The post-PC revolution
At Montgomery we have several investment themes that influence our enthusiasm for an investment that meets all our other criteria.
These are:
• A domestic retail recovery
• The ageing baby boomers’ impact on spending trends, real estate and equity multiples
• The end of the resources boom and its impact on the federal finances, interest rates, commodity prices and companies exposed
• The internet of everything – the rapid increase in demand for speed, transport and storage
Within this last theme there is another theme; call it a ‘mini-theme’. There is a move afoot (which older investors – like us – find more difficult to identify or appreciate) to mobile engagement with all forms of communication and digital experience. Some see it as a fad but we believe business would be silly not to invest in mobile now.
The infographic below cobbles together data from a variety of sources to paint a picture of the world on the move.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Chris Delaney
:
Roger,
Is there a place for investing in somewhat ‘unknown’ businesses…. Or should I just go to the casino?
Roger Montgomery
:
Of course there is Chris. As always you need to be confident you understand the business, its prospects and its competitive environment. I have forwarded your Skaffold question to the Skaffold team on your behalf.
Ben Godfrey
:
I hear the words of Buffet ringing in my ears. I’m in my early 30’s and grew up with the internet. I’m also a big Buffet fan. I remember a lecture he gave to university students some time ago about the revolution of the car, the tv and the plane, his sentiments went something like this:
– It’s really difficult to pick a winner out of the myriad of firms trying to benefit from the next big thing. Hard to pick looking forward, easy to pick looking back.
– Some “revolutions” didn’t provide any significant returns to investors over the long run. And some are still wasting investor money – think airlines.
– It may have been better to short those companies dealing in what the next big this is going to replace.
Maybe I was born in the wrong generation – who knows…
scott.sier
:
I am always fascinated by the ever increasing statistical projections regarding the expansion of the internet’s role in the economy.
Which Australian companies stand to benefit from the expansion in the medium to long term.
Dennis Bergmans
:
On another point, I disagree with your ageing boomer hypothesis. The money does not just “disappear” from superannuation or investments, it is filtered back through the economy. It will change hands so that it ends up in someone else’s pocket. That someone else (a company or an individual) may spend it but eventually it will end up in the pocket of someone who will reinvest again.
Roger Montgomery
:
Great to hear your view Dennis. Different views are precisely what makes a market. Without a willing buyer we couldn’t sell and without a willing seller, we couldn’t buy.
Ian Hammond
:
The theme is not too difficult to spot. Who is going to make good money out of it and end up being a quality company with a competitive advantage … a little harder to work out, especially in such a fast evolving sector.
Roger Montgomery
:
Thats our job!!!
Dennis Bergmans
:
Regarding the PC/Internet/Mobile revolution – it reminds of many other various revolutions. Eg. The transition from horse and buggy to motor vehicle – which company will be the winner and which will be the loser? You know the industry is changing but who is going to make money out of it?
I prefer to take a leaf from Buffett’s book and steer clear of any “new revolution” because I can’t even guess where it will be in 2 years let alone 10 years.
Roger Montgomery
:
You might like to read the blog post on ‘game-changers’ http://rogermontgomery.com/what-is-a-game-changer/.
Andrew Legget
:
This is one area i have been watching, i like companies that have good “synergy” between their actual webpages and mobile technology as i think it is the obvious next step.
I can from my mobile, manage my finances, buy airline tickets which then appear in passbook which can be used as boarding passes by waving my mobile over the phone. The mobile phone is now the centre of everything, it is no longer a communication device, it is a personal organiser. it allows me to do almost anything i want that can be done electronically at any point in time in any place in the world. For example, transferring money from one account to another whilst sitting on a beach in Santorini.
The mobile phone is now a technological wallet, diary, personal organiser, communications device, internet device, retail super mall, entertainment device all in one.