I find no fault with my Foolish colleague Anders Bylund's history lesson on Netflix
For a company to survive and thrive into the future, it must focus on the next generation of threats. I pointed out last November that even with traditional movie-rental stores in decline, Netflix is still stuck between a rock and a hard place. On one side, video-on-demand services from the likes of Time Warner
As fiber-optic Internet connections get added to people's homes, video download services and instant-rental business will likely add yet another level of competitive threat. Netflix has a great past, but its future is on shakier ground. As we teach at Motley Fool Inside Value, companies are valued based on their potential future earnings prospects. The past establishes a track record, but it says nothing about what will happen tomorrow. For Netflix to be worth what the market values it at today, it needs to have both a solid strategy and the technology in place to fight the next war, not the last one. Until I see definitive plans in that direction, my money is staying away.
Netflix and Time Warner are Motley Fool Stock Advisor selections, and Wal-Mart is a Motley Fool Inside Value pick. Take your favorite Foolish investing service for a free, 30-day trial.
There's more to this Duel! Check out the other three arguments, and then vote for a winner.
At the time of publication, Fool contributor and Inside Value team member Chuck Saletta had no ownership stake in any of the companies mentioned in this article. The Motley Fool has a disclosure policy.