At the beginning of every year, there are many predictions. It was predicted that the Chicago Cubs would win the World Series in 1985 “Back to the Future” movie with Michael J. Fox. What other snippets are hidden in movies? Does the Fortress Investment Group have a plan similar to “Back to the Future?”
Back to the Future
Predictions are easy to make, but very difficult to get right. Most people don’t own a crystal ball. If you check out all of the predictions made each year, you will find a very low success rate.
That is one of the reasons why the “Back to the Future” Chicago Cub’s World Series victory prediction was so amazing. It was the Cubs. ‘Nuff said.
To be fair, the movie was off by a year, but no one is really keeping track of that. It was close enough.
An element of the Fortress Investment Group strategy seems to be based on revisiting the past. This might be best exemplified by the Fortress November 15, 2006 acquisition of RailAmerica Inc. Many people had already written off American railroads, just as they had written of the Chicago Cubs.
One of the reasons why Warren Buffett prefers blue-chip stocks is their inherent value. You can’t really replicate good brand, like Coca-Cola, the Chicago Cubs, Wrigley Gum and the Fortress Investment Group. Each has achieved a certain cache in a moment of time.
People remember where they were when the Cubs won the World Series. They are not alone. They can connect with the entire city, celebrating the championship. There is a common feeling of joy – people feel connected.
They can toss in some Wrigley Gum or drink a Coke and smile. These are the brands that Americans have grown up with. Fortress understands this emotional appeal.
Rebuilding American Infrastructure
Why should anyone invest in a railroad when there are airplanes? That has become the prevailing wisdom of the modern realm. But, the Fortress Investment Group was able to think outside the box. It could identify undervalued assets.
The Fortress Investment Group has profited by re-bundling America’s prime transportation infrastructure. Its principals are well-heeled and have the tools to upgrade transportation facilities.
While American railroads and the Chicago Cubs might have been cute to some, they were successful. The Fortress Investment Group understands the importance of yesterday, today and tomorrow. Perhaps, it might be time to dust off some of those old vinyl records.
But, isn’t that the very essence of a hedge fund? It buys assets when they are seemingly irrelevant. This is when their price is low. Then, it upgrades the brand and resells them for a higher price.
If something is vintage, then it never really goes out of style. Perhaps that is what we can learn from the Chicago Cubs and the Fortress Investment Group. Vintage quality withstands the test of time.
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