These 3 “Megatrends” Will Shape the Next Decade

Imaging buying Apple in 1980…

Easier said than done, I know. But hear me out.

Today, a small $100 investment in Apple would be valued at over $75,000.

Now imagine investing in Amazon back in the late 1990s…

Today, a small $100 investment would be valued at over $120,000.

Or how about if you bought Bitcoin back in 2009…

A small $100 investment would today be valued at over $12 million.

Clearly, all three of these are nothing short of life-changing gains.

But how do you spot the next big winning investment?

Today we discuss.

Now, I’m certainly not saying that banking a 75,000% return on Apple… a 120,000% return on Amazon… or a 12 million percent return on Bitcoin is at all easy.

Heck, the majority of Americans hadn’t even heard of Apple back in 1980, let alone used one of their products. Amazon in 1997 only sold books. And Bitcoin… What’s that again?

However, what I am saying is that getting in on at least a piece of the action is doable. You just need to follow the megatrends.

That’s right. I don’t expect you to know the next trillion-dollar company decades before they ever hit that mark. And I definitely don’t expect you to know which cryptocurrency will skyrocket next.

What I do expect from you is the ability to spot the trends that these companies (and Bitcoin) benefit from and to be able to place strategic bets if you have the means to do so.

Megatrend (noun): a shift in behavior or attitude that has global impact and crosses multiple industries. In a rapidly changing global environment, megatrend analysis is critical for investors seeking profit from the next wave of sustainable growth as new ideas emerge and disrupt the status quo.

When it comes to Apple, the megatrend that they benefited from most would have to be the rise of personal computing. In 1980 less than 5% of U.S. households owned a computer. Now, odds are everyone in your household owns 2-3 devices that fall under the “personal computer” category.

In addition, Amazon’s megatrend is clearly e-commerce. And Bitcoin’s rise — love it or hate it — stems from the growing desire for a decentralized currency.

These megatrends are much, much easier to spot than the individual companies that go on to be the dominant players.

And it’s important to realize — it’s not just these “dominant players” that produce the big returns for investors!

All megatrends give rise to a host of connected industries and companies. Think of the countless silicon chip manufacturers… internet companies… and other cryptocurrencies that produced outrageous gains — I’m talking thousands of percentage points — as their megatrends took shape.

Micron, Intel, AMD, Google, AT&T, IBM, Cisco, Jabil, Oracle, HP, Microsoft, eBay, Ripple and Ethereum are just a few that come to mind. And I guarantee there are hundreds more.

Which brings me back to “strategic bets.”

You clearly don’t need to hit the bulls-eye when it comes to megatrends.

Merely placing a few bets on companies that have a niche, a head start, or even a good management team in a soon-to-be booming industry can be a great start towards cashing in on a megatrend winner.

That’s actually why I chose small $100 investments as my starting point for buying Apple, Amazon and Bitcoin above.

For most people, $100 won’t break the bank. And cashing in on just one megatrend winner could easily pay for the rest of your investments that don’t pan out.

In short, finding the next multi-thousand percent stock gain is doable. You just need to place a few strategic bets on the megatrends happening before your eyes.

To help get you started, here’s a few megatrends we here at Money & Credit are seeing in today’s market. All of which are still in the early phases.

Megatrend #1: 5G — If companies like Apple started the personal computer revolution, 5G is here to take that technology to the next level. 5G will elevate the speed and reliability of mobile networks to not only interconnect people, but also interconnect and control machines, objects, and devices.

Because the speed of 5G networks compared to the current 4G standard, unlocking the full potential of technologies like real-time augmented reality, self-driving cars and computer-assisted surgery will finally be possible.

And talk about a megatrend… IHS Markit has said 5G is going to generate a $12.3 trillion increase in revenue globally over the next decade and a half. And I guarantee those revenues aren’t all flowing to just a few companies…

Megatrend #2: Going Green — Let me ask you a question. Do you know who the largest solar panel producer is in the world? It’s a company called JinkoSolar (JKS) — headquartered in China. Close on their heels are other publicly traded companies First Solar (FSLR), Canadian Solar (CSIQ) and Vivint Solar (VSLR).

Now let me ask you another question. With the climate goals set forth by the Paris Climate Agreement and the environmentally-friendly attitudes of younger generations, do you think the demand for solar panels — and other green technologies for that matter — will be higher in 2030 than it is now? Undoubtedly, this megatrend is another great area to place a few strategic bets.

Megatrend #3: Changing Demographics — As technology advances, people are living and working longer, causing the world’s population to grow exponentially. This is leading to older populations and the rise of megacities — characterized as cities with more than 10 million people. According to Wired, within a decade there are estimated to be nearly 50 of these cities worldwide.1

From real estate, to healthcare to infrastructure, there seems to be no shortage of investable ideas for this megatrend.

For more insights into the trends that will shape our future, stick with Money & Credit over the next few days as we begin sharing insights from our tripthis week to the Consumer Electronics Show (CES) in Las Vegas.

Companies like Samsung, Delta Airlines, Amazon, P&G, Daimler and more will be in attendance. And who knows… maybe the next Apple will be there too.

Davis Ruzicka

Davis Ruzicka
Managing Editor, The Daily Edge
EdgeFeedback@StPaulResearch.com

1 Megatrends: exploring the forces that will shape us, and our world, Wired

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Davis Ruzicka

Davis Ruzicka is the Managing Editor of The Daily Edge. Davis is an experienced value investor with a degree in Finance from The University of Maryland. Today, Davis is pursuing his Chartered Financial Analyst (CFA) designation in his spare time while continuing to learn from seasoned investors Zach Scheidt and Alan Knuckman.

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