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Identify Megatrends in Stocks
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Globalization
Globalization refers to commerce conducted without any geographical boundaries. It connects the people and business across the world that leads to economic integration. Technology is a major accelerator of this trend. Globalization get the companies the claim to fame, product branding, exposure of their business models. Companies working globally to render the services and products have the potential for huge profits. Globalization creates dynamic efficiency which lowers the cost of product & services due to rising competition and thus companies in the same sector with low-cost quality products with longer time earnings is a terrific investment.
Internet
Internet is a global network of computers and other electronic devices to access almost any information, to communicate, to send files by going online. The world is adopting the internet as fast as any other technology in the world. It took cell phones only 15 years after the commercialization of internet to be widely accepted by people, that’s the power of Internet industry (faster, better, cheaper). Internet has disrupted the traditional companies like education into online education, purchasing into E-commerce and this megatrend will impact many other industries in the future with the advancement in the technology. Investigate how the internet company which you have shortlisted will impact the business opportunities / how it will influence a traditional industry / accelerate the opportunities within it and you will be in a better position to catch the next potential winner.
Knowledge Economy
Knowledge economy means how the companies obtain, train & retain knowledge workers. In this Informative age where technology is the driver of the growth, human brain is its fuel. Knowledge workers forms the cornerstone of successful business by accelerating the growth of the business. Companies that focus on talent acquisition and retention are growing three to six times much faster as jobs economy-wide. Look for the companies that fits into knowledge economy and what it is doing to get best talented people in the marketplace is critical in finding the hot stock of tomorrow.
Demographics
Demographics is the statistical study based on factors such as age, gender, education, income, birth rates, population etc. Understanding demographics will give a predictable window for the future investment. For e.g.: An aging population will require health care, will travel more, plan for retirement whereas a large percent of women population in jobs will create a demand for baby care business accordingly. Look for the countries making legal and regulatory changes for migration, trade flow, capital flow which will drive the economic growth resulting in the companies established in that country to respond and grow quickly. Emerging demographic shift will prove disruptive to past legacies and wise investors will find huge opportunities to hunt the mega stock of tomorrow.
Convergence
Convergence means when two or more entities come together / join together / evolve into one for a business growth & development. For e.g.: Maruti Suzuki, Olectra-BYD etc. Convergence makes processes redundant and form completely new ones. The business entity will embrace change and will be open to new process / products. Convergence is all about wider collaborations, appreciating solutions and investors should look for companies with smart and integrated technology that will solve problem and deliver good ROI which is possible only through convergence. Thus, by analyzing how convergence will impact a particular company, an investor can find the big winners of tomorrow.