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Wednesday, September 17, 2008

Hot investment trends of the future

There are ways and means to make money and investing that money well, is really both a science and an art. Ofcourse, investment gurus and market pundits talk about future trends that one must look out for - and for all our sakes – one hopes there is a measure of hard facts on which they are basing their figures, and it’s not just fanciful thinking.

As someone who has studied economics, I know that one must always fit the theory to the diagram to get sound results, and not manipulate the diagram to fit a preconceived theory. This, one hopes is the principle on which ‘future trends in investing’ are studied and put forth by experts.

But I think there are some trends, that will soon get noticed, and as someone who follows the financial world (and who has worked as a business journalist) with avidity, I’ve given these trends some thought. Though the picture is clear in my mind, I’ll explain my theories in a simple manner.

The three good future investment trends will be in the fields of corporate security, environment and education. I think the reasons will be obvious to most people.

1. Corporate security: Terrorism is here to stay and all countries in the sad, mad world we live in will be affected to some degree. Terrorists will take to destabilizing a country not by targeting nuclear and military assets but economic ones. This means, obviously, that Reliance may need to worry about its pipelines and its Jamnagar refinery. The Tata Group will need to worry about ports it builds and its other factories and hotel properties. Ditto for other industrialists. Similarly every mega - industrialist across the globe will be allocating resources toward protecting his assets….and that means eventually taking professional help.

So, any firm which comes into play to provide this kind of security (and I don’t mean just planting an emaciated watchman near the gate) but the real goods - complete with trained special forces type commandos, high on gadgets, expertise and courage – such a firm could list and mint money. Hi-tech security is the need of the future, and so far there’s no one whose come forward to fill this vacancy in India.

2. Environment: A company that makes the environment its unique selling proposition cannot lose. It’s not just Suzlon but anyone who works for this cause and corportises his/her effort will benefit. So, for instance, if someone produces gift articles from all those awful plastic bags that clog our gutters - and then retails it to Archies, Hallmark or any of our malls certainly deserves my money. A firm which takes to trading in carbon emissions is a good bet. If Greenpeace or a similar organisation lists on the stock exchange, they would get money to fight their many causes. And people who buy Greenpeace stock will have appeased their conscience!

3. Education: This is a win-win trend to watch out for. Education will always be in demand and the premier institutes in India should think of making the tax-paying citizens of the country, co-owners of their own future, Simply, because if I invest in an IIT or an IIM, I’m giving money toward bettering the productive pool of talent in India. Anyway, the last time I checked, I (and all of you who pay taxes and whose children don’t go to an IIM or an IIT) subsidise each student in these two institutes to the tune of Rs 4 lakhs! This figure does not consider today’s inflation and rupee depreciation.

I know purists will say that this is monetizing education, but my response is… so what? Since we are anyway paying for it, we might as well enjoy the returns. Why should this money disappear into the government’s deep throat pocket, where it will be used for yet another dubious scheme to appease a particular votebank around election time. By right, it was tax-payer money which engendered such centres of learning…and we should be allowed to reap the fruits as well.

In the future, I won’t be surprised to find that Mukesh Ambani has expanded and started a chain of world - class schools under the Dhirubhai Ambani Schools brand. He’ll even take this concept abroad to countries with significant NRI presence, so that those NRIs can enroll their children in schools which impart Indian values, teach Indian languages along with Spanish and German etc. Nothing like learning about India’s first battle of independence in 1857 while learning about the American war of independence in 1757..is there?

This is certainly one trend to watch out for that will keep everyone happy – Mukesh Ambani, the NRIs, the Indian government (because of foreign exchange they would earn), and me as a humble investor!

1 comment:

alok said...

Splendid post indeed manali ! As always u have put in lot of hard work in writing it.

I've known the points, bt never gave much thought to it!

keep posting!