Technology can transform markets. Simply put, the Technology Trend is how new information, medical treatments, scientific innovations, and progress in society revolutionize products, and therefore, businesses and ultimately economies. Technology’s influence can be seen in virtually every company on the planet – whether it’s helped it or diminished it, ruined it or made it a leader in the industry.
For example, Apple stock closed at $16.30 per share on June 29, 2007, the day of the iPhone launch. On October 5, 2015, it closed at $110.72, a 579% gain. Tesla is up 817% since August 2012, when the company announced the construction of an advanced network of “supercharging” stations for its new Model S cars. More recently, SolarCity stock jumped 17% in late September 2015 when the company unveiled the world’s most efficient solar rooftop panel, dethroning SunPower’s SPWR X-Series modules for the title.
Other times, the Technology Trend creates new markets rather than transforming existing ones. The cloud computing market, which traces its origins to 1999, is forecast to total $127 billion by 2017, according to Global Industry Analysts. That’s up 2,440% from the $5 billion market that existed in 2008, and it’s been a bonanza for industry leaders, like Amazon with 30% market share (up 610% since 2008) or even Salesforce.com Inc., which commands just 4% market share but is still up more than 1,600% since its IPO in 2004.
3D printing is another example of a new market brought on by Technology. The 3D printing industry is projected to grow from $1.1 billion in 2009 to $6.2 billion in 2019 – and companies that have harnessed this part of the Technology Trend have thrived accordingly. 3D Systems Corporation is up 453% since 2009, outperforming the Dow by more than two-to-one, for example.
Most people are aware of how technology powers some new businesses and ruins others. But most investors don’t understand how to play this Trend because they’re all too often chasing the existing markets, rather than the markets that will be on the rise tomorrow.
The fact is, many mature technology companies offer a blue chip combination of growth and safety. Their year-over-year growth may have moderated from their heady early days, but they still offer market-beating gains with less risk than their smaller cap brethren.
As such, they’re today’s version of the “Nifty Fifty” stocks that our fathers advised us to buy and hold – the 50 most popular large and mid-cap companies that seemed infallible over the long term during the 1960s and 1970s – the last gasp of the “buy and hold” era.
For example, I love that Apple Inc. (NasdaqGS:AAPL) is making automakers nervous with its plan for a driverless car, because it’s the kind of creative destruction that can redefine an industry.
Meanwhile, GoPro Inc. (NasdaqGS:GPRO) is on the wrong side of this trend. New Chinese alternatives are causing investors to rethink the possible and the obvious. GPRO stock has dropped to levels it hasn’t seen since soon after its IPO and will drop further.
Now, Apple has appreciated by well over 1,000% over the last decade, which proves that you don’t need to find obscure companies with earth-shattering technologies about to go mainstream in order to bank enormous profits. But that certainly helps.
Read more at: http://Blogging.withDrDavid.com
Free e-Book & Consultation:
Please enter your best email to receive Free e-Book and Consultation to help you solve your life problems and answer your questions.
No comments yet