Cocktail Investing

Chapter 7Profiting from Pain

Problems are just businesses waiting for the right entrepreneur to unlock the value.

– Jay Samit

If you want something new, you have to stop doing something old.

– Peter Drucker

Each problem has hidden in it an opportunity so powerful that it literally dwarfs the problem. The greatest success stories were created by people who recognized a problem and turned it into an opportunity.

– Joseph Sugarman

When we call this chapter “Profiting from Pain,” we're talking about how solutions for pain points pricking consumers and businesses can generate investing opportunities.

It's crucial to be an outside-the-box kind of thinker, recognizing the opportunities that pain points can offer. So just what do we mean by pain point? In this chapter we'll walk through a series of ongoing pain points and show you how to look for the investing opportunities hidden within them.

Over the course of our investing years, many a problem has confounded businesses, consumers, and governments. Much like the ones you face in your everyday lives, they come in all shapes, sizes, and degrees. Some are seen well in advance, some are off the radar but still eventually hit between the eyes, while there are ones that are never seen for what they are or could be until it's too late. There are the minor annoyances that lead to a minor grimace, but there are also those that really hurt.

We refer to them as pain points, and they tend to alter the very course of human behavior. For example, ...