Cheer Up! What will do well over the next few years?

[Holdfast]

In amongst all the economic doom & gloom, certain sectors of the economy will always do better than others. I'm curious; what bits of the economy will do relatively well over the coming years?

My votes: private security (including military contractors), high-end luxury, and big financials.

And yes, I've back up my feeling by significantly increasing my exposure to two of those sectors during the recent market falls.

If the thread gets interest, I'll go into my thinking about these sectors a bit more (esp. given the potentially counter-intuitive nature of at least one of those picks) but for now I'm just testing the waters to see if anyone else is interested in, and wants to chat about, this kind of thing here.

 

[auntiehill]

Hospitals, funeral homes, and hearing aids. People will always get sick and die, and given the huge numbers of people with headphones jammed in their ears today, hearing aids will be a HUGE business in the coming years.

 

[RoJoHen]

Rental Properties...because nobody is going to be able to buy a house anymore!

 

[Darth Duck]

Booze. Booze will always do well. So will illegal drugs. The shittier the world is the more people will want to get crunk.

 

[Haggis and tatties]

Small cars makers will boom as people ditch the big petrol guzzlers for something in the 1.1/1.2 engine size due to ever increasing prices in everything but a wage packet.

People are forced to become less wastful in all aspects of their lives, which is a good thing for all.

Elvis comes back.

 

[Holdfast]

Thanks for the replies so far; some interesting takes on the question!

Hospitals, funeral homes, and hearing aids. People will always get sick and die, and given the huge numbers of people with headphones jammed in their ears today, hearing aids will be a HUGE business in the coming years.

lol at the headphones comment. I never thought of that.

I think I'd agree that healthcare will continue to be a decent business to invest in. Regardless of who pays for it, the market is large and growing, and that means potentially good earnings growth. Profitability is also likely to be decent, given that people don't tend to be terribly objective on these matters.

Rental Properties...because nobody is going to be able to buy a house anymore!

100% agreed on this. I've already noticed it in my local area, when I re-let a property. Two applicants on day one, despite a rent increase. Could have probably asked even more and still let it out easily

The flip side is that capital growth in the value of the property itself is likely to be stagnant. But the yield should be good, and rising. Good for income.

Booze. Booze will always do well. So will illegal drugs. The shittier the world is the more people will want to get crunk.

I like your thinking. The only problem is that the drinks market is dominated by big players with little room for margins to rise. Volumes may well go up, but profitability may not, at least in the drinks market. However, in line with my earlier pick of luxury goods as a growth area, smaller & more elite beverage makers should do very well. For instance, check out top chateaux Bordeaux and Burgundy domaine prices. Soaring due to China getting interesting in wine.

Small cars makers will boom as people ditch the big petrol guzzlers for something in the 1.1/1.2 engine size due to ever increasing prices in everything but a wage packet.

The trouble I foresee with this as an investment would be that the profit on smaller cars are lower than on larger cars. And if what you say comes about, it will be difficult to see headline revenue growth given that car companies tend to sell a broad range of models. Cannabilism by the smaller car segment from larger cars might actually depress carmaker total revenue. Interesting angle, though.

Elvis comes back.

He never left.

 

[RoJoHen]

Rental Properties...because nobody is going to be able to buy a house anymore!

100% agreed on this. I've already noticed it in my local area, when I re-let a property. Two applicants on day one, despite a rent increase. Could have probably asked even more and still let it out easily

The flip side is that capital growth in the value of the property itself is likely to be stagnant. But the yield should be good, and rising. Good for income.

This is the main reason I am trying to buy this house, so I can start renting it out in a couple years.

 

[Mary Ann]

Builders who specialise in home renovations could do well because in a poor housing market people may prefer to renovate their current home rather than try to sell their current home and buy a bigger one. We're having a loft conversion done at the moment, and the building company we're using has a full schedule of jobs, as do other companies from which we got a quote (in fact, this was the only company that could start our job before Christmas). We chose to renovate rather than move because the location where we live is very convenient and we like it here, but other people I know who are extending their houses are doing so because it's cheaper and less hassle than moving.

 

[Holdfast]

Builders who specialise in home renovations could do well because in a poor housing market people may prefer to renovate their current home rather than try to sell their current home and buy a bigger one.

That's a great point. I remember that in the aftermath of the early-90s recession, with lots of people in negative equity and unable to move, there was a big DIY home renovations boom. That's the era that shows like Changing Rooms took off in the UK, on the back of the interest in upgrading one's existing home instead of buying a new one.

 

[RevDMV]

Energy storage technologies, batteries and the whatnot.

Portable medical devices of all kinds.

 

[Eyes]

Something that's already in action (and has been alluded to a bit in this thread, with headphones ) is the music industry. Online downloads revolutionised it back in 2005, and it is now at it's highest point ever on the singles front (and figures support this immensely, it was at it's lowest in 2007 (end of transitional period), the singles market is on average now double that). More and more artists are breaking through; there is more music than ever before out there, and on the consumer side, the basic price of a song is low enough for people to just buy it and it doesn't matter, especially extremely easily from a computer. As for the matter of illegal downloads (because that will come up), I think they are actually helping the industry. Illegal downloaders will in general listen to more music, therefore become fans of more music, and will probably be then funding tours and suchlike, which is where the real money is made. Excluding the people who are just simple thieves, but that is a WHOLE OTHER DEBATE, so I'll say no more.

There's still a shift from physical albums to digital albums, and this means a slight dip in album sales, but in a few years, I wouldn't be surprised if both sides of sales were still booming.

That's the industry I'm most interested in, so let me try and think of others.

All that's coming up is that industries relying on inferior goods will boom. Can't think of anything else.

 

[Holdfast]

Energy storage technologies, batteries and the whatnot.

Very interesting. That industry has some real potential (pardon the pun) but I'm not sure it will have the capacity (seriously, they're not deliberate) to fully develop the market properly.

Portable medical devices of all kinds.

What sort of portable medical devices were you thinking of, and what makes you think it's going to be a growth area? The general trend towards telemedicine?

Something that's already in action (and has been alluded to a bit in this thread, with headphones ) is the music industry. Online downloads revolutionised it back in 2005, and it is now at it's highest point ever on the singles front (and figures support this immensely, it was at it's lowest in 2007 (end of transitional period), the singles market is on average now double that). More and more artists are breaking through; there is more music than ever before out there, and on the consumer side, the basic price of a song is low enough for people to just buy it and it doesn't matter, especially extremely easily from a computer. As for the matter of illegal downloads (because that will come up), I think they are actually helping the industry. Illegal downloaders will in general listen to more music, therefore become fans of more music, and will probably be then funding tours and suchlike, which is where the real money is made. Excluding the people who are just simple thieves, but that is a WHOLE OTHER DEBATE, so I'll say no more.

There's still a shift from physical albums to digital albums, and this means a slight dip in album sales, but in a few years, I wouldn't be surprised if both sides of sales were still booming.

That's the industry I'm most interested in, so let me try and think of others.

I know less than zero about music, so this was interesting to read. Thanks!

 

[Shatnertage]

Self-sealing stem bolts.

 

[Candlelight]

Hoverboards, hover car conversion kits and self-drying bomber jackets.

 

[Davros]

Crime

 

[Tora Ziyal]

Holdfast, I thought you'd find it interesting that I initially misread your question as, "What will you do well over the next few years?"

 

[Mary Ann]

^So did I.

 

[Ln X]

Gold and silver are going to do great as central banks print money to inflate away the debt and devalue currencies. I wouldn't even touch financials, they're on the verge of going down like Lehman 2008 all over again (eurozone debt crisis; we have several banks that are potential Lehman Brothers here). And avoid the stock market at all costs, most of the volume is generated by trading programs/algorithms which increases volatility and irrational moves. For example: a bad ADP unemployment report devalues the dollar and stock markets like this because stock markets are inversely correlated with the dollar. Just don't touch the stock market as it is not predictable... But if Ben Bernanke hints at or implements more QE, BUY stocks.

 

[Paradon]

Fast food; any place that sells goods that are essentials to people for knocked down prices, such as Walmart and Costco; and probably liquor stores and...I'm not sure about this one, but I think casinos where everyone can come a gamble.

My brother-in-law's step dad's brother owns KFC.

I'm thinking of opening a liquor store, though.

 

[Paradon]

Or, I'd just open a plantation back in Thailand. Fruits over there are so sweet...you'd think it's ambrosia.