Transcript of Podcast:
If there is one question I would ask myself everyday, it is “Am I in tomorrow’s business”. I worry about the fate of many businesses given the way the world is moving. Automobiles, financial services, IT services, media, entertainment, energy, travel are some of the sectors that are undergoing or will undergo huge transformation in the years to come, displacing jobs and changing people’s lives in the future. This transformation is very relevant for entrepreneurs, salaried professionals and savers alike as it affects their future.
Entrepreneurs need to constantly check if their business is relevant tomorrow. Even if a business is doing well today, it could face disruption tomorrow and if entrepreneurs are not prepared for the disruption, they are at the risk of stagnation or even closure. Salaried professionals too need to evaluate whether the business they are working in will be relevant tomorrow as it could mean a lot to their job security.
Savers require to check if they are invested in stocks that are relevant tomorrow, as if not, their savings can stagnate or lose value.
Tomorrow could be tomorrow, day after, one year or many years down the line. Many times you hear that tomorrow’s businesses are some way off and things are not going to change overnight. However the question is, would you start a business today or join a business or invest in a business based on nothing is going to happen overnight even though there are clear signs of disruption happening down the line.
If you look around and see where most fresh investments are going, it is going to tomorrow’s businesses. Electric vehicles, self driving technology, robots, drones, artificial intelligence, augmented reality, robo advisors and money managers, ecommerce, renewable energy, online aggregators, streaming services are all seeing incrementally much higher investments than investments made in older businesses. Needless to say, more jobs are added in tomorrow’s businesses while jobs are being shed in older businesses.
It is never too early to invest in tomorrow’s business. If you do not invest, somebody else will. Sometimes it may take longer than expected to pay off or it may pay off very quickly but you need to stay the course if you can see the benefits in the future.
Apple started in the late 70’s, floundered in the 90’s but is now the most valuable company in the world and Steve Jobs vision made Apple what it is now. Warren Buffet singled out Jack Bogle, the ETF pioneer for savings billions of dollars for investors. ETF’s are seeing surge in flows at the expense of high cost active funds. ETF’s took a while to catch on as investors took time to realise that they did not benefit from high cost active funds, but once they spotted their mistake they rushed into ETF’s.
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