WORLDVIEW: Think to avoid going on an investing fool’s errand

When John Naisbitt's book Megatrends was published in 1982, it arrived with the impact of a sledgehammer. Naisbitt, a clear-thinking Mormon from Utah, reached his conclusions by applying the science of content analysis – dusting off a playbook that helped the Allies win World War II..In the introduction to his masterpiece, Naisbitt explains that during the war, boffins in the US intelligence unit sourced and analysed Germany's local newspapers. By looking at diverse data like factory openings and closings; train schedules; local community war casualties and the like, they were able to build an accurate picture of what was really happening in the enemy camp..Naisbitt wrote that his book, which was published in 57 countries and sold 14m copies, was 12 years in the making. His conclusions were reached after applying the wartime approach, analysing two million articles published in hundreds of local US newspapers. His painstaking investigation helped him identify 10 Megatrends which have shaped our world for the last three decades..___STEADY_PAYWALL___.He concluded that unlike top-down fads, trends come from the bottom-up – and like horses, are easier to ride in the direction they are already going..The ultimate trend jockey is Jeff Bezos whose company Amazon IPO'd just over 20 years ago (15 May, 1997). Amazon's share price breached $1,000 for the first time yesterday. After adjusting for its three share splits, the stock has delivered owners a compounded annual growth rate of 35.6% – transforming an initial $1,000 investment in 1997 into $510,000 today..Bezos explained to shareholders in his latest annual letter that business success comes from identifying the megatrends and applying a laser focus on them. Technology has made these trends easy to identify – applying freely available now data delivered in seconds what Naisbitt took years to crunch..So what are today's big waves?.Bezos told his shareholders they are Artificial Intelligence and Machine Learning. Expanding on them soon brings you to disruptive conclusions like driverless, computerised vehicles replacing internal combustion engines; online shopping doing the same to retail outlets; preventative healthcare slashing the business of big pharma; small renewable energy units replacing giant electricity plants; blockchain in banks, exchanges and brokers..An uncertain future awaits us all. Especially those companies (and countries) whose future relies on an accurate reading of the megatrends. Many of them are like dinosaurs who ignore the approaching meteor and just keep on chewing the grass. Investing into such businesses, even though their stock may look cheap by historical standards, is a fool's errand in this transforming world.

WORLDVIEW: Think to avoid going on an investing fool’s errand

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