This Historic Tech Blunder Teaches an Important Lesson
The largest company in the world tried to get sneaky. But its customers saw right through it.
This leads us to one of the most important investing lessons.
But first, let’s cast our minds back to the mid-2010s.
Some online commenters noticed that their smartphones were slowing down. And the lag couldn’t be explained by aging hardware.
In 2017, iPhone users had their suspicions confirmed: Apple, the phones’ manufacturer, was intentionally slowing down the performance of older phones.
The company insisted that it was for the customers’ own good – the slowdown was meant to compensate for the models’ older batteries.
But customers pushed back. This was part of a planned obsolescence scheme, they said.
Planned obsolescence is when a manufacturer purposefully chooses materials or software that will degrade over time.
As new products get introduced, customers are pushed to upgrade their prematurely failing products for expensive new ones.
Eventually, Apple was ordered to pay iPhone users who were affected.
It’ll be on the hook for up to $500 million in payouts in the U.S. And cases in the U.K. are ongoing (as of June).
This story highlights a growing frustration – we’re getting crap products with shorter and shorter lifespans.
And it’s causing massive amounts of waste while forcing us to spend more money.
It’s infuriating, no matter what Apple says its reasons were.
But consumers have decided to come together and try something new.
Around the same time that iPhone users were sounding alarm bells, some online forums began to tout the idea of buying something “once and for life.”
When you make a purchase, they argued, you should be aiming for something that will stand the test of time.
You should buy something that you can use today, tomorrow, and forever.
Importantly, they’re usually willing to wait for just the right product.
The “buy it for life” forums are full of people talking about their banged-up old water flasks.
They use them while they wait for a specific brand of long-lasting flask to go on sale (or to show up at their local thrift store).
It won’t surprise you that I’m a fan of this movement.
These consumers generate less waste, keeping products out of landfills and waterways.
Plus, their purchases are frugal in the long term. Buying quality up front means spending less money on replacements later.
But they hit even closer to home with their mindset.
I’ve talked about our long-term responsible investing strategy at Mangrove Investor before.
We want to buy stocks that have staying power and that are doing good for the planet and our communities.
We want to do well while we’re doing good. As long-term investors, we especially focus on great companies that we plan to hold for years.
The key to that is patience.
When we find a company that we like and want to invest in, we can be patient until it falls to a price that we’re comfortable paying.
We don’t have to rush. After all, we’re going to be holding these stocks for years to come.
And when it comes to investing during a recession, long-term investors are in an even better position.
We watch our stops to protect our portfolios. But beyond that, we’re able to keep our patient mindset and remember that low prices usually mean better deals.
If you haven’t already, check out some of Mangrove founder Matt Badiali’s work on why time is our best friend and when to sell a stock.
After that, we hope you’ll remember that recessions are usually a great time to buy what you’ve been meaning to buy for a much cheaper price.
Now, onto the news…
Numbers to Know
The price of the British pound sterling against the U.S. dollar – an all-time low. The currency plunged after Chancellor Kwasi Kwarteng announced spending increases and tax cuts on Friday. Experts have called the plan irresponsible and believe it will hurt Britain’s economy in the long run. (Yahoo Finance)
Homes and businesses in Puerto Rico still without electricity after Hurricane Fiona caused an island-wide power outage. The storm battered the Caribbean last week, killing at least eight people. Surging demand for fuel to run backup generators has left many gas stations dry. (U.S. News & World Report)
New utility-scale solar power capacity that came online in the U.S. last year – a new record. There’s now a total of 51.3 gigawatts of utility-scale solar power across 44 states as of the end of 2021. Texas led the way, adding 3.9 gigawatts. (U.S. Department of Energy’s Berkeley Lab)
What’s New in Sustainable Investing
France’s Macron seeks ‘massive’ boost for renewable energy
French President Emmanuel Macron on Thursday called for a “massive acceleration” of renewable energy development in his country. His ambitious plans include offshore wind farms and solar power. Macron seeks to bring France closer to the energy policies of its European neighbors. (The Associated Press)
Electric-car demand pushes lithium prices to records
Lithium carbonate prices in China stand at about $71,000 a metric ton. That’s almost four times as high as a year ago. The China Passenger Car Association forecasts 6 million new electric vehicles will be sold in the country this year – more than the rest of the world combined. (Fox Business)
Links We Like
According to a new study, “the majority of Australia’s young people has low awareness of the environmental impacts of food systems and dietary choices.” (MDPI)
“With a new platform scheduled to debut next month at netzero.salesforce.com, businesses will be able to buy carbon credits from a trusted partner with a third-party verification.” (GreenBiz)
“F2 and FIA Formula 3 will both run with 55% sustainable fuel next season, with the percentage increasing incrementally to 100% by the start of the 2027 season.” (MotorSport.com)