Warren Buffett and Jeff Bezos come from two very different domains. While Buffett has made his fortune through identifying and investing in good businesses, Bezos has created an e-commerce empire. With a market cap of nearly US$1.67 trillion, Bezos’s Amazon is about three times the size of (by market capitalization) Buffett’s Berkshire Hathaway.
Both have been incredibly successful in their respective business endeavours, and both have openly expressed their admiration for each other. Buffett called Bezos the most remarkable business person of our age. Some of Bezos’s success can indirectly be attributed to Buffett, since Bezos has read (and learned from) all of Buffett’s books.
In the ground-breaking announcement that Bezos made in a letter to his employees, he used Buffett’s “trademark” phrase to share his feelings about the transition. Bezos is stepping down from the CEO position of Amazon, despite the fact that he still “tap dances into the office,” a phrase he picked up from Buffett. Bezos will assume the position of executive chairman, and he is excited about this transition, as per the letter.
Despite the mutual respect between the two, this is a major difference. Bezos is choosing to step down from his CEO position at a time when his company is reaching new heights, and he is years away from apt retirement age. Buffett, however, still holds the CEO position and takes an active part in running the company, though he is giving free rein to his successor and other managers for years now.
Canadian e-commerce prospects
While Shopify is not on the same level as Amazon, it’s still the shining e-commerce star in the sky that’s TSX. But if you are inspired by Bezos and want to invest in a Canadian tech stock in the e-commerce sphere, Lightspeed POS (TSX:LSPD)(NYSE:LSPD) might be a better bet. The company has grown at a powerful pace since its inception, and its stock has grown over 380% in less than two years.
The company markets itself as an all-in-one cloud-based POS solution, and it’s remarkable how much growth it has achieved while only catering to three industries: retail, restaurants, and golf. Lightspeed offers a wide array of services to small- to medium-sized businesses in these three industries, including POS software and hardware, e-commerce solutions, analytics, and integrations.
Thanks to its rapid growth after the pandemic-driven market crash, the stock has gotten quite aggressively overpriced, but if it follows the footsteps of Shopify, the stock might still keep growing for a while yet.
One thing that you can learn from both Buffett and Bezos is the importance of understanding the market. Buffett understands the investment market and can spot businesses that usually turn out to be fantastic value investments. Bezos, however, foresaw and, in a way, helped shape the market of the future. As investors, the more you understand the market and business landscape (even within a specific sector), the better your chances of finding a winner will be.
Speaking of the mutual respect that exists between Warren Buffett and Jeff Bezos...
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon, Berkshire Hathaway (B shares), Shopify, and Shopify. The Motley Fool owns shares of Lightspeed POS Inc and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), short March 2021 $225 calls on Berkshire Hathaway (B shares), long January 2022 $1920 calls on Amazon, short January 2022 $1940 calls on Amazon, and long January 2023 $200 calls on Berkshire Hathaway (B shares).