The Perfect Storm of Investment Theses
by Mr JugglesWe are currently in the Perfect Storm of Perfect Storms. This has caused great loss in our imaginary investment portfolio on the gains we had generated by shorting mortgage-backed securities. The only way to counter a Perfect Storm of Perfect Storms is with the Perfect Storm of Investment Theses. Luckily, we have found it: The Four S
We have identified four trends that all start with S. They are also all compelling investment opportunities. Combined, they form the Perfect Storm Investment Thesis.
- Solar power
- Smartphones
- Software…
- …as a Service
Many people correctly believe that:
- In the future, solar power will be the primary source of energy for the world economy. This power will be free, plentiful, and have no environmental impact. Except the unknown impact that results from taking massive amounts of energy that normally would have hit the Earth and shunting it into our cars and smartphones, and the related waste from producing solar paneling on an industrial scale, but other than that, we can assure there will be no environmental impact. As a side benefit, Al Gore will finally shut his piehole, since he will have made his billions from his green portfolio, you know, the book he talks everytime he opens his mouth.
- Smartphones will achieve 207% penetration as most consumers choose to carry more than one smartphone in order to make themselves smarter. Smart people know that it is important to have a persistent buffer from the place you are actually in. That is to say, if I’m driving, I’d be better off talking to Sarah. If I’m on a date with Sarah, I’d probably be better off talking on the phone with Sonya. And if I’m at Sonya’s apartment watching Mad Men in the nude, I’d be better off playing the newest cool iPhone game. Smart people know this is the whole point of smartphones. Apple will have 35% share, RIMM will have 30% share, Palm will have 25% share, and Nokia will continue to be the market share leader with 40% (See, they’re all winners!)
- No one will use antiquated sales programs like Siebel. Everyone will use online, automated sales programs like Salesforce.com and Google Adwords. All sales will take place online. Brick & Mortar stores will be converted en masse into sales kiosk repositories and/or expensive condominiums communities where everyone feels like they know everyone else but in reality are too busy doing something with their smartphone to know anything about the people who breathe the same air as they do.
However, using our superior intellects, we realize all of this will converge. In the future, software as a service tools will be the exclusive sales channel for solar-powered smartphones. We expect they will be able to run all the most important applications including Call of Duty 8, Microsoft Excel, and YouTube. Additionally, by 2012 they will achieve grid parity pricing and begin contributing energy back to the grid. We calculate the total market size for this trend at $8 trillion.
Recommendation: Software as a Service Solar Smartphones will stave off the Perfect Storm of Perfect Storms.
Related Reseach:
And how does this correspond to your cephalopod index recommendation? Does your 200%+ penetration rate account for the fact that Octopi and Squids can operate up to eight smart phones?
Good start, a bit old school thought pattern but still a good Start.
The true opportunities lie in:
– web ware and networked technology
– water and wind beyond the solar (solar primarily in storage, PV storage and conversion)
– networked technology and the touching that smart phones can do and the tracking of those
– the service aspect of things is focused on process improvements and removal of legacy systems in lieu of integrated processes and server based systems that allow for quicker and more pleasant service staff catering to the needs of the consumer NOW.
Removal or lessening of stress of the work force and recognition of the front line is vital as well, think of the Starbucks “third place” culture in the office environment.
You need to synergise (hey another s) this idea with the remunerative powers of the “OO” to get:
sOOlar pOOwered smart phOOnes sOOftware
————-as a service————–
@ Strattie
We’ve been promised that nonsense for what, 10-20 years now, yet banks still close at 4 and I can’t electronically transfer funds online in real-time.
This is not so much because no-one wants to work 24/7, but because the legacy systems all run on mainframes and processes are batched overnight.
Large financial services co’s (take C, JPM, etc) would all need to spend billions upon billions in capital projects not so much on the hardware/software, but on the data migration and systems integration.
As an astute customer, the limitations of your service providers’ IT are often readily apparent, but I have seen it from the inside, and its much, much worse than I could have ever imagined.
@ A
JPM is actually not too bad. They have been doing systems improvements in this direction. Juniper Bank was developed with that model. ING Direct’s system is more networked servers based. MBNA was pretty far along with that as well, unfortunately when they got swallowed by BoA and the operations focus shifted. Bigger is not always better 🙂 But Paul Graham is working hard to get everyone on the server side ware board, bless his soul.
On the upside. Most of the things I listed have viable, working models that we can benchmark around the world. America is sooooooo behind in many respects. But what we do best is steal or buy intelligence and models from other countries… so all hope is not lost.
@ Strattie
Fair enough (esp the last paragraph).
Unfortunately (fortunately?) American consumers/businesses have been conditioned over the past 10-20 or so years to expect little in terms of service.
While the astute busines may immediately realize the business case for providing superior service (made possible by better IT, processes, etc), most firms will likely benchmark against other mediocre firms, creating a feedback loop of mediocrity.
This, of course, isn’t anything new, just saying…
Actually there are banks that let you transfer funds (intra-bank and same owner) almost in real time, but my biggest question is, why aren’t ATM’s around the world as evolved as the ones we have in my country (my objective here is not, like many users do, to start a conversion over which country is the best, has the largest number of ice-cream flavors, or has the largest number of chimney cleaners…), the fact is theat I’ve been in a few countries and the atm’s are just like an old atari… Here we can buy train tickets, make bank transfers, buy concert tickets, pay bills, put cash on cell phones, and even widraw cash… all this for free…
I’m just curious how this business strategy incorporates China.
I hear there are a billion people in China and that they all want to get smarter by spending their savings on solar smartphone services.
And what about the smart emirs from the Gulf! They have lots of sun…
What was that you said? Sorry, I was busy downloading porn on my Smartphone.
My recommendation: Long John Silver, Viagra, Scotch and Rohypnol. (Diageo – DEO – holds its value okay). Short anything that doesn’t rely on human corruption for a profit. That company that claims to be ready to turn a profit selling E-books of the bible? You may want to consider selling that… last year.
@ Pleb
Is there any well-liquor ETF you know of? I’d like to long the piss out of that (quasi-pun quasi-unintended)
Interesting analysis, as we enter a bear market we need to continue to find other ways to make money, i dont think anyone will buy my Synthetic CDOs anymore. I love this article on bear markets here. Are you guys involved with this also? http://darthbeta.typepad.com/blog/2008/10/bear-market-may.html