What is Thematic Investing & Why It Beats Sector-Based Investing
Understanding the Ins and Outs of a Thematic Approach to Investing
We see Investment themes at work and at play everyday in the economy — oftentimes across industries and categories — and other aspects of day to day life.
It is the opposite of the typical Wall Street approach to research, which oftentimes overly focuses on a single industry at a time and results in missed opportunities.
These themes are identified by looking at the intersection of shifting economics, demographics, psychographics, technologies, mixed in with regulatory mandates and other forces. In other words, looking at the real world that companies are operating in!
Some businesses will adapt, while others will leap frog ahead riding these thematic tailwinds to profits and significant share price movements, and sadly there will be those left floundering too. For every Apple, there is a Palm and Blackberry. For every Facebook . . . a MySpace or Friendster. For every Netflix, there’s a Blockbuster. The list goes on and on, even in non-technology categories.
By examining these thematic tailwinds, our goal is to identify mispriced securities relative to the business opportunities ahead and avoid those that are overly valued and or staring down the barrel of significant headwinds.
Our Investment Themes
We are currently tracking the following 18 investment themes, or “thematics” as we refer to them
The needs and demands of the expanding, older population.
BIntellectual property, patent portfolios, licensing in and out business models.
Psychographic pains as consumer behavior shifts due to economic hardship
Scanning & Swiping through online and mobile shopping coupled with the growing pervasiveness of smartphones.
The intersection of computing, broadband, mobility and the Internet changing the way we live.
CONTENT IS KING
As eyeballs are pulled in more and more directions, it's the content producers that are winning.
Developers of the products, services and business models that are transforming how we do everything from shop, commute, travel, work, play, relax and even purchase energy.
Exploits companies whose business is poised to rebound as economic conditions heat up.
Capitalize on companies positioned to address the expanding waistline of the population.
FOOD WITH INTEGRITY
Consumer demand for healthy foods and their willingness to pay more for products that claim to boost health and weight loss or are all natural.
FOUNTAIN OF YOUTH
The products and services aging Baby-Boomers seek to hold off the aging process.
Those little treats and would-be harmless vices that we like or need to have from time to time.
RISE/FALL MIDDLE CLASS
The worldwide expanding new middle class spurs demand for goods and services that previously had not been available.
SAFETY & SECURITY
Personal, Corporate and Homeland Security, this theme revolves around increasingly on guard behaviors and need to shift from reactionary defense to always prepared and secure.
Companies positioned to benefit from a scarce resource or those that could see their margins and earnings come under pressure as key input prices escalate.
TOOLING & RETOOLING
The crosshairs of high under-employment and hiring managers that a can’t find qualified workers.
Those products and service that appeal to the expanding number of super wealthy throughout the world.