Much of my writing centers around technology and the opportunities presented. Of course, there is also a price to be paid for missing some of the shifts.
As anyone can guess, I am a big believer in the technological capabilities of both blockhchain and cryptocurrency. Both hold great promise for the future.
That said, we see a lot of situations where the reading of the tea leaves did not work out. Blockbuster was a top performing stock at one point in time. Kodak was at the top of its field for decades. Sears was the originator of the mail order business while having one of the most valuable retail locations in the world.
And what do they all have in common? They are not out, or basically out of business.
In other words, they missed the shift.
For Blockbuster, the move to streaming which Netflix positioned itself to take advantage of, did them in. Kodak believed itself to be a film company which means it is dead in a digital world. And Sears missed the shift towards online retail along with a host of other issues.
Often I write about potential disruptions because there are dozens of businesses sitting out there just like these three. We are seeing so much taking place that missing the shifts could be fatal to investors.
For example, what are your thoughts about ranching? Meat production is something that has not changed in thousands of years. Surely companies such as Purdue should be sound going forward.
I read a report, which I think is a bit aggressive, which shows the potential disruption. According to the report, it is believed that we will see a 70% reduction in cows by 2030 and 90% by 2035. The reason for this is advancements in bio-tech which is altering food production. This trend is expected to also be in the area of chicken and pig production.
Now, I believe we will see shifts in this sector, although I don't find the pace to be as they mention. Nevertheless, it does create a host of issues, especially for the 26% of the planet that depends upon agriculture. In other words, if this does unfold, it would be fatal to a country like Brazil.
AT&T use to be the largest provider of long-distance phone service. With the introduction of free long distance by mobile carriers coupled with businesses shifting to VoIP, we saw this business basically eliminated. Fortunately, for that company it was one of the original mobile carriers to build out nationwide coverage.
This is a prime example of a company that was able to transition.
Where will the cable television industry be in a decade? We know there is a great deal of change taking place in the entertainment business. At the same time, we see the potential for newer infrastructure with 5G and Satellite Internet. What impact will those two technologies have in a decade?
There was a time when IBM was the most powerful computer company in the world. In fact, I still recall the early days of the software industry where the term "IBM compatible" was part of the lingo. That did not last long after Microsoft got going.
As investors, I believe it is vital to look at technological trends and be mindful of what companies are facing. I can attest that we cannot expect people involved in an industry that is being disrupted to pick up on it. After a couple decades in the office equipment industry, I would say that maybe 5% of the people involved in that are aware of the threat it is under. Most, including those at the upper levels of management, have no clue.
When an industry like food production is suddenly under threat of massive change, it is time to accept that everything is subject to rapid disruption.
Remembering this could enable us to navigate away from some potential minefields while pushing us into some opportunities before they become obvious to everyone else.
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