Through the Lens of an Investor

Sometimes life is funny, like when you give a blog post a title without realizing until after that it was subconsciously inspired by what got you to write the post.  This post, for example, was inspired by some of the lively discussion that happens on Digital Photography Review, better known by its web address dpreview, and of course a lens is an integral part of photography.  Title explanation aside, dpreview.com started in 1999 as one of the first sites and arguably now the largest site devoted to digital photography.  A large number of site viewers also use Adobe products like the ubiquitous Photoshop and Lightroom.  Therefore, dpreview posts news articles like the June 19 one about Adobe’s recent record-breaking Q2 (second quarter) results, but that’s when the article discussion can get very interesting – and heated.

What you need to understand about Adobe from a photographer’s standpoint (my second-favorite hobby behind investing and another, albeit small, source of income) is that they have created a firestorm of debate and even anger about their switch to a subscription model a couple of years back, including the ability to use Photoshop and Lightroom.  News about Adobe’s Q2 results dredged up the same debate as news of previous blockbuster quarters:  one camp argues that they would have preferred things stay the old way; that is, spending several hundred dollars for the traditional one-time DVD purchase or download and using it for as long as they possibly could.  The other camp argues that a subscription gives you a better deal over the long run, but the opponents counter that a subscription forces you to remain tied into using Adobe products, making switching very difficult.

There remains a very deep division and even a lot of resentment and anger among photographers about this move by Adobe.  However, I’ve realized that those who complain the most make little to no money with their photography, at least not enough to pay for a subscription.  So it’s frustrating from a hobbyist point of view, but pro photographers and especially Adobe investors are experiencing immense benefit.

I was with the first camp, very disappointed about the prospect of subscribing because by upgrading Lightroom once per year and Photoshop Elements every 2-3 years, I was spending less per month than a $9.99 US Creative Cloud (CC) subscription.  However, CC also comes with the full version of Photoshop, not the watered-down Elements, and so the subscription idea became very compelling.

Eventually, I decided that if I couldn’t beat ’em, I needed to join ’em.  I was already very much locked into using Lightroom (LR) to manage my photos, making the idea of switching to something else incredibly daunting, plus the other software options weren’t as compelling to me.  Lightroom basically kicks butt.  Also, I liked the idea of the full version of Photoshop plus LR’s full integration with it when needed.  So I finally gave in and became a subscriber myself, not because I love the idea financially, but because it makes the most practical sense for me.

But here is where I also decided to view this situation through the eyes of an investor instead of just a consumer.  Many people commenting on the dpreview Adobe news articles don’t realize that they could also buy shares in Adobe stock (ADBE) and offset the cost of being CC subscribers, assuming the company continues to even modestly grow from now on.  Some of the article commenters even suggest this idea, but many reply by stating that they “can’t afford” to invest in Adobe.  However, they don’t seem to have a problem with dropping $1,000+ into a lens purchase – all of a sudden, they seem to have money to spare.

My point in sharing this story about Adobe is that you can complain until you’re blue in the face about this-and-that company moving to a subscription model or upping their prices or fees or rates for a product or service.  However, that’s viewing things through only the lens of being a consumer.  An investor decides not to get mad, but to get even by deciding to buy shares in the stock of those companies listed on a stock exchange that sell the things they like or have – or need – to own.

To use another example, say you’re a Costco member or an Amazon shopper or an Apple fanboy/fangirl or a Starbucks regular or a a fan of Nike or Under Armour apparel.  Instead of constantly paying to use products and services, why not get paid for using them by buying stock in your favorite companies?  Why not, over a number of years, potentially have the amount you spend on their products and services be not much more than your investment returns?  In some cases, maybe you’ll eventually earn more in returns on stocks like these than you ever spend on their products and services?

In my case, I didn’t become an ADBE shareholder so that I could sell a share every few years to make up for those few years of CC subscription costs.  I bought it strictly, like all my stocks, for my later years, believing it to still be an incredible future financial opportunity for me and my family.  But I like to think that I’m “paying” for my subscription by earning a return on my shares of ADBE even though I don’t plan on cashing out any of my shares for that purpose.

As for those people who think they “can’t afford” to buy a few hundreds of dollars of stock in a company when they have zero problem with dropping multiple hundreds or even thousands in a product or service provided by that company, I have a few thoughts and suggestions:

  • You don’t need to be “rich” to buy stock in a company.  You can buy just one share in a company if you like.
  • If you can justify spending a ton of money on gadgets and drinks and apparel and photo gear/software, but can’t justify buying stock in a company, first of all, what will your financial situation look like years down the road if you remain only a consumer?  Second, what does this say about your financial priorities, i.e. spending versus saving/investing?
  • If you’re afraid of losing money on a stock like ADBE (as some commenters admitted), you’re right:  any stock can lose money.  In fact, any stock can go down to zero!  However, you can only lose 100% of your money in a stock, but you can gain way more.  The early investors in Netflix, Disney, Amazon, Priceline (now Booking Holdings) – to name but a few companies – have multiplied their initial investment many times over, in some cases over 100 times over!  (Assuming, of course, that they’ve held on.  Investors who buy shares today in companies like Shopify or PayPal or Square or Okta could be in the same situation years from now if they don’t sell.)
  • If you’re afraid of losing money, then buy at least a dozen stocks instead of only one or two.  That will spread your risk, especially if you buy quality companies like the ones mentioned thus far.  It’s that whole idea of not putting all of your financial ‘eggs’ in only one ‘basket.’

I hope that you now understand the importance of learning to see through the lens of an investor instead of only buying things all the time.  Why not start benefitting by getting paid by the same companies that have only taken your money to this point?  This is one of the greatest benefits of living in a free market society:  the ordinary person can benefit by sharing in the ownership of the most successful and famous companies by way of the stock market, but unfortunately this is not understood by most of the consumers in such a society.

One last thing:  be sure to click the Follow button near the top of this page.  Also, if you’re a brand-new stock investor – or still thinking about it – then I highly recommend starting with my 5-part Stock Starter Series.  To new beginnings!

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