The pagans who continued to practice their pagan worship were in for a surprise. In a short span of roughly 50 years, the pagan cult went from being the official Roman religion to becoming nearly wiped out. It is easy to deny the trend, but the consequences could be grave. This is the same way with investing. Once every few decades, a breakthrough in technology or human thinking would change the way the world operates. If you invest in the right companies at the right time, you're in for a ride of your life!
Another more recent megatrend is that of the personal computer. Who is the richest man on Earth right now? None other than Microsoft founder Bill Gates! Split adjusted, Microsoft (Ticker: MSFT) IPOed at roughly $0.10. Even after 10 years of lackluster performance, the stock sits at $35, which is 350 times the initial stock price! If you had put $10K into MSFT in 1986, you would be sitting on $3.5 million by now. In fact, in 2000, you would have had $4.6 million! 46000% return in a mere 14 years is not bad at all! That's approximately 55% return annually!
To ignore the megatrend is to ignore super returns! The good thing about megatrends is that they are easy to spot!
Megatrends of the Future
So, let's look for megatrends of the future! How do we exactly do that? Well, it's actually quite simple in my opinion. It is looking for something that is inevitable and most of the time, it's actually quite obvious. I'm sure that 30 years ago, everyone knew that computers would eventually replace the typewrite. It was just a matter of time. So, ask yourself, what is inevitable?
Jim Cramer has been saying this for some time and this megatrend has just started materializing. He calls it the "Mobile Internet Tsunami". It's all about smartphones. In my previous post on Google, I had already talked about their Android smartphone OS. 5 years from now, all of our cellphones will be smartphones, enabling us to talk on the phone, text message, surf the web, do work, watch TV, listen to music all on the same device. This megatrend is easier to spot because it has already started to occur. The Apple iPhone was the first device to bring awareness to the general public. It is only a matter of time when the iPhone like devices become commonplace. Cramer suggests investing in Apple (ticker: AAPL), RIM (ticker: RIMM), Google (ticker: GOOG), Qualcomm (ticker: QCOM), etc.
Another favourite trend of mine is robotics (obviously not because I did my master's in robotics and I work for an automation company!). This is another megatrend, but I think we're at least 10-20 years from the beginnings of that, perhaps even more. This change, also, will be inevitable. One day, we will all have a robot in each of our homes and we will no longer need to do chores like washing dishes, vacuuming, etc. Heck, we don't even need to vacuum now, with the Roomba robots roaming around! This megatrend I'm talking about is the proliferation of robots and automation in everyday life. Hints of that have already begun in a company called Intuitive Surgical (Ticker: ISRG). Surgeons can now perform surgery remotely by use of robotics using their technology. This is only a start. In another 10 or 20 years, watch for this trend to materialize!
I will admit: I don't know everything! :) There are probably some other megatrends that I have missed entirely, but not to worry, these trends are fairly obvious. I'm sure you'll be able to spot them when they arise. Until then, buy a smartphone and start googling for companies developing renewable energy and robotics!