I’ve noticed a common theme recently, which runs through both great companies and great investors. They have an extremely long term outlook.
Recently I was in San Francisco for GDC (Game Developer Conference) and probably one of my major takeaways was a common thread from several lectures I attended. Design games for the long term; and it seems that the companies who are more successful have a longer term outlook.
For example, Supercell (makers of the top grossing Clash of Clans), create games that can be played for a decade or more.
Chillingo, a big publisher, advised developer to create games that can be played for 5 years.
And the founder of Runaway (company behind games such as Flutter: Butterfly Sanctuary), said that when they create events in their game, they have a 2 to 3 year roadmap.
So, create games for the long term. Can we say that the longer term your outlook, the more successful you are? Dunno, maybe.
Now if we skip over to the field of investing, I think we can see a similar trend.
I haven’t had my ear to the ground so much recently, but I know that Warren Buffet looks for companies that would be going strong 100 years from now – he has an EXTREMELY long term outlook.
So… I was thinking. I agree with the general consensus that its worth investing in Index Funds that track the market performance (that’s also what Buffet recommends when asked what investing advice he’d give his family). That said, it is worth having maybe say 5% or so invested in individual stocks.
And what is something that has a long term life span?
So we come to the future…
Ray Kurzweil, the renowned futurist, has a decent argument that somewhere between 2040 and 2050 we will reach the Singularity, the point where Artifical Intelligence machines will be able to program themselves, which will send us into a new, exciting and maybe scary era that no one can foresee really what will happen after that point, since technology would have reached a tipping point that accelerates so quickly beyond human comprehension… He also argues that technology and computer chips are becoming exponentially smaller, to the point where (well before the Singularity, say in 2030 or so), nanobots as small as blood cells will swim through our blood stream and monitor our vitals, fight infections and all in all extend our lifespan as a species.
So, that’s a bit of an aside (I’ve been mulling over this quite a bit recently, the concepts he presents are fascinating).
But, the main factors that will drive this revolution:
- Artifical intelligence (software)
- Computer Chips
- Nanotechnology
With a quick Google Search and some filtering by me, here is a list of perhaps interesting companies to think about with a long term outlook (20-30 years)
Semiconductor Companies
- Intel (Div Yield ~3%, P/E 13.6)
- Taiwan Semiconductor Mfg. Co. Ltd. (Div Yield 2.7%, P/E 13.6) –
- From their Wikipedia entry – “Most of the leading fabless semiconductor companies such as Apple Inc., Qualcomm, NVIDIA, Advanced Micro Devices, MediaTek, Marvell,STMicroelectronics and Broadcom are customers of TSMC, as well as emerging players such as Spreadtrum, AppliedMicro, Allwinner Technology andHiSilicon,[8] and many smaller companies.”
Here are a couple of good Wikipedia entries about Semiconductor Manufacturers:
https://en.wikipedia.org/wiki/Semiconductor_sales_leaders_by_year
https://en.wikipedia.org/wiki/Foundry_model
It could be interesting to delve further into the semiconductor chip component and to see if there are other interesting investment opportunies / monopolies further down the supply chain (good place to start might be Intel’s Suppliers list… http://electroiq.com/blog/2012/04/intel-top-suppliers-2011/ and https://newsroom.intel.com/news-releases/intel-honors-21-companies-with-preferred-quality-supplier-and-achievement-awards/). Also this wikipedia entry on “silicon producers” can be interesting.
More reading on semiconductor industry:
Artificial Intelligence Companies
- IBM
More Reading:
http://www.businessinsider.com/artificial-intelligence-how-to-invest-2015-2
