I’m glad to say that I bought some stock in eBay over a year ago. The price is now at $88.00 and climbing. I’m not usually very good at picking stocks, but in the case of eBay it seemed like a no-brainer. The more that people discover eBay and use it, the more money eBay’ll make. Basically, they are simply charging a transaction fee for people to sell goods to a worldwide audience. Obviously, the more transactions they have the more money they’ll make. And the odds of a competitor cropping up are virtually nil (after all what idiot would sell goods on a competitor site that had less users?),
And it appears from Robert Scoble’s encounter with an unnamed eBay executive that they are expecting the profitability trend to continue. Still, I don’t usually put much emphasis on information like that garnered by Scoble; you don’t know who the guy was and whether he was really telling the full story. But I use eBay and I can see how easy it makes selling and buying virtually anything. So, my decision to invest in eBay is simply a derivative of Peter Lynch’s admonition that people should only invest in things that they understand (but see this blog post that addresses Peter Lynch’s advice in the context of eBay).
P.S. If you want a better practice, start using the 80/20 Principle.
