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For a Better Future, Think Like an Owner

For a Better Future, Think Like an Owner
Elena-Duvernay/Dreamstime

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Thursday, 26 October 2017 04:47 PM Current | Bio | Archive

Will our future be more like Star Trek, or Blade Runner?

One is an optimistic future where mankind explores the stars. Energy is near limitless, and can be converted into matter, making material needs easily fulfilled. The other is a bleak world of scarcity, where androids designed to do hard labor run amok in a teeming metropolis. (But hey, at least they dream of electric sheep.)

I’m an investor, so I think about the future a lot. When I think of mankind’s future, I see elements of both positive and negative developments. Yet when it comes down to it, I see the increasing importance of investing, because our future will be more bright than dark.

There’s no one secret to investment success. But there are ways to think about investing that can make a meaningful impact on how you invest and on the returns you can make.

I’ve found that some of my best opportunities come from thinking like an owner. After all, a share of stock is just a minute fraction of an entire business. Whether I own one share or all of them, I’m interested in how the company does going forward. So before I commit that first dollar into a company, I want to look at it in terms of whether or not I’d want to own the entire company, let alone any of it.

That’s led me to owning some great companies over the years. It could mean owning companies with strong brands like Google (GOOG), McDonald’s (MCD), and Disney (DIS). Sometimes it’s meant owning companies where the shares don’t reflect the full value of the company’s assets. That’s especially true of commodity names I’ve owned when they’ve been out of favor like Southern Copper (SCCO) and Chesapeake Energy (CHK).

While I’ve owned a variety of stocks across every sector at some point, I’ve always come in thinking like an owner. I’ve always wanted to get a good price—but not necessarily the best. Trying to time the absolute best price often means missing out on a great opportunity. I’ve always looked at the downside first too. I know that not every investment will work out. But nearly every company has to deal with some specific fear at some point that weighs on prices. If that fear is likely temporary, it may make an exceptional buy.

This ownership mentality is more important than ever. That’s because, no matter what happens politically or economically, society is being divided between owners and non-owners. And if you’re not in the ownership class going forward, you’re going to be in trouble.

To understand this future, we need to first think of our past. We’re only two or three generations away from a time when most people worked in agriculture, typically a family farm. The days were long and arduous, and crops often failed due to poor soil conditions or variations in the weather.

Those days are past. Less than 5 percent of the population in the United States works in agriculture today. That’s due to an increase in productivity. Crops are more resilient. We have powerful tools that have replaced human labor and beasts of burden to efficiently till the soil and collect harvests. There’s room for future improvements in this sector.

But that’s just one space. We’re on the cusp of some great technological changes that will forever impact how we think of labor. We’ll have an increasingly automated workforce that will eliminate the need for most physical human endeavors. While that’s great news for society as a whole, those with few skills will likely not be able to find high-paying jobs—if any. And as time goes on, those with skills will be increasingly obsolete as well.

Some see a danger in this future. I see challenges—but ones that can be overcome. After all, few, if any, would want to go back to a largely agrarian society where 12-hour days of backbreaking labor are the norm. With this new future will come new jobs, just as technological improvements that made farming more efficient also created opportunities in new industries as well.

New skills will need to be learned as these changes go on. The jobs of the past will be made obsolete either by automated labor or by the creation of new industries. And while a robot can do many things, it can only do what’s it’s programmed to do. It can’t think outside the box. There are huge opportunities for innovation as human labor is freed up. The challenge, however, is how much this disruption effects lower-skilled segments of the population.

That means there’s something more important than learning new skills. The real secret to benefit from this trend is to own a part of the future by investing in companies that are making it happen (whether you want it to or not).

One easy way to invest in this future is with Keyence Corporation (KYCCF). The company is a global leader in automated workforce solutions—i.e., creating robotic plants and factories with as few human components as possible. It’s got a great profit margin and growth levels—and best of all the company has zero debt and a healthy amount of cash on the balance sheet.

While shares are up 51 percent year-to-date, there’s more to run. That’s due to the company’s operations in this high-growth sector building the world of tomorrow. What’s more, Japanese stocks have a significant tailwind thanks to the re-election of Shinzo Abe, whose “Abenomics” is designed to spur inflation in the country’s moribund economy—which has already led to a powerful rally in Japanese stocks in recent years.

The divide between owners and non-owners will likely increase over time as technologies improve. It’s critical, more than ever, to be an investor and part of the owner class. Growing wealth will make all in society better off—after all, even today’s poor in the United States enjoy technology like air conditioning, and cell phones.

But why survive when you can thrive? Your future hasn’t been written yet. There’s no fate but what you make. It will be made off the foundation you build today. Build a good one for a great, big beautiful tomorrow.

Andrew Packer is a Senior Financial Editor with Newsmax Media. He currently writes the Insider Hotline investment advisory, serves as investment director for the Financial Braintrust, and writes the monthly newsletter Crisis Point Investor.

© 2019 Newsmax Finance. All rights reserved.

   
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AndrewPacker
Your future hasn’t been written yet. There’s no fate but what you make. It will be made off the foundation you build today. Build a good one for a great, big beautiful tomorrow.
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Thursday, 26 October 2017 04:47 PM
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