How The Internet Works
The landscape for the investor today is growing increasingly dependent on technology. High-frequency trading has become a reality as these traders are fighting the speed of light to gain a fraction of an advantage. News travels fast and ripples through the markets as the underlying price typically reflects the sentiment of recent headlines. Online brokerages are racing each other to the demise of their trading fee business models. Yet, there remains one viable option for the average investor today–value.
The internet all started back in the 1970s when the government was trying to create a way for computers to talk to each other. That’s right, there was once a time when computers were not connected to the internet! Back then, computers were also the size of a room and rarely had a screen. With the internet connecting all of the computers, the Web (also known as the World Wide Web) was invented as a way to easily view all of the information and connect it.
Warren Buffett is famous for adorning his desk, not with a computer, but with annual reports he voraciously studies and memorizes. While value investors today are seeking ways to utilize technology when discovering undervalued businesses, Buffett proves there is a path not yet mired by the high-tech landscape. The internet has been a catalyst for the widespread sharing of information, including interviews, lectures and books by Buffett himself. The web is also a great tool for value investors to readily download annual reports and 10-K filings. Research and Analytics tools are available to the average investor today that were unheard of amongst the most successful analysts on wall street a few short decades ago.
With only 40 percent of the world’s population currently connected to the internet, this number is likely to grow for the foreseeable future. With the technology sector creating billions of dollars in value for investors, there is no better time to learn how the infrastructure of the internet has been conducive to this growth. With technology continuing to disrupt nearly every industry, it’s important not to lose sight of the fundamentals of great business, value creation.
How The Internet Works below
