The Thanos strategy

In this blog post, I will present a fundamental consideration of investing that I came across some time ago and also address some difficulties.

Basics

The Thanos strategy is not an abbreviation, but the question of whether it or how many it would interest if the object of the investment no longer existed. It can also be used to conceive the moat. And yes, this is about the Snap of Thanos in Marvel.

Here is an example:

Tom is interested in acquiring shares from company X. To do this, he is considering whether or who it would care if this company did not exist at all. The company is known to many and their products are widely used throughout the society. It follows that a lot of people are interested in the company's existence.
So it would have passed this test. Nevertheless, it is not yet possible to say that this company is a good investment.

Also the other way around:

Tom is thinking again, this time for company Y and notices that few know it or use their services/products. Consequently, it would be less interested in whether it continues.
Company Y would therefore not have passed the test.

Difficulties

As the examples already show, you can't evaluate it without exclusion because:

This strategy is very superficial and gives the risk of your own bubble falling. For example, if everyone you know uses a product, it does not mean that everyone uses it.

In addition, it often excludes young companies or benefits old, non-innovativ companies, simply because of its notoriety.

Also, awareness and the benefit of the product is not a guarantee of durability by many. Nokia would have been quite right with this strategy in the past, but only when it was already big, although it no longer plays a major role today.

Conclusion

The Thanos strategy gives you the opportunity to quickly and easily think about an investment. In addition, if you think about it, you will probably continue to find out more about the company. So it's practical for the first consideration by showing you how much you even know about the company: Invest in something you understand.

A fundamental consideration is by no means a ready-made investment strategy. Rather, there should be assistance or point in a certain structure and direction.

So continue to inform yourself after the first consideration.

Disclaimer: This article does not contain financial advice. The information is provided for general information and educational purposes only.