Several Industries and reasons

In the last article, I have talked about the principle of my investment philosophy. It is a preliminary thought and will be improved continuously with the development of my practice.

In this article, I would like to talk about which industries I am interested in and which is out of my attention.

Firstly, new energy will be exactly in my list. The reason is simple, human desperately needs that. The new energy is highly depending on innovation and it will be access to the end-user directly as long as it has proper cost. In my opinion, the most difficulty of a technique is commercialization, while the new energy didn't have that problem because it has had sophisticated commercialization format so long as the innovation can lower the cost and expand the production. 

Secondly, Internet is full of opportunities. However, it is less attractive than the new energy because the Internet technology still depends on the traditional commercialization, which is the advertisement. Without new innovation on the commercialization format, the market average return will converge and only few big companies will survive from the market integration. Presently, only Google, Amazon and Apple developed new commercialization successfully, which the content became the core of profitability instead advertisement. Hence, I believe that the google play, kindle series and apply store have brilliant future. They totally integrate the industrial chain to combine the innovators and producers, and directly to connect them to the end-users. It has successfully created a quick circulation of knowledge-commercialization-knowledge. 

Thirdly, I would like to say the biotechnology in agriculture and pharmaceutical industry. Although it seems like the transgenosis technology didn't have a good reputation, it has powerful productivity and better quality. The advantage of amazing low cost will crash the traditional prejudice in the long term. On the other side, the transgenosis can take around to make intermediate products first and then to the end-products. The transgenosis technology has potential application on meat, grains and even fish industry. For the pharmaceutical industry, biotechnology has even more opportunities than in agriculture. However, it has also risk, which the extreme organization, like PETA, will threaten the experiments and application.

After discussing the three clusters I am interested in, I would like to mention one thing I am afraid of, which is gold. I don't like any asset that can not create the cash flow depending on production. Gold is fully built by traditional idea, which is pretty risky. Sure, it probably can make money, but I don't think I am the one who is the winner in the gold market. In the modeling, I only treat the gold index as the input data rather than output because I don't believe anyone can predict the thousands of investors' confidence and ideas accurately. Gold price can determined many things but I don't know what factors can determine gold.

Enough today.