Why did Harvey Norman beat Amazon? It’s a cautionary tale
Sydney Morning Herald
by Chris BryckiFebruary 24, 2026
AI-Generated Deep Dive Summary
Harvey Norman’s outperformance over Amazon from 2021 onwards is a surprising and cautionary tale for investors. In early 2021, it would have been met with skepticism to suggest that an “old economy” retailer like Harvey Norman could surpass the global e-commerce giant. At the time, Amazon was trading at a valuation that reflected years of uninterrupted high growth, with expectations so high they bordered on perfection. While Amazon continued to grow and dominate its industries, its share price lagged behind traditional retailers like Walmart, Costco, and even Harvey Norman in Australia.
The key lesson here is about the gap between perception and reality. Investors often overvalue companies that are seen as “sure things,” pricing in perfect performance rather than realistic growth. When a company like Amazon becomes so beloved and expected to deliver flawless results, it’s harder for it to exceed already lofty expectations—even if it continues to perform well. Meanwhile, undervalued or underestimated companies can surprise the market with modest improvements that feel significant compared to lower expectations.
This story highlights the challenges of investing in high-profile, consensus picks. While Amazon is a dominant player, its stock struggles to outperform less glamorous but more reasonably valued options. The article emphasizes that returns often come from identifying mismatches between what the market expects and what actually happens. Investors must focus on companies where reality can exceed—or fall short of—consensus views.
For everyday investors, this means avoiding the trap of chasing popular stocks or selling off after minor disappointments. Instead, a diversified approach through index ETFs is suggested as a more reliable strategy. By spreading investments across many sectors and countries, individuals reduce risk and align with broader market trends without needing to predict winners and losers. This approach avoids the pitfalls of overvalued “perfect” companies and leverages the power of compounding returns.
Ultimately, consistently beating the market requires being contrarian and correct—a difficult task even for professionals. Instead of trying to outguess the market, investors can benefit from broad exposure to global markets through low-cost index funds. This strategy acknowledges the efficiency of markets while offering a practical
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Originally published on Sydney Morning Herald on 2/24/2026