Shopping at Amazon Whole Foods

One of the joys of bringing my kids to a swim meet is the vast amount to time it affords between their events to read, or chat. A topic that came up among neighbors, many times, is Amazon’s purchase of Whole Foods. Are we concerned about two of our favorites combining, or are we excited?

Amazon may get a larger foothold into neighborhoods across the country where it can distribute other services and devices, not just food. It’s an optimistic opinion, no doubt.

In my opinion, Amazon does not belong in the grocery business.

One of the joys of bringing my kids to a swim meet is the vast amount to time it affords between their events to read, or chat. A topic that came up among neighbors, many times, is Amazon’s purchase of Whole Foods. Are we concerned about two of our favorites combining, or are we excited?

Amazon may get a larger foothold into neighborhoods across the country where it can distribute other services and devices, not just food. It’s an optimistic opinion, no doubt.

In my opinion, Amazon does not belong in the grocery business. The profits on grocers are typically 2%, and even at 5%, Whole Foods’ profits are far less than Amazon’s other businesses. “What a mistake,” says one commentator.

“Amazon will help me get rid of my mini-van,” says another commentator. “I spend more time shopping for food than I do anything else, and the only reason I own this thing is to tote my kids, and stuff for my kids, to and from various places. If Amazon can take the food from my local grocer, to my home, I would save hours of time!”

“No way,” says one mom, “am I going to trust anyone to choose my fruit. Are you crazy?”

And then we think about the massive changes that other technology companies are bringing to our lives. Like Elon Musk, of Tesla, SpaceX, Solar City, and other fame. He’s disrupting everything. Or Apple, who might become the world’s first trillion dollar company, with several hundred billions of dollars in cash. What power will the CEOs of these companies hold? And to whom are they accountable?

The greater vision, really, from this incredible change is far more powerful, but boring, than any of these futuristic dreams on a hot Saturday afternoon at the pool. They are, instead, a testament to free markets. The power of these companies can be taken away as swiftly as it was given. Not years ago, but months, we worried about Walmart destroying the neighborhood and the small business owner. Years ago, it was China. Decades ago, Japan was going to own America. Decades before that, and lasting for decades, it was the USSR. Tomorrow, who? 

The incredible testament to today’s fantastically fast pace of change is rooted in the boring—it is called Moore’s Law. Originally, this idea described how quickly technology advanced and the rate at which computer processors doubled, while the costs were cut in half. Today, it describes the deflationary power of technological invention.

Today, I posit that technology is an extension of our humanity. We are, or can choose to be, more human by embracing more of the incredible inventiveness around us. As new companies emerge and redefine our futures, we may participate in their success in our portfolios through the sheer magic of diversification, or owning enough of any idea to benefit, but not so much to be killed by it. 

And the prices, at Whole Foods and other grocers, are likely going to go down.

Finally, I believe we are changing our attitudes, and becoming, as a whole, more confident in the stock market. This week, headlines I saw showed upward tilted lines, and the words I heard from our clients are bullish—excited about the future. These are contrary indications. Caution, friends, over the short term may be warranted, because often we feel best right before a scare causes other people to sell.

But not you. And not me. We’ll embrace the benefits of innovation, and see what the future reveals.

The information does not represent, warranty or imply that services, strategies or methods of analysis offered can or will predict future results, identify market tops or bottoms or insulate investors from losses. This material is provided for general information only and is not an offer to sell, nor a solicitation of an offer to buy any securities or participate in any investment or trading strategy. Diversification and/or asset allocation do not ensure a profit or protect against loss in a declining market.

Fiduciary Standards: The Right way to Invest
The Dow is (Partially) an Advertisement

Go Tax Free

A&I Financial Services - Karl Frank Book - Go Tax Free

 

 

 

 

 

An assortment of tools and strategies that give readers of all backgrounds a clear, specific action plan for obtaining the maximum allowable control over when and how they pay taxes.
Learn more

Green Initiative Side Bar 2

Go Paperless 

Addressing Global Concerns on an individualized basis