How to Invest in Future Technologies Today – Introduction
About 20 years ago, a small company was founded to help people buy books online. The idea was very simple. Today, the company has changed the world by helping people buy everything and deliver it within a few hours. Its Amazon.
A few years later, three young men identified a problem sending money. They developed a platform to help people send money using email. Today, their small company – Paypal – has become the largest fintech company in the world.
At that time, a young man thought of getting rid of the combustion engine. He believed that the world would be better with electric vehicles. He worked hard and built an electric vehicle company. Today, the company – Tesla – is worth more than the decades old General Motors.
Last but not least, a young man saw an opportunity in the way movies and series were being distributed. He started a company that delivered these products over the internet and in a cheap way. Today, Netflix, is one of the largest entertainment companies in the world.
As an investor, it is very important to have the long-term view of the world and then buy companies that will be very relevant in the next ten and twenty years. All people who invested in the companies I have mentioned above are now wealthy people. This is because they had foresight of how the world would change in future.
The first thing you need to do is to sit back and reflect. In this reflection, you need to take time and look at everything that you use today. Then, go forward to the next ten years and imagine what will happen in the next ten years. For example, we all go to retail stores. What do you think will happen in the retail sector in the next ten years? First, the main reason why many people hate going to the retailers is the problem of queuing. To solve this problem, Amazon showcased a platform where you don’t need to que. All you need to do is enter a store, take your products and go. In the next ten years, the cashiers in the retailers will be non-existent.
A second way to look at it is to look at the manufacturing sector. One of the biggest costs here is human resources. To solve this problem, companies will need to invest in automation. Robots will be everywhere. They will replace humans in virtually all areas. Herein lies another opportunity for you to invest in. Buy companies that manufacture the robots and those that manufacture technology that powers the robots.
As I mentioned last week, you can invest in Tesla by investing in its suppliers. This is simply because Tesla is significantly overvalued company. However, some of its parts-suppliers are not overvalued. For example, I highlighted some of the biggest miners of lithium which is used in the manufacture of batteries. As an investor, you can reflect and find companies that manufacture things that will be used to power the future. For example, you can invest in a company like Alibaba which will (or is) being used to power global commerce in future. The company is also investing heavily in payments meaning that it could be a leading player in the payments industry too.
By having the insight to invest in companies that will power the future, you will be at a good position to make money as an investor (not as a trader).