Remember to check your inbox this afternoon.
That’s when I’ll send you part one of a three part video series where I interview our new technology analyst, Sam Volkering.
In part one of this three-part series, Sam and I discuss some of the key revolutionary (and profitable) trends of the next 20 years.
These trends will change the way we live, work and communicate. And it’s within these trends that you’ll find the most innovative businesses!
I can’t adequately explain how excited we are about this project. It could be the greatest opportunity of my almost 20-year investment career.
Most importantly, it’s something I’m convinced will radically change where you invest and the kind of returns you make in the years to come. In short, despite all the negative news, it’s a great time to be an investor.
Look out for the email this afternoon. Until then, on with today’s Money Morning…
In the middle of last year we compiled a list of five beaten-down Aussie blue-chip stocks.
We said it was ridiculous that these firms – market leaders in their field – were trading at a huge discount to their peak levels.
They were (and still are) sustainable businesses with strong cash flows that should weather the current financial storm.
One of those companies is Qantas Airways Ltd [ASX: QAN].
This is a company we put on the junk pile a couple of years previously. But like one of the other stocks (Harvey Norman Ltd [ASX: HVN]), when the stock price fell so low, we took it out of the junk pile to give it a second chance.
The price gained 60% from that point until the market peaked in May.
But now with the stock market shedding 10% since May and Qantas shares down even further (-25%) we see the same kind of value in Qantas and other stocks as we did 12 months ago…
We know what you’re thinking. Didn’t we say to buy stocks two weeks ago when the S&P/ASX 200 index was at 5,000 points?
Yes, that’s right.
We said it was a great time to average in. We said you shouldn’t buy a full position because there was a chance the market could fall…but that there was also a chance the market could rise.
As it turns out the market has fallen. So now you should put the next part of your ‘averaging in’ strategy to work. That means adding to your position.
Of course, if you think there’s a chance the market could fall further, then you could hold off a while longer. If you do, that’s OK. If the market bounces and you missed the low point, at least you’ve already got some exposure.
Here’s our point – and we’ll keep making it until we’re blue in the face – you can’t afford to sit out this market completely.
Share prices always rise and fall. Sometimes they rise or fall for extended periods of time. What’s important is that you remember why you invest in the first place – to build wealth.
As we’ve said before, you can’t do that by keeping all your money in cash or gold. The best place to invest is in businesses, and especially innovative businesses…
to Sydney from Your Local Train Station
That’s why we mentioned Qantas. Not because Qantas is especially innovative, but because of the innovations happening in the aviation industry.
Two completely different aviation concepts caught our eye yesterday.
The first is the ‘Clip-Air’ project by the EPFL technical university in Lausanne. The simple idea is that cargo or passenger ‘pods’ could clip to a single wing structure, as in the diagram below:
These cargo or passenger ‘pods’ could be multi-use. For instance, let’s say you want to get from Melbourne to Sydney. You board a ‘pod’ train in South Yarra, it collects passengers on the way as it stops at Richmond, the CBD and Flemington. The ‘pod’ train continues to Melbourne Airport, where it goes straight to the runway and slips under the ‘Clip-Air’ wing.
Almost immediately (after receiving clearance by the automated air traffic control) the ‘Clip-Air’ plane takes off and lands at Sydney Airport an hour later.
Once there, the pod detaches from the wing straight on to rail tracks and takes passengers to their final destination.
Sound crazy? Maybe. But is it really any crazier than current modes of getting to and from an airport and flying between cities? This certainly strikes us as much more convenient and almost seamless.
The next concept is just as intriguing…
This one is developed by Airbus Industries:
Admittedly, the ability to see everything around you as you fly feels a little uncomfortable…especially if they take it one step further by having glass floors!
As the BBC technology website explains:
‘Inside the aircraft, Airbus engineers envisage new “zones” to replace the traditional seating, with “morphing” seats that are able to harvest energy from those sitting in them as well as change shape to fit the size of passengers.
‘At the front of the plane, the team suggested seating with integrated sensors that would be able to monitor health. And there could even be a gaming zone, where passengers could play virtual sports.
‘It was also suggested that instead of having small doors into the jet, as is currently the case, the planes of the future would have much wider entrances where people could leave their hand luggage.‘
But rather than us just telling you about it, you can check it out yourself by downloading for free ‘The Future by Airbus’ app from the iTunes Store.
Look, concepts are just that. They are a concept of what could happen in the future. But that isn’t always how things pan out. There’s a big distance between conceptual design and manufacturing reality.
Ideas dreamt up by a designer fiddling around with a software program may not be possible in the workshop. But that’s how innovations happen.
The innovators and entrepreneurs create the ideas, the engineers then create the reality.
But this is all part of the fun of forecasting future trends. You scour the market, study innovators and entrepreneurs, and then figure out which ideas and companies have the best chance of making it to the big time.
Like any investment, it comes with risks. Arguably the risks are the biggest when you’re trying to pick a trend and a company to profit from that trend.
But that’s why the returns can be so immense. The company that provides the market with the right product at the right time can make investors extraordinary returns.
It’s an exciting time to be in this market, and the technology sector in particular. That’s why we’re pouring so many resources into it. You’ll find out more in the first of the special three-part video series later this afternoon.
Cheers,
Kris
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