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The Investor's Advocate: Disruption for The Disruptors?

How to Own Stocks That Compete With Disruptors

Can companies successfully compete against the so-called Disruptors? And if so, how can you, as an investor, benefit from their success? These questions are explored in a posting called "Forced Feeding" (, on the owner of wealth management firm The Planning Perspective ( ) Anthony Rhodes' How To Invest blog (

"It's very difficult to compete with Disruptors, because paradoxically, you are actually competing against a better version of yourself. "Mr. Rhodes began. "These companies are masters at exploiting business inefficiencies." he added. "The interesting thing about Disruptors is that they don't generally create anything new, but instead use technology and other means to exploit the inefficiencies that already exist within other businesses." he explained. "In essence, their competitors inability to remove the barriers which provide a better experience for their customers is what allows Disruptors to subsist in the first place." he continued.

The term "Disruptor" is used to identify companies whose business model allows them to disrupt or alter the way other businesses operate. It's generally associated with gargantuan companies like Amazon, Netflix or Google.

So, should companies simply lower their profit margins to the bare minimum in order to stave off Disruptors from entering their field of business? Not exactly, says Mr. Rhodes

"There are some measures that companies can implement to help them to better compete with Disruptors, for the benefit of themselves and their shareholders." he stated. "I address them at length throughout the post, but needless to say, it involves confronting the truth about their situation, and taking steps to prevent future Disruptors from ever existing." he closed.   

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