A doubtlessly worthwhile means of approaching the present bear market is to establish sectors and main gamers inside these sectors which are benefiting from constructive traits and structural progress.
Firms persevering with to submit robust leads to a downturn are sometimes strongly product-led with gross sales progress pushed by new product cycles in addition to a structural shift in patterns of client spending.
Simply witness the mushrooming gross sales of pill computer systems and good telephones and their purposes. For instance, Apple just lately bought 4 million iPhone 4S handsets over an preliminary three-day launch, twice the variety of iPhone 4 handsets bought over the corresponding interval.
Regardless of the present downturn, due to this fact, there are areas of main technological change and structural progress, which is able to proceed to supply buyers substantial potential upside even in essentially the most bearish market.
That is evident in many various sectors, corresponding to cellular telephony, web safety, on-line advertising and marketing and many others…
Markets and sectors could be ‘disrupted’ by breakthrough know-how, which occurs on a regular basis no matter growth and bust.
Simply witness the appearance of the ‘paperless workplace’ over the past decade. Doc administration entails changing paper paperwork into digital type, after which storing, retrieving and looking for items of data.
The potential value financial savings and returns are big by way of storage prices and retrieval.
Right here, there are regulatory drivers together with the Sarbanes-Oxley Act within the US in addition to freedom of data. More and more governments should make such info accessible by way of the Web, which signifies that paper paperwork should first be scanned in electronically and the data then managed by way of imaging, archiving and indexation.
This entire doc administration phenomenon has implications for storage, which appears set to proceed to develop as the quantity of latest digital info together with emails, digital recordsdata and pictures proliferate dramatically.
This creates progress for these within the knowledge storage enviornment in addition to service suppliers and integrators that assist the storage networks.
With the Digital Age effectively and actually upon us knowledge integrity and safety is changing into increasingly essential.
On-line procuring and cost purposes have mushroomed, which has spawned a small military of malicious hackers that have to be guarded in opposition to. The continuous combat in opposition to each cyber-crime and software program viruses is offering growth markets for these firms that fight them.
The Web is now all-pervasive. Voice over IP now permits phone calls to be made utilizing the Web, which yields substantial value financial savings in contrast with conventional circuit-switched phone networks. Video over IP is behind the digitization of closed circuit TV (CCTV) more and more used to fight crime on our streets.
In the meantime, our seeming insatiable urge for food for on-demand video companies, corresponding to motion pictures, signifies that many telecommunications companies are set to profit from the unfold of IPTV – a know-how which facilitates the published of TV and video on demand over the present copper wire phone community.
In the meantime, cell phone penetration continues to soar worldwide and appears set to rival and even surpass computer-based Web browsing.
The areas of cellular content material which were booming over current years embrace ringtones, wallpaper for cell phone screens, cellular video games, cellular playing, chat and relationship purposes, video clips (e.g. pop movies), music downloads and many others…
And, on high of all these technological developments driving progress it’s also possible to throw geography into the combo.
For instance, within the Far East, infrastructure knowledge centre capability presently lags the expansion in Web utilization. That is creating good progress alternatives for the build-out of knowledge centres in international locations, corresponding to India, Singapore digital marketing services and Malaysia.
India additionally has its personal Hindi-language based mostly movie trade aptly named Bollywood positioned in Mumbai, which is presently booming. In the meantime, on-line gaming is taking off in China.
Traders can goal this progress by rigorously choosing the shares of main gamers inside these industries.
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Nigel Milton has labored within the monetary companies and media sectors for over 20 years and is a recognised authority on Small Cap shares and shares within the UK. He has contributed to main UK funding publications together with Traders Chronicle and MoneyWeek and is a former editor of Investing for Development. He’s a contributor to the funding e-book “Enterprise Fashions” printed by Harriman Home, which the late legendary investor Sir John Templeton described as “exceptionally clear”.