Different Makes a Difference

The Odlum Brown Research Blog

We Are More Alike Than We Are Unalike

By Stephen Boland CFA Equity Analyst
Wednesday, January 18, 2017

One of my favourite TV commercials is an Apple iPhone advertisement that aired during the 2016 Summer Olympics. It featured iPhone photos of individuals from all around the world. The late poet and civil rights activist Maya Angelou provides a voice-over, delivering part of her poem “The Human Family”. In closing she twice recites the verse, “We are more alike, my friends, than we are unalike.” This is a powerful social statement. Interestingly, it can also be thought of in the context of investing.

Peter Lynch is arguably the best mutual fund manager of the 1980s. Part of his success came from investing in concepts that were growing in popularity. He reasoned that, in general, people on the West Coast would like the same concepts as people on the East Coast (and vice versa). While this description of Peter’s process is a little simplistic, investors can make very good returns on the premise that we are more alike than we are unalike.

We often look to benefit from investments in this way. CarMax, for example, has designed a more favourable used car shopping experience. The company provides haggle-free pricing and a better customer experience than the typical used car transaction – who wouldn’t like that? CarMax is proving popular in every market it enters. We believe they have an opportunity to at least double their store count in the coming years.

Photo taken on a recent trip to Japan.
Photo recently taken in Japan.

We are also attracted to companies that have global appeal. International expansion can prove particularly challenging as companies must adapt to local tastes and cultures, but certain products and concepts can successfully transcend borders. Products like Dove soap (Unilever) and Heinz ketchup (Kraft Heinz) have shown global appeal. So, too, have restaurant chains such as Starbucks and Burger King (Restaurant Brands International). These companies, and others, have shown an ability to grow profitably around the world, and the opportunities for further growth remain large.

Not all products and concepts have universal appeal. Not all management teams will capitalize on potential growth. But when the right opportunity comes along, the rewards can be substantial. After all, we are more alike than we are unalike.

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