1. China, India and other recently strong economies will continue to grow and gain momentum.
2. The best blue chip companies are not necessarily in the US anymore.
3. The world is becoming older and wealthier.
4. The future will have higher inflation that we have been accustomed.
5. The world will run out of cheap oil.
6. Commodities will become more expensive.
7. Food is the new Oil.
8. The state of the environment will continue to gain in importance.
9. New technological innovatoins will shift from information to energy, healthcare and the enviroment.
10. Countries and institutions with a higher stability premium will command higher returns.
These are the 10 trends in a nutshell proposed by Jim Jubak in his latest book, "Juback Picks". Whether or not you buy into his premises, I believe (like George Carlin and the 10 commandments), that these can be boiled down into a smaller set.
1. Globalization
2. Aging Demographics
3. Energy and Environment Crisis
4. Financial Volatility
Jubak takes an investment perspective on these trends. The concept is that you should research the trends, find companies that support those trends, determine which of those companies have the best fundamentals, then use technical indicators to guide entry and exit points for both the trends, sectors and individual investments. Makes sense, right? Easier said than done? Yes.
To his credit, Jubak ends each trend chapter with a list of trend breakers and makers for each category. This further underscores the complexity of validating and timing the trends outlined. This sounds fun as a full-time occupation, not so much if you have a day job that requires the same degree of attention, intention and research.
Nevertheless, the concept is sound and can perhaps be helpful to investors. It is also interesting to speculate on the 10 trends or my 4 reductions from other perspectives that include the sociological, psychological and scientific.
It might be fun (yes, depends on how much of a geek you are) to set up a framework for tracking these trends as an exercise in following world events. Sometimes just reading the news and watching history unfold can have such a reactionary flavor. We can easily get eye-glaze from sifting through the many headlines of information that bombard us every day. Might it be more interesting and more educational to follow world events with a particular orientation in mind? To some degree this could be automated. Maybe it has been automated already.
IOW, can I set up a tracking mechanism based on the trends of my choice where I (or my trusty robot) analyze unfolding world events, map them into the appropriate trend category and rate them based on how much they support or diminish the trend in question? This could be hooked up to a web-based dashboard displaying the trends and have a real-time display of the state of the trends to the day or hour depending on how fine a granularity is desired. Color-coding with white(lack of evidence), yellow (weak support), orange (medium support), green (strong support) could allow you to visit the site and, at a glance, see what the current state of the trends are.
Better yet, allow the addition of new trends as they become identified. This trend-tracker web site has to exist already. Surely it does in this day and age. I think I will look for it as soon as I finish this blog.
Whew... Back to the original idea for this blog, which was to do a mini-review of the Jubak book. Oh well, I have lost interest now. You can easily find a review for yourself in other places on the net including Amazon.
Now, off to see how many other people on the planet have already implemented this idea multiple times :) Update: Found one here. Not exactly what I was looking for, but I am sure there are tons more.
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