Third port of call – Business

In our first port of call we visited the demographic landscape of the United States from now till 2030. In our second port of call, we looked at the job forecast through the lens of the bureau of labor statistics. Today, we will take the snapshots from our first two ports and use them to start making informed decisions on how businesses will be impacted by the coming tsunami. There will be “high tide” winners and “low tide” losers and today we will talk about our methodology and framework for a changing America.

First and foremost, while America will be struggling with an aging labor workforce and different consumption patterns that won’t necessarily be the case around the world. Many of the Fortune 500 companies make more money selling outside the United States than they do inside the United States. Companies that have a global customer base will fare far better than companies that rely primarily on the American consumer to survive.

As an example, if you own a company that produces baby formula, you know from our first port of call that there will be far fewer babies in the United States than the rest of the world over the next decade. At this point, if you own this company you need to decide if you want to transform your business and either sell more outside the United States by positioning your business framework for serving customers outside the United States or transform your business (formula milk) into something else that will sell to the aging American demographic.

For the investor wanting to invest in growing profitable companies, a global sales framework is a “check box” that needs to be ticked. What are some other tick boxes that need to be checked?

Global sales – Does the company have a diverse portfolio of products/services that can serve customers across the world? As an example, if you are a meat producer and you don’t have a product that will sell in a country with a predominately vegetarian population you might not have a bright future unless you can produce vegetarian “meat” somehow.

Innovative company – Does the company keep upping the ante with new innovation, products and services? Apple comes to mind as a company that keeps inventing new things from the iPod to iPhone to iPad and associated streaming services and rumors of an apple car.

An enterprise location that can attract the right talent – Having a Fortune 500 company headquarters in middle of nowhere might be great for the local community but will it attract the best talent for the firm? Does the company offer remote/flexible work scheduling to appease the ever growing needs of young workers these days? Does the company understand the millennial and z-gen goals and ambitions. Is the company ESG (Environmental, Social and Governance) friendly? If not, where is capital coming from?

Income/Dividend – Does the company generate a long history of dividends or significant stock appreciation over time?

These are just a few of the tick boxes, we will discover more as we go through this journey. What does an investment portfolio look like that can best capture all of the things above for the next 10 years? This is the beginning of the journey. We will look at the equities that best capture our check list.