Have you ever wondered why some of the wealthiest investors seem drawn to the most mundane businesses? While everyone chases the next flashy tech unicorn, a secret world of unglamorous companies quietly prints money year after year.
I stumbled across this realization during a particularly boring afternoon scrolling through stock screeners. There it was—a company called Copart trading at what seemed like an absurd valuation for a business that essentially sells wrecked cars. My gut reaction? Skip it. But something nagged at me to dig deeper.
What I discovered changed how I think about investing entirely.
The Hidden Fortune in “Unsexy” Industries
Think about the businesses that make your skin crawl or your eyes glaze over. Funeral homes. Pest control. Government software. Car wrecks. These aren’t exactly cocktail party conversation starters, right?
Yet these industries harbor some of the most profitable companies on earth. While venture capital floods into the latest AI startup promising to “disrupt everything,” companies handling dead bodies and bug spray have been quietly building billion-dollar empires.
The German stock market tells this story beautifully. You’ll find A.S. Création Tapeten AG making wallpaper, WashTec manufacturing car wash equipment, and Viscofan producing artificial sausage casings. Not exactly the stuff of Silicon Valley dreams, but these companies often dominate their niches with margins that would make tech bros weep with envy.
The Psychological Blind Spot That Creates Opportunity
There’s something almost comical about how predictably humans avoid the unpleasant. We’d rather invest in a company promising to revolutionize dating through AI than one that efficiently disposes of dead animals. This psychological quirk creates what academics call “novelty-centered business model design”—essentially, making money from things everyone else finds too weird or boring to compete with.
Research from business schools proves this isn’t just theory. A study tracking 190 public companies found that the weirder and more unconventional a business model, the better its financial performance. The mechanism is simple: when you’re the only one willing to play in a particular sandbox, you get to keep all the toys.
The Anatomy of an Unstoppable “Boring” Business
Let me walk you through what makes these companies virtually unbeatable once they gain traction.
The Switching Cost Trap
Imagine you’re a city government that’s spent three years implementing Tyler Technologies’ court management software. Your staff is trained, your data is migrated, and your workflows are built around it. Now a competitor offers you a 20% discount to switch.
Sounds tempting, right? Except switching would mean retraining hundreds of employees, migrating decades of sensitive legal records, and risking system failures that could literally shut down your courts. Suddenly, that 20% discount looks like pocket change compared to the potential chaos.
This is why Tyler Technologies enjoys what’s essentially a government software monopoly, with 86% recurring revenue that flows in regardless of economic conditions.
The Network Effect Goldmine
Copart figured out something brilliant about selling wrecked cars. The more sellers (insurance companies) they attract, the more buyers show up for the auctions. More buyers mean higher prices, which attracts even more sellers. It’s a self-reinforcing cycle that becomes nearly impossible to break.
Today, Copart processes over three million vehicles annually through this flywheel, generating $4.2 billion in revenue from what started as a single California salvage yard. Their “network effect” moat is so deep that competitors can’t even see the bottom.
The Float Game That Beats Banking
Here’s where it gets really clever. Service Corporation International runs funeral homes, but their real business is financial engineering. They sell funeral services to people decades before they die, collecting payment upfront and investing that money while the customer is still breathing.
Their “preneed backlog” sits at $16 billion—essentially a massive, zero-interest loan from customers who won’t need the service for years or decades. It’s like running a bank where depositors pay you to hold their money, then forget about it until they’re dead.
The Real-World Money Machines
Copart: Turning Car Crashes Into Cash
Every day, thousands of vehicles get totaled in accidents across America. For insurance companies, these represent pure loss—damaged goods to dispose of quickly and cheaply. For Copart, they’re inventory.
Through their online auction platform, Copart connects these “worthless” vehicles with a global network of buyers who see value where others see junk. Parts dealers, rebuilders, and exporters bid against each other, often paying far more than the insurance company expected.
The genius lies in the technology and scale. Copart’s VB3 auction system creates a liquid global marketplace for inherently illiquid assets. They own over 250 storage facilities worldwide—a physical moat that’s impossible to replicate quickly or cheaply.
Last quarter alone, they generated $406.6 million in profit from this seemingly unglamorous business.
Service Corporation International: The Business of Death
Death might be life’s only certainty, but SCI found a way to make it profitable decades in advance. Their preneed sales program essentially turns grief into a financial instrument.
When someone buys a funeral package in advance, SCI invests that money in trust funds. Over the years or decades before the service is needed, those investments compound. By the time they actually provide the funeral, they’ve often earned more from investing the customer’s money than from the service itself.
It’s a business model that would make Warren Buffett proud—collect money today, invest it, and provide the service later with dollars that have grown in value.
Rollins: Making Pests Pay
Nobody wakes up excited about pest control, but that’s exactly why it works. When you’ve got termites eating your house or roaches in your restaurant, price becomes secondary to results.
Rollins has built a $3 billion empire on this simple truth. Their Orkin brand is synonymous with pest control in the same way Kleenex is with tissues. More importantly, pest control is inherently recurring—bugs don’t get the memo that they’ve been evicted.
With over 75% recurring revenue, Rollins enjoys the kind of predictable cash flow that keeps CEOs sleeping soundly at night.
The Art of Finding Hidden Gems
Spotting these opportunities requires a different lens than traditional stock analysis. Instead of looking for growth stories, you’re hunting for companies that have already solved the hard problem of sustainable profitability in markets others find too boring to enter.
Start with the financial statements. Look for companies in mundane industries posting surprisingly high margins year after year. Screen for businesses with massive “deferred revenue” or unusual liability structures that might indicate customer-funded operations.
Then dive into the 10-K filings. Search for phrases like “mission-critical,” “high switching costs,” or “fragmented market.” These are clues that you’ve found a company with genuine competitive advantages rather than just temporary success.
The best opportunities often hide behind balance sheet items that sound boring but represent powerful economic engines. That $16 billion “preneed backlog” on SCI’s books isn’t just an accounting entry—it’s a financial superpower.
Why This Matters More Than Ever
In a world obsessed with disruption and exponential growth, the companies quietly dominating boring industries offer something increasingly rare: predictability. While tech stocks swing wildly based on sentiment and speculation, these businesses generate cash flows as reliable as utility bills.
They’re not trying to change the world—they’re content profiting from its unchanging needs. People will always die, get into car accidents, deal with pests, and require government services. These certainties create investment opportunities that transcend economic cycles and market manias.
The Counterintuitive Truth About Wealth Creation
Perhaps the most profound insight from studying these companies is how they challenge our assumptions about business success. We’re conditioned to believe that innovation and disruption drive profits, but sometimes the biggest fortunes come from doing mundane things exceptionally well.
While entrepreneurs pitch investors on revolutionary technologies that might work, these boring businesses have already proven their models through decades of consistent execution. They’re not promising to change the world—they’re profiting from the world exactly as it is.
I think about my grandfather, who spent forty years as a small-town funeral director. He never got rich, but he understood something profound about human nature that these billion-dollar companies have scaled: people will always pay premium prices for services they desperately need but hope never to use. Sometimes the most boring businesses are the most beautiful investments.
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