I don’t pay attention to my industry as much as my peers, mainly due to my complete indifference to the success or failures of others. But I came across this video, while reading Reformed Broker and it struck a cord. There wasn’t anything necessarily brilliant about this hour long analysis of the past 20 years of market fuckery. It was more of a fireside chat with someone who knows his shit. I’ve never heard of Passport Capital; but now that I am aware, I’ll be looking into his methods and philosophies.
The thing I liked most was how he was interested in “new things”. What’s new? It’s a very simple question. He talked about the dot coms, housing, China, commodities and how being early paid off.
Off the top of my head, there are several things today that are new.
1. Over 40% of our population is over the age of 45
2. Alternative forms of energy
3. Advances in medicine and medical instruments
4. Zero interest rate environment and negative rates abroad
5. Debt bubble
6. New forms of communication that has streamlined news and information
7. 3-D printing
8. Enhanced sensors on automobiles
The next step would be to consolidate these concepts into investable themes, trying hard not to denigrate ourselves through the purchase of early concept dice throws.
Feel free to chime in.
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One comment, admittedly without watching this yet: I think you have to be careful re survivorship bias. Sure, in retrospect those big / new themes were all big winners, but how many things that were heralded as the next big thing never panned out and have been largely forgotten?
How many themes turned into bubbles that blew up really badly (great for the ride up but hell was to pay if you didn’t know when to get out), such as China, emerging markets etc. (version 1.0)? Just food for thought.
All true. It’s just a light discussion.
Perhaps ETFs based on these investable themes to counter that risk? TAN for solar, HACK for security, ROBO for robotics, 3-D, etc.
Stem cell research.
Agree autonomous vehicles are/will be huge. Certain to wipe out the livery trade. There must be further disruptive effects of this seismic shift that haven’t been thought of yet.
Without having watched the video. That dude is a bear. Big time right now. Could be wrong.
Hmm. Maybe so. I found this recent interview of him, but you have to pay for it and I didn’t.
http://www.cnbc.com/2015/09/22/john-burbank-next-market-crisis-is-upon-us.html
The little free part sounded like he was expecting a downturn but did not say when. Could be 5 years from now, for all I know.
I didn’t know CNBC had a paid “pro” service that you pay for. I guess they have to make money somehow, since fewer people watch them on TV.
Oh, I see, someone found a free interview video with him below.
Tesla is the first company that comes to mind after reading that list.
Just finished watching the video from when reformed broker posted it. Glad I did. Some very good thoughts and discussion. He is making me re-think my international exposure in my 401k.
Wearables,
Drones
Alt energy – Specifically rooftop solar. This will reach a point where it is economical for businesses and consumers, we just aren’t there yet.
Battery Technology – If Elon can really crack the code of 35k vehicle with 250+ miles on a charge this will change the world
IMO
And hopefully we can come up with a new fracking technology to really piss off the Sierra Club
http://www.bloomberg.com/news/videos/b/3e653cc8-8995-42c4-983a-4876a71f4b03
Great video. I was wondering why Burbank was so bearish on commodities.
There’s going to be a mint made in tattoo removal one day. Believe that.
On the topic of new things, it is tough to tell which of a new industry will make it. There were about 30 major search engines before google became the hegemon. Same can be said with social media networks like Zynga, myspace, etc. Fun fact “Tom” sold myspace for $500mm. And now with twtr and facebook it seems like facebook is google and everything else is yahoo. In the future both Lyft and Uber will be going public and 20 years down the road the management team will be much more important than the idea with respect to the success of companies taking advantage of new ideas.
Robots. Driverless cars will be extra value added in terms of time spent doing other things
Yeah driverless cars will be great for your great grandchildren. Fucking trains still crash.
Can’t watch an hour long video as I have neither the bandwidth nor the patience. So I will merely note that negative interest rates, both here and abroad, are NOT the result of govt policy intent. They are the result of investors that would rather lose a little money in govt backed debt than lose a lot of money by staying in assets.
No bandwidth? Where the fuck do you live?
He couldn’t hear you over the modem.
Regarding the aging population and medical developments, and all related – healthcare is 20% of our GDP, heading up to 25%…yet the only thing you’ve ever talked about is biotech, which is pure dice rolling.
Look at the health IT firms, established ones like MCK, CERN, or newer ones like INOV.
Managed care is risky, but also growing massively – Medicare Advantage penetration is over 30%, up from 20% just a few years ago. The standard names like UNH, AET, and ANTM are already monsters and are just getting stronger. CNC is quietly building an empire.
Hospitals and other providers, while full of risks and ridiculous regulations, ultimately make money. HCA and CYH are bigger ones, but consider names like KND and SCI.
There’s plenty more out there.
Heard Burbank at a Grant’s conference in NYC, “The Mathematics of Democracy”, very interesting how little $ can swing things.
In the hills of Kentucky….got both satellite and Verizon wireless, but that’s still a fuckload of data. I’ll pass.
robotic, IA
I still like IBM
he is a partner in DeMark analytics, alongside Steve Cohen — fwiw.
Great stuff, Fly. Thanks for sharing. I would add Organic Foods and Real-Time Fitness/Wellness Monitoring.