You Could Make a Fortune Following Habits
In 1993, Eugene Pauly walked into a lab. He had made the trip multiple times now, however, each time he reintroduced himself to doctors.
Eugene was elderly, wore thick rimmed glasses, and had arthritis.
Walking him slowly into the room was his wife. She now did most things for Eugene. A year earlier, Eugene or E.P. as the medical world would later call him, suffered from viral encephalitis.
It’s relatively harmless. The virus produces cold sores, fevers and mild infection. In rare cases, it can make its way into the brain. There, it eats into soft folds, removing dreams and memories.
There was nothing the doctors could do to repair the damage already done. ‘He might not be the person you remember,’ doctors told Eugene’s wife.
But as they would later find out, Eugene would become a medical marvel, thanks to the power of habit.
The power of habit
Eugene would forget most of his friends and couldn’t remember any new experiences after his illness. Many times he would forget that he already ate and continued to remake breakfast time after time.
When asked to make a sketch of his house or street, Eugene couldn’t do it. He would try to doodle something, but then forget what he was drawing.
He also couldn’t explain how he got from room to room or which door led to the bathroom. But when Eugene had to go, he’d get up and walk straight to the bathroom.
When Eugene was hungry, he also knew how to get to the kitchen and where all the utensils were.
Eugene even managed regular trips around his neighbourhood. When asked where his house was, Eugene would say, ‘I’m not exactly sure.’ But he would manage to find his way back every time.
How you ask? The power of habit.
It’s how you managed to drive to and from your house without thinking, or how you navigate your smartphone with ease. The author of The Power of Habit, Charles Duhigg, said in an interview:
‘…habits are a big deal not only in our lives, because about 40% to 45% of what we do every day sort of feels like a decision, but it’s actually habit.’
And it’s these deep rooted rituals, which many fortunes have been made on.
First cue then reward
How can Facebook, Inc. [NASDAQ:FB] make you spend more time on their platform?
They give you a reward for jumping on. This could be a notification, message or friend suggestion. After time, this creates a habit. Jump on Facebook to get a reward.
It’s why users jump on Facebook multiple times a day. Even without being prompted, they do so out of habit…looking for a reward.
This strategy isn’t unique in the West. The same happens in China. For example, one social app in China offers discounts to users if they share products with their friends. Another sends users digital coins to post photos of themselves wearing branded clothes, makeup and accessories.
South China Morning Post writes:
‘Like millions of Chinese, Huang Xinyi almost never has her smartphone, an iPhone 8 Plus, out of reach. It is the first thing she picks up after waking up each morning, and the last she puts away before turning in for the night.
‘During the day, pockets of free time are spent on various social apps on Huang’s phone — be it checking out her Moments feed in WeChat to see what friends are up to, browsing Taobao deals for a new summer wardrobe or challenging friends to a game of Honour of Kings.
‘“[Social apps] allow me to keep in touch with my friends and inform me of trending topics. They’re a great way to entertain myself whenever I feel bored,” said Huang, a 27-year old freelance producer based in Beijing. “I am so used to interacting with my friends and entertaining myself on such apps that it’s become a habit.”’
Why is this important?
Strong habits can lead to amazing investments. Take online shopping in China for example. Buying not just clothes but food, electronics and other goods online is a growing preference in China.
You could say it’s slowly becoming a habit — to buy online rather than buy in-store.
More than 61% of shoppers said they strongly or somewhat prefer to shop online. Those on the older side of the fence made up only 9% of China’s 771 million internet users.
Had you seen this development just three years ago, you might have ventured into stocks like Alibaba Group Holding [NYSE:BABA], Tencent Holdings Ltd [HKG:0700] and JD.com Inc. [NASDAQ:JD].
Today, all three are some of the best blue chip investments you could have made. But there is a whole host of other companies profiting from Chinese habits just flying under the radar.
In my brand new advisory, Wealth Eruption, I’ve already found five ASX stocks that could significantly rise on the back of China.
To find out their names, click here.
Editor, Money Morning