Netflix vs. Blockbuster

Michael Scott from an episode of The Office earlier this spring:

"It hasn't been a blockbuster year for me financially.  My Blockbuster stock is down." 

In July of 2003, the share prices of Netflix (NFLX) and Blockbuster (BBI) were both hovering around $10/share.  Needless to say, these two companies were about to go in opposite directions. 

NFLX has risen a staggering 786% since July 1, 2003 while BBI has fallen an inversely staggering 98% over that same time period.  In fact, BBI is in so much trouble that it will likely be delisted from the New York Stock Exchange later this summer, rendering its shares virtually worthless.

The NFLX vs. BBI story is a case of two extremes when it comes to investing.  On the one hand, investing in individual stocks is dangerous as you can lose nearly everything.  On the other hand, identifying consumer trends with staying power early on can be incredibly profitable.    

For a great read on some of the most noteworthy corporate successes and failures in the last twenty years, check out Winners and Losers: Creators and Casualties in the Age of the Internet.
 
This chart says it all.  A $1,000 investment in NFLX in 2003 would be worth $8,857 today while a $1,000 investment in BBI would be worth about $22, which you could use to buy a two-month membership to Netflix with four bucks to spare.