On This Day - 1 AUGUST 2019
Forget 10-Baggers and 100-Baggers, this Lady Knows the Place to Find Potential 1,000-Baggers
Carlota Perez has the biggest names in the tech industry eating out of her hands.
Famed venture capitalist Marc Andreessen has hailed her theory of technological revolution.
He calls it the single best model to understand how the software industry works.
Fred Wilson, another Silicon Valley titan, calls himself a huge fan of Carlota's work.
Steve Denning, a senior editor for Forbes, is also full of praise.
He terms Perez's model a clear and a succinct account of the history of technological revolution.
I will have to agree with all the three gentlemen.
I've yet to come across something as deep and as broad as Perez's work on the history of technology.
And one of the reasons it's so compelling is because she has drawn from a variety of fields.
History, economics, finance, technology, sociology and management - it's all there. It is a multi-disciplinary model with some insightful takeaways.
So, what exactly is Perez's model? And why does it have so many people gushing over it?
Have you seen the Dilip Kumar-Vyjayanthimala starrer Naya Daur?
A cult classic, the movie mesmerizes me every time I watch it.
But had I been the Director of the movie, I would have changed the script a bit.
I would have made Dilip Kumar ride the bus.
And I would have made Jeevan, the villain of the movie, ride the tonga.
And guess what, the bus would have won in my version as opposed to the original one where the tonga won.
The movie is a classic case of what happens when a new technology goes up against the old one.
Everyone views the new technology with skepticism.
It makes the early adopters rich.
It starts replacing the old one in a gradual manner.
There are job losses.
Income disparity widens. And finally, the old guard goes up in arms against the new one.
World's First Water Powered Cotton Spinning Mill:
The Start of the First Technological Revolution?
It does not have to be like this as per Perez.
Perez has studied technological revolutions going back more than 200 years.
And she has noticed strong similarities amongst all of them.
Perez has found out that every single technological revolution has seen a big conflict.
The conflict between the old paradigm and the new paradigm.
The conflict between the old products and processes and the new technological innovations.
And the conflict between the old methods of running an organisation and the new method.
It is these multitude of conflicts that creates obstacles in the way of new technologies as per Perez.
But people do wake up to the benefits and the wealth creating potential of the new technology in the end.
And when this realization dawns, a new golden age starts.
An age where the economic benefits flow far and wide and the entire country benefits.
There is a surge in productivity and incomes as well as wealth goes up.
If this is what each technological revolution looks like, there will be one every few decades.
And each person is likely to encounter at least one or two in his investing lifespan.
The idea should thus be to get into a new product or a process as early as possible.
And then ride the stock through the entire golden age.
If done right, one is looking at not a 10-bagger or a 100-bagger but a potential 1,000-bagger.
Yes, you read that right.
A stock that multiplies your wealth 1,000-times over.
Is this all making sense to you?
Do you want to know more about Perez's theory of technological revolution?
Do stay tuned if your answer is yes to both the questions.
I am going to cover more ground in the upcoming articles.
Editor and Research Analyst, Profit Hunter
PS: Tanushree is ready to reveal details of the huge money-making opportunity called Rebirth of India in an exclusive online mega summit on 8 August. She has already picked 7 great stocks to ride this historic boom. Book your free seat for the summit here.
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringementDisclosure & Disclaimer:
Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. The Author does not hold any shares in the company/ies discussed in this document. Equitymaster may hold shares in the company/ies discussed in this document under any of its other services.
This document is confidential and is supplied to you for information purposes only. It should not (directly or indirectly) be reproduced, further distributed to any person or published, in whole or in part, for any purpose whatsoever, without the consent of Equitymaster.
This document is not directed to, or intended for display, downloading, printing, reproducing or for distribution to or use by, any person or entity, who is a citizen or resident or located in any locality, state, country or other jurisdiction, where such distribution, publication, reproduction, availability or use would be contrary to law or regulation or what would subject Equitymaster or its affiliates to any registration or licensing requirement within such jurisdiction. If this document is sent or has reached any individual in such country, especially, USA, Canada or the European Union countries, the same may be ignored.
This document does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Our research recommendations are general in nature and available electronically to all kind of subscribers irrespective of subscribers' investment objectives and financial situation/risk profile. Before acting on any recommendation in this document, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The price and value of the securities referred to in this material and the income from them may go down as well as up, and subscribers may realize losses on any investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur. Information herein is believed to be reliable but Equitymaster and its affiliates do not warrant its completeness or accuracy. The views/opinions expressed are our current opinions as of the date appearing in the material and may be subject to change from time to time without notice. This document should not be construed as an offer to sell or solicitation of an offer to buy any security or asset in any jurisdiction. Equitymaster and its affiliates, its directors, analyst and employees will not be responsible for any loss or liability incurred to any person as a consequence of his or any other person on his behalf taking any decisions based on this document.
As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use
, available here. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited (Research Analyst) 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407