This month, Jason Weaver, discusses megatrends, the rules for megatrends and the implications of those today.
Megatrends
Megatrends are long term structural shifts that have irreversible consequences for the world around us. Identifying the potential for structural change and investing in expected transformations early can be a key driver for successful investing.
Examples of megatrends are:
Rise of Automobiles (early 20th Century)
Household Televisions (mid 20th Century)
Rise of Social Media/Facebook (21st Century)
Rules for Megatrends
1 ) Wait for Tomorrow. Waves of megatrends will usher in market leaders. Today’s leaders might not be the same as those in 20 years.
2 ) Connect the Value Chain. Think holistically across geographies and sectors. Take electric vehicles for example. Other sectors are the software, batteries, lithium miners and the charging infrastructure.
3 ) Think Beyond Borders. Many opportunities exist beyond the U.S. 90% of America is connected to the internet. Only 60% of China is connected to the internet.
Implications of those today
The five megatrends are all accelerating today and we expect them to be important drivers of corporate earnings and equity returns.
1 ) Economic Power:
China could become the new world superpower by 2030.
2 ) Demographics and Social Change:
The global population could increase by over 1 billion by 2030.
3 ) Rapid Urbanisation:
Space will become an issue in major cities.
66% of the world’s population will live in an urban area by 2050.
4 ) Technological Breakthrough:
2/3 of occupations could see 1/3 or more of their activities automated.
5 ) Climate Change and Resource Scarcity:
Crop failure, flooding, energy shortage, habitats destroyed and the average surface temperature continuing to rise.
Listen to our most recent conference call:
Monthly Conference Call Replays