Matthew Effect

I often think about the ‘Matthew Effect’ when investing.

For to everyone who has, more will be given, and he will have abundance

- Matthew (25:29) The Bible

I have three variables I look at in reference to investing in this framework.

• Are they winning?

  • Disruptive innovation ensures that they are the only ones with a new technology, skill, resource, knowledge, or ability.

  • Or they have a significant moat in a given sector, meaning they have a monopoly or are so advanced that others can’t catch up.

• Are they accessible?

  • Visibility is necessary to adoption. Call it marketing, a brand, or just connecting with interested people.

  • Communicating their vision in clear and simple terms. And allowing others to join their cause.

• Is it legal?

  • The ability to negotiate the regulatory framework. Avoiding being held up in legal red tape.

  • Government contracts are a particularly potent way to bypass the bureaucracy.

In the end, Investing in stocks gives you the ability to align yourself with the winners that are accelerating.

If you can’t beat them… join them.