Disruptions Coming Our Way.pdf (2.4 MB)
My main presentation was on disruptions from technology. Being from the tech industry, this is a topic which is very close to my heart. I enjoy following new tech and new tech businesses. Wearing my investor hat, it is also wonderful to evaluate businesses which may be benefiting from tech upheavals.
What tech disruptions basically implies is, it impacts the terminal value of an investment. If you think of the value of a business, it is the sum total of all cashflows from now till eternity. Now if a business is severely disrupted, the terminal value of perpetuity goes down to zero (0). In a DCF, the terminal value is what derives the majority of the current value - sometimes 80-90% of it. So, if the TV goes down to zero, we need to question the overall valuation we are willing to pay for such businesses.
On the other hand, I also argue that in most circumstances, disruptions are relatively slow (from an investment perspective) and investors do get a chance to react. For example, Kodak did not get wiped out overnight, it took years for that to happen. So, it’s important to be aware of change but not get swayed by it. Its important to understand the scale and impact of change before reacting.
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Very interesting post. Thank you for posting such an informative PDF
went through the pdf.
Allmost all the new disruptive technologies are coming from startups. It is very difficult for an average retail investor to invest in any of the promising startups. Be it blockchain tech, IOT, werables, 3D printing etc.
But what caught my attention was regarding Veggie meat. I was allways thinking about this. I had done some cooking experiments by replacing meat with deoiled soycakes in cutlets, patties, burgers etc. and the result was awesome. I prepare these items for my kids snacks as a healthy option. I was allways wondoring that why the deoiled soy cakes which are a very good source of protien is ignored despite being so cheap. May be because of the special taste and odour. It has to be heavily spiced to overcome that taste and odour. If this can be removed by some way, which i think is quite possible by good R&D work by the soy processing companies, the deoiled soy cakes will catch attention from consumers. Also this is not a glamourised product and if this is getting branded and glamourised, it will surely catch the fancy of market being a healthy option to replace meat.
So this will be a new opportunity for soy proccessing companies.
(disc: invested in some soy processing companies in small qty)
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Fantastic presentation and well explained for a lay person. Too much change too soon is painful. These disruptions do not need capital unlike disruptions at a similar time last century. Buffett mentioned that the FAANGs (Facebook, Amazon,Apple, Netflix,Google)all operate negative working capital or need no capital.
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