Thank you for a great response!

Yesterday's poll was intended to illustrate a few things:

1) Investing in stocks is a great way to build long-term wealth.

2) Investing in individual companies can significantly improve your overall returns. https://twitter.com/7Innovator/status/1249722583576186882

First, let's talk about the returns:

Portfolio 1 grew $300 of initial capital ($100 each into 3 stocks) to $1,600 in 10 yrs. That’s a $1,300 profit & an 18% annual return.

Portfolio 2 grew $700 of initial capital to $1,400 in 10 yrs. That’s a $700 profit & a 7% annual return.

In terms of performance, Portfolio 1 was the superior option.

But hindsight is always 20/20, and investing is never actually that easy!

So now, let’s look at the actual story & the companies those numbers are based upon.

(Huge thanks to @ycharts for the following graphs).

In Portfolio 1, the 15-bagger represents Amazon $AMZN, who has become the undisputed champ of America’s e-commerce market.

This “winner-take-all” dynamic has also proven true in other regions – where MercadoLibre $MELI and Tencent $TCEHY have also provided incredible returns.

The “stock that remains flat” could represent several other companies, who are also competing against $AMZN in the retail industry.

At various points during the past decade, investors may have considered some of these companies.

Existing retailers tried to adopt their own e-commerce strategies.

They largely failed & couldn't compete with $AMZN's thin margins & 2-day shipping. In response, they closed stores & laid off staff.

In the market, these stocks often appeared as "cheap" or "value" investments.

But that doesn’t always result in complete disaster.

Many of these middle-tier retailers got acquired by others – either by larger retailers with more efficient supply chains or by private equity companies.

The investment returns have been a mixed bag.

Some retailers, like Ross Stores $ROST or $TJX have actually done quite well and held their own against e-commerce competitors.

Others, like Macy’s $M or Kohl’s $KSS, not so much.

Other times, new companies attempted to challenge Amazon $AMZN online.

Zulily was a great example, who went public in 2013 only to be acquired by QVC just 2 yrs later at a price 15% lower than its IPO.

Wasn't as easy as it might have seemed.

So altogether -- balancing the successes, the acquisitions, and the failures -- I’ve considered physical retailers and e-commerce newcomers to be a zero-sum game.

Hence "other retailers" was the stock that remained flat in Portfolio 1.

And the stock that lost everything could be any physical retailer who went bankrupt. Lord knows we’ve seen a lot of them in recent years.

Sears has grabbed the headlines. But there are several dozen others who have also filed Chapter 11 in recent years.

Portfolio 2 was much simpler, representing the S&P 500.

The broader market has returned 129% during the past decade.

Much of that is from our recent rally. If we set the end date a month earlier, its 10 yr return would have been just 86%.

So here's a few final thoughts:

The 3 stocks in Portfolio 1 represent taking a portion of your nest egg & investing in individual stocks.

Even w/ a retail basket approach - where some companies win big & others fail - you can achieve excellent overall returns w/ this strategy.

The 7 stocks in Portfolio 2 represent investing in the S&P 500 index.

We often invest more money here ($700 vs $300), and it still provides a pretty darn good overall return. Especially when compared to hoarding cash!

But the outperformance of companies like Amazon $AMZN remains muted in the index – causing Portfolio 2’s overall returns to lag.

If you're buying individual stocks, it often pays to invest in the industry disruptors. And if you catch a winner, hold on to it for the long-term!