Stock pickerÂ Nicholas Vardy, editor of Vardy’s Global Bull Market Alert,Â sees global megatrends as fundamental, secular shifts that last for years. Recognizing and investing in companies that benefit from these megatrends is one of the most exciting ways to profit from global markets, says Vardy. Fund managers call this style of investing “top Â down” investing. One big decision about the big picture trumps many small ones supported by complex whiz bang financial techniques.
Vardy’s #1 megatrend, which heÂ presented at the Money Show in Las Vegas last week, is the Global Cell Phone Revolution. Here’s how he describes it:
No technology has ever spread farther and faster than the cell phone. While it took television took 30 years to reach 70% of households, the cell phone achieved this level in less than a decade. While penetration have rates reached 80+ percent in the U.S. and 100%+ in markets like Scandinavia and Israel, they have barely hit 40% in Latin America, 15% in India, and 10% in many countries in Africa. But the growth is breathtaking. India adds 6.9 million subscribers -almost the population of Manhattan -every month. In the the developing world, cell phones are genuine drivers of economic growth. Harvard economist Robert Jensen recently calculated that every extra 10 percentage points of cell phone penetration leads to about .5% growth in GDP. Cell phones also appeal to the under 25 demographic that makes up the bulk developing economies’ populations. Finally, with voice, email, Internet access, cameras, and Mp3 players, cell phones have morphed into far more than voice communication devices.
He’s singing from my songbook. My only bone is that he misstates Robert Jensen’s study, which is actually the work of Leonard Waverman at the London Business School. Jensen’s work is outlined below in “Why fishermen (and fish eaters) like cell phones.” His linking of monthly sales in India to the population of Manhattan is a nice touch.