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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: James Strauss who wrote (38962)	4/14/2001 7:26:59 PM
From: IQBAL LATIF	Read Replies (3) \| Respond to of 50167

The Future trends! Where should your money be invested? The new way for future investments is 'Information and connectivity!' Iqbal Latif, 14 April 2001, Paris There is no easy answer to where to put one’s money for future investments? The answer is quite tricky. Yes, I know the short answer from many, who have seen the 'ups and downs' of the stock market in the recent past, would be 'cash is the king.' Hoarding cash and owning 'boring real estate' may be the best way to avoid worries and sleepless nights. Many would prefer that to every day anxiety that global stock market offer. Who wants additional worries of stock markets when challenge of daily living has become a high-pressure job? This is a world that has drastically changed its speed at which it operates. From a slow-lane living to a high-speed life on a major 'autobahn' all within these two last decades. This new fast world is led by 'information revolution', the backbone of which is the new technology. Over one-third of real GDP is now being driven by information technology and that number was calculated before the mapping of the Genome was added. In other words, we are in the earliest stages of a tech-driven boom yet to happen. This is the Middle Ages, and the Renaissance has yet to happen. Hold on now. Political economy and wealth creations for future have become quite inter-related phenomenon! To achieve the latter, the former has to be understood well. This information-led world has changed the dynamics of political events. Lets have a closer look before we proceed on where to invest your money in this volatile world. This is a world with open frontiers. Major disputes are now resolved by looking at the economic interests at stake. ‘Real Politics’ and big slogans have retreated in importance behind ‘political economy’ that governs the daily living of successful nations. One example was the recent standoff between China and US. Who would have ever guessed that a Republican President would handle the situation with so much restraint? Two or three decades ago such kind of disagreement with a communist government would have led to another Vietnam or the Cuban missile crisis. This shows how much prosperity depends on peaceful co-existence in the world. Behind this drama of ‘political slogans’ and ‘national sovereignty’ the standoff on the spy plane issue was resolved by basic principles of political economy. The main concern, other than political rhetoric, was the future of global trade. A protracted trade war would have cost US-China a cool 100 billion dollars in trade. The ideological rhetoric of communist China gave way to 'real' threats to its economic stability if US had proceeded with trade sanctions. The results of this would have disastrous consequences on Asian and Global stock markets. From 24-hours-opened global markets that never slept, now the new exposure to 'Global village' news brought about by 24-hour news channels like CNN and BBC, has led most of the world population that are awake to news breaks. In this new global investment culture all major news are local events as they impact our daily living. Geographical location is immaterial, you can be anywhere and if you were involved with any business or not you certainly would be impacted by the news of recent tensions between China-US and problems of Middle East. In this new world the worries of the entire world has become our worries whether we like it or not. The pace at which global integrated society will grow with all its diversity is going to increase at a far higher exponential rate due to the pace of the technological revolution. The nations and individuals that will not adjust their policies and their outlook to new realism would fade. Political economy dictates the prosperity of nations. Afghanistan is one good example. Within a decade, its ‘ideological isolation’ has brought misery that may lead to 1 million deaths by starvation in a country that was quite self-sufficient in food until 1978. ‘Connectivity and information’ for any one are the most important aspects of a new paradigm of global development. Everyone who is connected should try to become a part of this global economy by looking into leading technologies that are changing the way we live and operate. Cash and real-estate are good but only for 60% of your portfolios, in this world 15% of your net worth should be tied up with the fortunes and volatility of the new information-led economy. The tech sector is a long-term good investment. I have tried to make my case on broader trends that are leading us to that. For a short-term investor or for those who can't take the heat of the ups and daily downs, they should stop here. As my outlook on information economy is overly positive, I believe that the market will come back and hard, led by tech stocks. I am more a futurist. I look at emerging tech, markets and economies and try to make some sense about the market, so my perspective is different from those that work the investment houses. Here is what my 'guru' on Jag notes notice. With each trend he points towards the leading companies in that space. Less than 1% of all supply chains have been transformed the way they need to be to maximize efficiency and cost-effectiveness. See Ariba, Commerce One, Enron. As more digital stuff gets created more storage is needed. See EMC. Companies and entire industries are embracing business. Though corporate IT spending is down the immense investment in IT will payoff. See Microsoft, IBM, GE. Networks and Internet-enabling services are saving companies billions. See Cisco, Nortel. 75% of the world has yet to make their first phone call. See Cisco, Global Crossing. Chips are being embedded in everything everywhere. See Digital River, Intel, TI. The Post-Genomic Society is before us led by the mapping of the Genome. Human enhancement is the next Big Market. See Celera, Millennium, Amgen. Databases are where industry will keep and mine their knowledge assets. See Oracle. Entertainment, as the Net converges with the TV, Phone, Computer, will be a huge market. See AOL Time Warner, Sony. NextGen Telecom, from wireless to optics, to building Voice Net Portals will be Huge. See JDSU, Agilent. If you want to place safe bets, jump on banking and insurance. However, hi tech is where the big growth over the long term will be. As a futurist and an eternal optimist on peaceful nature of this global transition and emergence of lesser peace, I would think that real investment in this age would be in companies that will change the world forever, as we know it, it is happening right in front of us. The decision is ours if we want to be a part of that big change. The hard part is the effort of being a part of this revolution. It is not to invest blindly in dot coms and Internet. The investors who did that at the peak now realize that there is no easy money; easy money is easily lost, the real game is to know and invest in the right companies the future MSFT’s and CISCO’s from the ashes of today’s market. That is a difficult game. Many an individual and institutions learnt it the hard way unfortunately. Last year this time was the time to sell these techs, but now this is the time to search for future gems.