To me and all my fellow NY Jet fans, another terrible football season for the home team is made worse by our nemesis Tom Brady winning another Super Bowl. A remarkable seventh time – truly the greatest quarterback of all time.
Tom Brady’s first Super Bowl appearance came in 2002 as the New England Patriots faced off against “The Greatest Show on Turf” (aka the St. Louis Rams) in Super Bowl XXXVI.
At that time, George W. Bush was president. The iPod was created the previous year (and selling for roughly $399), and the biggest movies included “Harry Potter and the Sorcerer’s Stone”, “The Lord of the Rings: The Fellowship of the Ring” and “Black Hawk Down”. “A Beautiful Mind” went on to win Best Picture at the Academy Awards the following month.
But I want to bring your attention to are the companies who paid for commercials during that January 2002 Super Bowl. I hope when you see the names of companies that were doing so well that they could afford to pay the usual exorbitant fee for a 30-second slot during the Super Bowl, it will help highlight why you need to have a diversified investment portfolio.
This is a small list of the businesses that advertised during Brady’s first Super Bowl. You may notice a trend.
Blockbuster, RadioShack, Circuit City, CompUSA,
Sears, Hot Jobs, and Gateway Computers.
All of these companies are either bankrupt, have merged out of existence or are struggling mightily to continue. In less than 20 years, they went from paying for the top advertising TV slot to being unable to continue or struggling to continue as a going concern.
To highlight 2 of these companies:
- CompUSA – Starting with one brick-and-mortar store in 1986 under the name Soft Warehouse, by the 1990s CompUSA had grown into a nationwide big box. At its peak, it operated at least 229 locations.
Crushed by competition from online and other brick-and-mortar retailers, CompUSA began closing locations in 2006. By 2008, only 16 locations were left to be sold to Systemax. CompUSA now operates as an online-only retailer.
- Circuit City – According to Circuit City’s website, the company announced on January 16, 2009 that it intended to liquidate all of its stores. Reportedly, over 30,000 employees lost their jobs in the liquidation, as well as 45% of Verizon’s Circuit City sales force being laid off with the remainder resigning or transferring to other Verizon locations.
During the liquidation of all Circuit City stores across the nation, the company’s online store was closed, and replaced with a page that read as follows:
Circuit City would like to thank all of the customers who have shopped with us over the past 60 years. Unfortunately, we announced on January 16, 2009, that we are going out of business.
These 2 companies and the others listed as advertisers during the Big Game are the victims of what has been termed “creative destruction”. This is where new better ideas come into an industry destroying the existing companies. Both of these companies fell victim to new online retailers and larger box retailers.
As you invest in the stock market, realize that some companies, and thus their stock performance, will not survive or do well over the long term. The key is to own all publicly traded stocks in your portfolio so that you ensure you own the several companies that grow substantially in size and profits over time.
These innovative corporate giants, and the ones that will follow in the future, are what drive the overall substantial equity gains of the overall stock market. Make sure you own all of them rather than trying to choose the ones that will outperform the market.
Hope you have a great week!
Thanks to my daughter Kathryn for the post suggestion!