Key Areas of Business Growth Coming Out of This Recession

There are several areas of the US and Global economy that should experience significant growth in the next several years, making them great investments with strong potential returns. Looking to these areas will pinpoint key technologies and individual companies that should outperform the market and will make great entrepreneurial opportunities. These areas are Energy, Healthcare, Bonds/ Guilts/ Treasuries, Computing, affordable rentals and Green Enterprise. Here is a breakdown of each area of growth in more detail:

1) Energy

One of the most significant growth area will be utilities and energy companies, particularly in emerging economies such as China and India who do not have strong infrastructure in place. This will lead to a boom in power generation as consumer and industrial demand increase at a constant an unabated pace. Even though these economies will experience recession and downturn due to the current global climate, they needed this chance to catch up with their growth before they reached a cataclysmic infrastructure collapse. The fact that so much output is necessary and basic products essential to sustaining the first world way of life will undoubtedly save them from significant depression and enable them to clear a recession by 2011.

America and Europe will continue to increase their demands at a slower rate as the economic downturn has a greater impact and where greening of energy sources and particularly energy utilizes (bulbs etc) become more economical. However, as recycling and computing power increases, this will pick up a lot of the slack.

2) Annuities

Whether the markets crashed or not, a lot of people are due to retire and/or have retired and need to take annuities to finance their retirement. This will be a huge growth area and people will be looking to make reduced resources (401k and home equity) go further. Cashflowing investments will fall into this category and that will make an interesting contrast to fiscal instability of the asset classes normally used to finance such annuities.

3) Healthcare

A graying population means a huge growth in heart, cancer and brain related diseases. Barriers to entry to all markets are huge so expect to see the existing companies continue to grow and provide safe returns.

3) Bonds/ Guilts/ Treasuries

The flight to safety will continue for the foreseeable future; this asset class has been damaged by the reduction in credibility of the rating agencies (who are utterly incompetent. Expect a strong recovery over the next 3-5 years

4) Computing

We have not seen the end to the computing revolution. Whilst it is hard for mature companies such as Microsoft (MSFT) and Google (GOOG) to continue double digit growth, there is no doubt that we have only seen a fraction of the impact that computing will have on our lives. Look for robotics, alternative control methods (optical input) and personal assistant companies to rise to the fore. This bodes well for all fiber optic telecoms as data transfer will become more and more critical and infrastructure means high barriers to entry. Watch also for the emergence of city wide Wi-Fi systems.

5) Affordable Rentals

Whether the American consumer believes it or not, and no matter how much the government denies reality, the market has to bottom out and unless the government pays off a significant percentage of the mortgages of the millions of people facing foreclosure, they cannot afford their houses, never could and the inflation the government's solution is creating will result in them being even less able to afford the property in a few years. Therefore, affordable rental units allow will people to get back on their feet after bankruptcy and foreclosure woes will be a boom market. These are not high end condos or any other such development as was being flung up during the last 10 years. It is more the rent controlled properties such as those in Manhattan.

6) Green Enterprise

The world is going green not through choice but through necessity. Higher gas prices, electricity costs etc mean that consumers and businesses have to green up to reduce costs. Expect to see diesel making a strong entry into the US market, increased sales of energy saving lightbulbs and devices and energy saving devices.

Also, with the ever increasing water shortage, expect to see water recycling and refilteration come to the fore as it becomes a necessity. Waste water utilization in the Middle East, Australia and the west coast of the USA will be one of the boom industries of the next 15-20 years.

Comments

[LR European:]

Great subject, but doesn't calling gilts "guilts" (twice) rather undermine confidence in the depth of research here...

Mar 13 04:03 PM

[Giulio Negr...:]

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Oct 24 10:41 AM