Finding out what industries are growing

cje1992's picture
Rank: Senior Baboon | 235

What kind of questions do should you ask yourself in order to discover an industry that in, say, inefficient, or growing (to find an industry in which buying out/starting a business would be a good idea)?

Thanks for helpful answers!

Comments (10)

Jun 20, 2012

Big growth is really only the result of the creation of new markets or innovation. Both of these are the simple result of having a lot of pent-up demand that has (as of yet) been unrealized.

I'll give you an example. Talison Lithium (and all lithium players) have experienced a lot of growth because there is a lot of demand for lithium as it can be used in a lot of new ways. These new innovations are things such as car batteries, Ipad batteries etc.
http://www.bloomberg.com/news/2012-06-19/ipad-boom...
Another example is the new market for meat in a lot of developing countries.
http://www.voanews.com/content/decapua-farm-animal...
They key is how you play off of growth. For example, I know a lot of hedge funds were super interested in companies that supplied parts for the iPhone. Things like that.

Jun 20, 2012

computers are good, thats what I heard.

Jun 20, 2012

As for your question about inefficiency, that's a lot harder. Essentially in any market if prices are being distorted by some actor (usually legislation or some form of government agency) then there is some inefficiency. The problem is it could go on for a long time until something changes.

In Canada, healthcare is 'free', or better put fully publicly subsidized. This means that there is rampant inefficiency as there is no price mechanism to determine what is in demand. In truth, a lot of people don't actually have family doctors, they just go when they feel ill. You could capitalize on this, and I've seen it done by an American clinic that comes up and sets up at a mall or something and provides preventative medical services. They screen (usually older) patients for high cholesterol, cancer, heart conditions, etc. I'm sure they made a killing.

Jun 20, 2012

This is not an intelligent question. Focus rather on identifying a challenge that you understand and one to which you have a solution. Then determine the potential value of that solution to your key constituents (consumers). To give you a bit of example, I created a medical device product in a relatively small niche in medtech with a market cap of about $100MM (urology product), however the product provided sufficient value and was ultimately scaled to larger, tangential markets of over $1BB by the acquiring mfr. Thus, your best bet is to work bottom up instead of top down, that's been my experience.

Good luck.

    • 1
Jun 20, 2012

Did you really create a medical device socola? If so, that's pretty gangster

Baby you're the perfect shape, baby you're the perfect weight. Treat me like my birthday, I want it this way and I want it that way. It makes a man feel good baby.

Jun 20, 2012
craigje1992:

What kind of questions do should you ask yourself in order to discover an industry that in, say, inefficient, or growing (to find an industry in which buying out/starting a business would be a good idea)?

Thanks for helpful answers!

How old are you exactly?

Jun 20, 2012

Liveproper and socola2003, thank you for your help. I really appreciate it.

"Respect others in their view, and demand that they respect yours. Love your life, perfect your life, beautify all things in your life."

Jun 20, 2012

Whenever I try to answer this question, I think of the things that are popular with my friends and I. We're the younger generation, and most of the emerging markets emerge with us. So ask yourself: Which products do you like? Item from which industry make up the majority of your purchases? How do you spend your free time? Usually I can get a good answer somewhere in the mess that is my own life.

Oh, yeah, and computers.

Jun 20, 2012

Whenever I try to answer this question, I think of the things that are popular with my friends and I. We're the younger generation, and most of the emerging markets emerge with us. So ask yourself: Which products do you like? Item from which industry make up the majority of your purchases? How do you spend your free time? Usually I can get a good answer somewhere in the mess that is my own life.

Oh, yeah, and computers.

Jun 21, 2012
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