Quote:
Originally Posted by JackieFrost
@Dmc. Of course the simple answer in what to expect is, profit. Possibly the not so simple one is profit too, to begin with. Why do you feel there aren't a lot of profits to be made. I thought the consensus here would be that epaper and ebooks in one way or another are going to revolutionize paper and reading much like the mp3 players are doing to music.
|
Investing 101: you make money in two ways. You make money in the form of capital gains as your stock increases in value, or you make money in dividends because the company does well and pays them.
What available plays do you see in ebooks and related technologies that offer either?
You can invest in Amazon or Sony, betting that their investments in readers will pay off big time. But you'll pay a high price, and capital gains will be questionable, as both of these are fairly mature companies. You'll be in it for dividends. (And capital gains are entirely on paper until you
sell your stock, at which point taxes kick in.)
What other publicly traded plays are out there? Not a lot.
Yes, ebooks might "revolutionize paper and reading much like the mp3 players are doing to music", but so what?
Everybody listens to music. Only a small subset of everybody reads books, in
any format. Publishers are all suffering because unit sales are flat or down, and revenue only increases (if at all) because of higher prices. Entertainment conglomerates who bought up publishers are beginning to divest them because publishing
can't provide the sort of margins and earnings that other forms of entertainment can. As custodians of Other People's Money, the management of those conglomerates are required to invest corporate funds where they will earn the highest rate of return, and publishing is not such a place.
The question is whether the ebook market is big enough to provide significant gains. Maybe, but it's not a bet I'd wager a lot on. If my goal is to get the maximum return on my investment, I might look elsewhere. Use the "opportunity cost" test. Look at various investments you could make that are relatively safe, like index funds or bonds. Look at the return you can make from them. Then say "What is the risk in this new investment I'm thinking of making, and is the possible reward high enough to justify the additional risk?"
I might invest in ebook related ventures, but if I did, it would be because I loved ebooks and wanted to further them. I'd try to make sure I didn't
lose a lot of money, but I wouldn't expect to
make a fortune, either.
______
Dennis