In an era of rapid technological evolution and shifting consumer behaviors, investing long term has never been more important. Capital Group’s portfolio manager Mark Casey reflects on the notion of “unstoppable” industry trends.
“Early in my career as an equity analyst covering newspapers and the internet, I learned a valuable lesson.
I got an up close view of how newspapers — a once dominant media business — lost their edge to online advertising platforms like Craigslist and Zillow. A good chunk of the industry overlooked the looming disruption. I quickly learned the importance of identifying unstoppable trends that could transform industries and investing in companies that seemed best positioned to benefit.
1. From unintelligent to intelligent systems
The introduction of ChatGPT in the fall of 2022 was a monumental step in the transition from unintelligent systems to intelligent systems. This change was recognizable almost immediately, as ChatGPT attracted one million users in a mere five days.
2. From cold hard cash to digital payments
The transition from the use of paper money, coins and checks to digital payment technology has been ongoing for several decades. PayPal, for example, introduced an online version of its payment technology in 1999 and released its mobile app nine years later.
3. From harmful tobacco to reduced harm nicotine
Not all unstoppable trends are based on digital innovation. According to the World Health Organization, about 1.3 billion people still smoke tobacco. They light tobacco leaves on fire and inhale the smoke to consume nicotine. But that nicotine comes with a payload of carbon monoxide and tar, which can cause cancer and other diseases that may shorten your life.
When I consider the unstoppable trends I have observed over my career, I have learned the key to investment success is to understand each new trend and how it will change the competitive landscape. After that, I try to identify the likely winners and losers.”
Click here to read the full article from Mark Casey at the Capital Group.
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