The place to be in the next twenty years is...

[Bushman]

I am interested what sectors investors see as leading growth over the next twenty years?

My keen interest is energy and soft commodities followed by hard commodities on the back of the once in an investment generation industrialisation and adoption of Western living standard of Chinindia. In particular, I am a long-term bull on:
1. Energy. Has to be a no brainer. Dwindling oil supply, no new major oilfields discovered for years, climate change (brown coal) is a classic pincer move for the old 'oil/coal' axis. In the short-term, oil companies could be an outperform due to supply shocks with the existing brown infrastracture taking a few more years to develop. In the medium term, uranium. For the long term, it is CSM, geothermal and one or two others that can provide base load power. Not sure about the future of transportation energy - hydrogen, electric?
2. Fertilizer needed to feed a population of 10billion on an ever dwindling bread basket.
3. Water technology - ditto above.
4. Green buildings, especially core property sectors (huge consumers of energy).

I can add more to the list but I would love to hear the thoughts of any futurists in the meantime. For instance, my interest has not been in technology but I am sure there is money to be made out of technological innovation especially in infrastructure, communication and medicine.

 

[Bushman]

Wow - this thread is a bit like a one armed man clapping. Not many futurists it would seem.

From a portfolio point of view, this NY Times article provides an interesting persepctive on the stocks vs bonds conundrum.

www.nytimes.com/2009/10/25/business/economy/25mark.html?partner=rss&emc=rss

To summarise the data, long dated bonds (either government or corporate) were the place to be over the last decade, with stocks and bonds neck-on-neck over a twenty year period.

Data (source is Morningstar)

10-year period (annualised returns):
Long-term gov't bonds 8% return
Long-term corporate bonds 7.8%
S&P 500 Stock Index -0.2%

20-year period:
Long-term gov't bonds 8.8% return
Long-term corporate bonds 8.3%
S&P 500 Stock Index 8.0%

So, when you take your investment advice, listen to Pimco rather than Goldman Sachs or Morgan Stanley. This makes sense as the bond guy is usually the most pessimistic man or woman in the room....and this was a good state of mind for the 'boom/bust' equities market of the last decade!



Source: Morningstar

 

[Wysiwyg]

In the medium term, uranium. For the long term, it is CSM, geothermal and one or two others that can provide base load power. Not sure about the future of transportation energy - hydrogen, electric?

I agree the big E, energy is most likely the sector to be in. Local and international government policy changes being the news to look out for.

 

[wildkactus]

agree with energy and commodities for the medium term,

but what I think will be a go would be any new or leading technologies in the sustainability area, ie any company making things that are not going to cost the earth! (pun intended)
as governments will change the rules sooner or later as they see this as a vote winning area.

happy trading

 

[sjx]

Biotechnology and Telecommunications.

 

[Sean K]

Plumbing, in Chindia.

 

[drillinto]

Commodities, Emerging Markets and Australia.

 

[Gurgler]

Went to listen to a futurist (Peter Ellyard) speak about Training for the future couple of months ago and one of the remarks he made was that many of the jobs required in 2030 haven't been created yet! (PPT pdf attached - heady stuff, 85 slides but some interesting mindset changes required)

Amongst other points are these (slide 83)

• Develop Industrial clusters which specialize in the chosen industrial future and which integrate research and development, community learning
  and business formation
• Attract entrepreneurs, expertise and investors with special knowledge of /interest in the chosen industrial future
• Promote leadership dedicated to realizing the sunrise (industrial future) rather than protecting the sunset (industrial past)

(There are a lot of politicians doing the latter i.e.protecting the sunset!)

All of which makes prediction difficult!

 

[Mofra]

Definately agree on energy - surprised nobody has mentioned healthcare as yet given the aging population and the higher community expectations when it comes to standard of living in retirement.

 

[prawn_86]

The biggest problem (imo) with trying to predict so far ahead (20 yrs) is trying to get the micro level right.

SUre, energy, healthcare and maybe a couple other sectors are no brainers, but trying to pick actual companies that will survive and prosper over that timeframe is a much more difficult task.

 

[jayinoz]

Give me's in my opinion are energy, commodities, biotech, healthcare, IT&T, media\entertainment\gambling, emerging economies and Aussie. The challenge is definately picking the right companies- history shows more so that a passionate driven leader or founder has a much better chance of success. Plus they need to choose the right industry at the right tiime- aka gates, buffet, jobs, etc. Maybe in hard commodities in Oz we could say Forest.

 

[Smurf1976]

With regard to energy, liquid fuels are where the real, difficult to overcome supply limits exist in the medium term. There just aren't too many new oil fields sitting around awaiting development no matter how much money anyone has to spend. That does imply rising oil prices assuming demand doesn't collapse.

 

[Bushman]

The biggest problem (imo) with trying to predict so far ahead (20 yrs) is trying to get the micro level right.

SUre, energy, healthcare and maybe a couple other sectors are no brainers, but trying to pick actual companies that will survive and prosper over that timeframe is a much more difficult task.

The old 'top down' or 'bottom up condundrum.

For me, get the sector right at the very least as you can always diversify your risk by spreading capital across a few likely players.

In terms of energy, the new technology that can deliver 'base load' power will be the winner IMO.

 

[jbocker]

Since the projection is twenty years then I would hazard to guess that the 'things' of the future (in the 20th year) havn't been thought of yet. Go back to the '80s (if you were born ) and if someone said "internet" or "web designer" to you, you would have thought they were talking about spiders!

...from the little I know I would guess Alternative Energy is a certainty, Carbon capturing and something called nanotechnology. This is the manufacturing of structures at the nano scale. Companies that successfully adopt some edge of nanotechnology in their applied fields will probably do verry well.

Maybe Mork from Ork was onto something ...Nano ...Nano..
(sorry another '80s thing - early Robin Williams on a TV series)

 

[jonojpsg]

With regard to energy, liquid fuels are where the real, difficult to overcome supply limits exist in the medium term. There just aren't too many new oil fields sitting around awaiting development no matter how much money anyone has to spend. That does imply rising oil prices assuming demand doesn't collapse.

Agreed Smurf - the convenience of transport and use of liquid fuels is what makes them so useful! In my mind, this makes H2 the main possibility as a future liquid fuel, since biofuels are going to take up too much valuable arable land which we'll need for food production and electric requires massive amounts of additional generation capacity to charge the transport fleet.

Potentially biofuels from a microbial perspective, eg modifying bacteria to produce combustible liquids?? So a combination of biotechnology and energy.

I like this thread

 

[jbocker]

Any more ideas out there?
I hear that there is nearly always a change in direction after a bust. So after the GFC, new industries will come to the fore. Some small caps transition (and survive) to become the future big businesses.

So what are the industries that will spawn these new companies. Anyone want suggest an 'out of the square' industry...

:robot2:

 

[Wysiwyg]

So what are the industries that will spawn these new companies. Anyone want suggest an 'out of the square' industry...

:robot2:

Might be worth watching those old science fiction movies for the imaginative technologies they have. Will population continue to grow exponentially and will the demand for non-core items grow too? What about subsections of essentials like food, warmth, cool, accommodation, clean land, clean water, clean air and natural surrounds.

 

[prana]

energy, water, food

 

[Bushman]

Any more ideas out there?
I hear that there is nearly always a change in direction after a bust. So after the GFC, new industries will come to the fore. Some small caps transition (and survive) to become the future big businesses.

So what are the industries that will spawn these new companies. Anyone want suggest an 'out of the square' industry...

:robot2:

nanotechnology.

 

[Taltan]

Good thread however the answers aren't easy in the 1960's & 1970's a lot of people were sure that buying arlines was a sure bet. Every transport technology prior to flight (trucking, shipping, railroad etc) was first used for passengers and then mainly for freight, many assumed the same would happen for airlines + people's want to fly and they would make fortunes.

Fast forward 30 years, mix in global warming, govt funding of competitors (Etihad), oil price rises and good theories have of often been proved wrong.

Looking ahead how can I know if in 20 years I'll be driving an oil fuelled car to work, an electric car to work or staying home to work cause my virtual office is just as efficient.

So whilst I agree on energy I think a better bet might be aged-care facilities. We know people will live longer and we know they will not want to die (as much as we know most predictions).

Along with that we will won't more drugs to take, again assuming we'll want to live longer and look better etc. The problem with the drug companies as mentioned before - picking the right one. I like most people within the financial sphere have relatively little idea on all things medical.