently, which could help it survive the dip. Though the company may have lost sight of what the retail store is really about. Most would argue that constant new phone releases and questionable slowdowns of older phones are a misuse of customers that many won’t forget quickly.
In the fourth quarter of last year, Amazon posted the slowest revenue growth since 2015. Amazon’s first quarter 2019 forecast for revenue growth will be the lowest since 2001. Throwing it back almost two decades.
Amazon’s recent moves into physical retail may be helping. Yet, many online shoppers are noticing that the deals they used to rely on just aren’t there. You can still find a brand new iPhone in a local Apple retail store for less than older used models on Amazon. Who is going to fall for that? While there is also clearly a great love of online shopping for efficiency, there are somethings that Amazon and its competitors lack online. Regardless of price. No matter how smart artificial intelligence and technology gets, getting out to the local shopping plaza is still a lot about the experience. You go out to socialize, browse, engage with people, get the kids out of the house, and many other reasons. That’s in addition to those things you just prefer to shop for in person. So, real world local shopping plazas aren’t disappearing anytime soon either.
Investing
When it comes to investing, even stocks in big hot companies like Amazon and Apple can really let you down. They experience extreme volatility. Few have the assets of these companies to protect investors from the worst. While not all local shopping plazas are as trendy as the latest phone or app, they provide concrete assets, cash flow and tax benefits.
Summary
Amazon and Apple have both been great examples of the best of technology and the worst of investing. Not even these giants have been able to provide investors the safety and cash flow of local shopping plazas. Thus by all means, have your iPhone and grab a new ebook to read on it from Amazon. Though, when it comes to investing, if you want a portfolio with a performance that stays fashionable it’s time to contact ReDev Properties, and they’ll show you why local retail brick and mortar real estate is a much better play.