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Thursday, March 28, 2024

“America Online 2.0” Has Arrived: Here’s What to Expect

By Mauldin Economics. Originally published at ValueWalk.

America Online CAPE level DOL proposal Equity Market Structure Tech Sector Stronger Producer Price Index Invest Locally Long Term investing goals

George Bertoty was ready to enjoy retirement. His kids were all grown up, and it was time to sell the family home. George was eager to cash out and downsize, but he dreaded putting his house on the market.


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I’m sure you know selling a home can be a nightmare. You have to navigate local laws, tend to repairs, and negotiate offers. And if things don’t go smoothly, prepare for petty arguments and dealing with incompetent real estate attorneys.

George just wanted a hassle-free sale. So he reached out to a company offering a new, easy way to sell your home. If you’ve never heard of Opendoor, it’s an internet “realtor” that will buy your house sight-unseen.

George simply typed his address into Opendoor’s website. The next day, a realtor called him with an offer. The next day! And get this: within three weeks, George had the money in his bank account.

Imagine Selling Your Home Without Even Having to List It on the Market?

No open houses, no negotiation, no waiting months for the buyer to come up with the money. In fact, Opendoor’s average closing time from the first offer is less than 20 days. Here’s the thing: until recently, the idea of selling your home on the internet was “weird.”

If you’re not used to the idea, it probably still sounds weird. But Opendoor has now bought and sold more than 65,000 homes online. And internet realtors are making real inroads in some big markets. In Raleigh, North Carolina, these firms bought roughly 7% of houses for sale last year.

If you think the internet has transformed America, you ain’t seen nothing yet. By now, we all know how Amazon (AMZN) disrupted shopping. Netflix (NFLX) smashed cable TV. And Google (GOOG) and Facebook (FB) essentially stole the bulk of the advertising business from newspapers, magazines, TV, and radio.

The internet has changed the world in a seemingly short period. But don’t let this fool you. Because we’re only in the first inning of the internet’s disruption.

We’re Now Launching into “America Online 2.0”

“America Online 1.0” was about stuff that was “easy” to move online. It’s easy to deliver TV and movies over the internet. It’s easy for Amazon to put toys or diapers in a cardboard box and ship it.

Selling a house online? That’s a whole different ballgame. According to Pew Research, 310 million Americans used the internet last year. But did you know 85% of our spending still happens offline? In other words, almost everyone is online, but most of the money isn’t.

For example, Americans spend more money on groceries than anything else besides housing. But the percentage of groceries bought on the internet is little more than rounding error. (Although coronavirus is changing this fast).

Same for trillion-dollar markets like healthcare, autos, and education. But internet disruptors are finally breaking into America’s largest, most important industries.

Ever Hear of Carvana (CVNA)?

The “Amazon of autos” is on a mission to disrupt the $1 trillion US car market. In short, Carvana’s innovative app lets you buy or sell a car in under 10 minutes.

Carvana will then deliver it to your doorstep the next day. Or you can choose to pick up the car from one of its 24 giant “vending machines.” Here’s a look at its eight-story automated car dispenser in LA:

Source: Carvana

Carvana sold 180,000 cars through its app in 2019 alone. Buying a car from a vending machine as if it’s a Kit-Kat might seem a little “weird.” But Carvana stock has handed early investors 1,100% gains and counting.

America Online

Internet Disruptors Are Even Cutting into America’s Two Most-Broken Industries

Five years ago seeing a doctor on the computer wasn’t just “weird.” It was unheard of. Trust a quack internet doctor? Are you out of your mind?

Today Teladoc (TDOC) is transforming how people access healthcare. Teladoc is essentially “Uber” for doctors. Its website connects folks seeking medical care with physicians. And get this: in the first quarter of 2020 alone Teladoc hosted two million online medical visits.

“Telehealth” is here to stay. You can now get advice from top doctors from your living room. Why sit in a doctor’s waiting room with folks coughing and sneezing all around you when you can often get the exact same advice without leaving your house?

Teladoc is winning thousands of new customers every day, and its stock has surged 200% over the past year.

America Online

The internet is also shattering America’s most “undisruptible” industry—college. Coronavirus has forced practically every college to move their courses online.

Millions of American teenagers happily borrowed hundreds of thousands of dollars to live a 4-year party known as the “college experience.” Do you think they’ll be as eager to mortgage their futures in order to watch college lecture videos on the internet?

I seriously doubt it. Many colleges are in for a rude awakening. Coronavirus has permanently broken their business model. Meanwhile, remote learning is primed for its “breakout moment.” One stock I’m watching is 2U (TWOU).

In short, 2U runs online classes for 73 of the world’s best colleges including Yale, Cambridge, Georgetown, and NYU. More than 225,000 students have enrolled in its courses.


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The post “America Online 2.0” Has Arrived: Here’s What to Expect appeared first on ValueWalk.

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